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Donald Musgnug

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Town unanimously approves comptroller’s plan to breathe new life into aging vehicles through leasing

Smithtown Town Hall. File photo by Rachel Shapiro

Smithtown is going ahead with plans to upgrade its vehicle fleet.

The Smithtown Town Board voted unanimously at its meeting last Thursday night, Jan. 21, to enter into an agreement with Enterprise Fleet Management and gradually upgrade its aging vehicle fleet. Over the next year, the town will begin phasing in 23 new high-mileage vehicles into its fleet with more to come, according to the agreement with Enterprise FM Trust.

The proposal came from town Comptroller Donald Musgnug, who brought Enterprise representatives to the board before a work session earlier this month calling on the town to upgrade its 192-vehicle fleet. Most of those vehicles, Musgnug said, were approaching two decades in age and six-digit mileage numbers.

“Clearly we have an aging fleet,” Musgnug said to the board at the work session. “Enterprise is one of the leaders in this industry. The proposal is on the table.”

Musgnug said Smithtown had about $986,000 set aside in its 2016 budget for the purchasing and maintenance of the town’s vehicle fleet used across various departments, and with Enterprise’s help, the town would be replacing about 173 of its vehicles over the next five years and save money while doing it.

According to the deal, Enterprise would purchase the vehicles directly from various manufacturers and use government incentives while leasing them out to the town for prices Smithtown would not be able to acquire on its own, the Enterprise leasing representatives said.

“We’ve been doing this with a lot of New York entities,” said Jacob Garth, government marketing manager at Enterprise at a work session earlier this month. “We do more than just managing and acquiring vehicles. When we look at the fleet, one of the key objectives we make is to lower the age of the fleet, and a significant portion of your fleet is more than 10 years old.”

Garth said that municipalities like Smithtown typically purchase their vehicles via state contractors, which often limit purchases to only one manufacturer. Enterprise, however, has more than 1.6 million vehicles in its fleet from a range of manufacturers, which Garth argued would give Smithtown more opportunity for savings through open-ended leases.

Fleet consultant Jay Greene of Enterprise also said his group has already signed onto similar agreements with Brookhaven and Huntington towns and started discussing plans with Smithtown back in September.

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Smithtown’s aging vehicle fleet might soon see a major upgrade.

Town Comptroller Donald Musgnug pitched a proposal at Tuesday’s Town Board work session that could essentially allow the town to trade in its dated cars and trucks for newer, more fuel-efficient vehicles. The Town Board discussed the potential fleet management agreement with representatives of Enterprise on Musgnug’s recommendations to act sooner than later.

“Clearly we have an aging fleet,” Musgnug said to the board members at Tuesday’s work session. “Enterprise is one of the leaders in this industry. The proposal is on the table.”

The comptroller said Smithtown currently manages 192 vehicles of varying sizes with many of them approaching two decades of use under the town’s ownership. Some of its most maintenance-heavy vehicles, he said, included a 1997 Ford F250 pickup truck with 285,000 miles on it and a Chevy Express 3500 cargo van with 184,000 miles on it. If the town were to sign onto a deal with Enterprise, representatives said, an advisor would help the town lower the age of its fleet to cut costs of maintenance and fuel by trading them out for newer, leased vehicles.

“We’ve been doing this with a lot of New York entities,” said Jacob Garth, government marketing manager at Enterprise Fleet Management. “We do more than just managing and acquiring vehicles. When we look at the fleet, one of the key objectives we make is to lower the age of the fleet, and a significant portion of your fleet is more than 10 years old.”

Garth said that municipalities like Smithtown typically purchase their vehicles via state contractors, which often limit purchases to only one manufacturer. Enterprise, however, has more than 1.6 million vehicles in its fleet from a range of manufacturers, which Garth argued would give Smithtown more opportunity for savings through open-ended leases.

Musgnug said his preliminary recommendations were to reduce Smithtown’s fleet size from 192 to 173 over five years.

“We’re looking at a phase-in approach because we currently have a maintenance crew of more than 20 auto mechanics in the town,” he said. “Phasing it in allows them to stay occupied, and through attrition, there may be some reduction because as you have some new vehicles, the maintenance lessens. This could be significant cost savings.”

Town Councilman Tom McCarthy (R) expressed steadfast support for the proposal to upgrade the town’s aging fleet and asked Musgnug if it was possible to phase new vehicles in over three years instead of five.

“Let’s get rid of all this garbage,” he said.

Fleet consultant Jay Greene of Enterprise said his group has already signed onto similar agreements with Brookhaven and Huntington towns and started discussing plans with Smithtown back in September.

Town Supervisor Pat Vecchio (R) said he felt the board needed to take more time to learn about its options and pushed the discussion to a later date. He also instructed Musgnug to touch base with his government counterparts in neighboring Brookhaven and Huntington in order to draft a report of testimonials from towns already working on a similar plan with Enterprise.

“I would think we would need more discussion amongst ourselves about whether or not we want to do this,” Vecchio said. “This is a discussion we need to have at another date, and we’ll contact Enterprise.”

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Calling upon previous instructions to be careful with Smithtown’s cash, two town board members voted against promoting two town employees at a public meeting Tuesday, though it was not enough to stop the raises.

Town Comptroller Donald Musgnug told the board in a special meeting last month that it must “tighten its belt” to protect its bond rating as the town goes out for bonding later this year to fund certain capital projects. Tuesday’s meeting agenda included two promotions that were ultimately approved by a vote of 3-2, but they were met with concern from Councilman Bob Creighton (R), who called upon Musgnug’s previous warning.

“We had Mr. Musgnug in here recently, and now I have a little bit of a problem,” said Creighton, who voted against the promotions along with Councilman Ed Wehrheim (R). “He tells us we shouldn’t be doing more promotions, and here it is, we have two more on here.”

The promotions ultimately went to Traffic Safety Department employees Dyanne Musmacker, to the position of senior clerk typist at $20.45 per hour, and Anthony R. Cannone, to the provisional position of traffic engineer at $54.07 per hour — both effective July 20. The two promotions were the only items Creighton and Wehrheim voted against in a list of 10 other personnel matters before the Smithtown Town Board on Tuesday.

Town Supervisor Pat Vecchio (R) defended the promotions, saying money was already allocated at the beginning of budget season for such raises.

“When the department asked for those promotions in September of 2014, I told them we would consider those promotions and that I would put the money in the budget effective July 1,” Vecchio said. “So there’s money already accounted for.”

Vecchio also said such a practice, allocating money in the budget for future raises, was not out of character for the town.

Creighton, however, was against the practice on the grounds of Musgnug’s presentation before the Town Board in which he expressed concern over the town’s financial future.

“My recommendation is that we fill only essential positions, promote from within where possible and leave non-essential positions vacant,” Musgnug said in his June 23 presentation on the status of the 2015 Smithtown budget. “The message is that we must continue to contain what we can control — expenditures.”

Musgnug said the town’s financial standing was ultimately on the line come the end of the year as it considers bonding for projects, and potentially faces a lowered rating.

“The rating agencies would like to see a structurally balanced budget,” he said at the June special meeting. “As we approach the 2016 budget cycle, the closer we are to breakeven in 2015 means less adjustments for 2016.”

Smithtown Comptroller Donald Musnug outlines his capital budget suggestions before the Town Board on Monday. Photo by Phil Corso

Smithtown’s new comptroller is calling on the town board to borrow money to fund upcoming capital projects.

Donald Musgnug, who was sworn in as town comptroller in February after his predecessor, Lou Necroto, took a job with the county, provided his first capital budget recommendations report on Monday and pushed for borrowing money to pay for improvements. He listed several bullet points justifying his recommendation, as the town gears up to fund projects like an animal shelter renovation, LED streetlight retrofittings and marina bulkhead improvements.

“Interest rates are at historically low rates and the town is fiscally strong,” Musgnug said. “Now is the time to borrow, when rates are low, and thankfully we are in a position to do so.”

The comptroller said he expects replacing aging and otherwise deteriorating equipment would reduce the amount of money set aside in future budgets for repairs and maintenance. In reference to an upcoming streetlight project that would bring LED lighting to Smithtown’s streets, Musgnug said the town would offset the costs of future projects in the form of savings.

“Taking advantage of new technology, such as in the case of LED bulbs for streetlights and the municipal solid waste facility, will reduce utility costs [and] repair costs and improve safety,” Musgnug said in his report. “Because the town’s finances have been conservatively managed over the years, there is little room to cut operating budgets, making the goal of staying within the New York State tax cap increasingly difficult in light of rising compensation, health care and pension costs.”

In the upcoming year, Musgnug said most of the budgetary requests are equipment-related and should be done in the near future as assets deteriorate due to age and usage.

The streetlight project, he said, would total $5.6 million but could be offset by a possible $750,000 grant from the state.

“It should also be noted that … we expect to reduce utility costs and repairs by $350,000 as a result of the streetlight LED retrofit, which will offset the cost of borrowing, which is $270,000 per year,” Musgnug said. “So we actually more than offset the cost of installation.”

The comptroller also said the town should anticipate equipment purchases and construction in 2016, mostly because of the first phase of Smithtown Animal Shelter renovations as well as upgrades at the town marina, which collectively require about $3.1 million in financing.

The following year, he said, those projects would require about $6 million in funding overtime to complete.
After the comptroller’s report, Councilman Ed Wehrheim (R) said he was impressed by the thoroughness of Musgnug’s pitch and wants to make sure the town follows through on capital projects after setting aside funding for them.

“Overall, I think it’s excellent,” he said. “In past years, we borrowed money and put up capital projects, but they never got done. Let’s make sure someone oversees these.”

In his report, Musgnug said even if the town chose to borrow more money as recommended, it would still see its overall debt steadily drop because of its conservative fiscal management policies.

“You should be commended for putting the town into a position where it can borrow significant sums of money and still have declining debt service payments [for which] it must budget,” he said.

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