Now’s the time to borrow, rent – Equipment sharing makes more sense than ever
With winter in full swing, you’re probably kicking yourself for not requisitioning that third new truck and plow package last fall. Who knew you’d get this much snow?
Neighboring cities are also short on equipment to keep streets clear during repeated winter weather onslaughts. But wait! Your “neighbor” two towns over has a great new truck: Maybe he’d let you rent or even borrow his? That way you won’t have to lay out big bucks to buy one yourself, not to mention the gas and oil to feed it.
That neighbor also owns some new heavy gear, including a skid loader, forklift and vibratory roller. Take him to lunch and consider asking if you can rent the piece you need now or in the spring since your administrator won’t approve the machines, tools and use of an operator for a one-time job, anyway.
Smart municipalities have hit on this sensible idea when undertaking big construction or agriculture projects, or repairing infrastructure such as bridges, buildings, roadwork and parks. According to Alan Mond, CEO and co-creator of MuniRent in Ann Arbor, Mich., and Oakland, Calif., equipment-sharing is definitely gaining traction but is not new; rather, it is something that always existed in the municipal space.
“As an example, Mutual Aid Agreements allowed municipalities to collaborate in disaster situations,” he said, adding that government, in general, has a long history of collaboration.
“The advent of the Internet provides the ability to streamline how a loader or a dump truck is scheduled. It also helps to have an intergovernmental agreement and keep track of sharing to show residents that cities are stretching taxpayer dollars as much as possible. The reduction in cost is incredible, and it requires negligible time investment to implement.”
Sharing heavy equipment reduces costs, increases utilization and improves efficiency. Also, a knowledgeable operator of the machines is a great extra — especially, for example, if your town needs a roller for its new parking lot but no one knows how to operate one. Opt for a driver along with the machine, and presto! One big headache relieved instantly.
Examples of items a municipal equipment-sharing entity might have in its inventory include a bulldozer, excavator, vacuum truck, skid steer, bucket truck, dump truck, backhoe, loader, message sign truck, roller, street cleaner and operating personnel.
Mond stressed that his company is neither an equipment rental company nor a motor pool service, but a capital equipment-sharing venture. Similar initiatives are rapidly making their way across the country.
One is Missouri-based www.EquipmentShare. com, a peer-to-peer endeavor that gives back to its community by providing a platform where contractors can save and make money on equipment rental. EquipmentShare.com also helps nonprofits like Habitat for Humanity rent equipment for much lower rates and actively screens members that apply to rent quality equipment and experience. The company also reserves the right to remove members that don’t adhere to its policies and conditions.
Dave Yost, Ohio Auditor of State, implemented his www.ShareOhio.gov plan in January 2014.
“Any public entity can benefit from sharing programs, whether it be heavy equipment or even employee sharing,” he said. “Equipment sharing is a common practice among Ohio’s local governments, and we urge all public entities to consider it as we work more to do more with less.”
Mond expanded on the point.
“Large cities should consider sharing assets internally between departments. In large organizations it is easy to lose track of how many pieces of equipment are available at all times. An internal sharing program provides the ability to increase utilization of equipment,” he said, adding that this was different than a motor pool. “An equipment-sharing program means that assigned equipment stays with the department in the same location, but it is made available for other departments to request a reservation.
Smaller municipalities can group together and formalize an equipment- sharing program, he noted.
The agenda is to assist both localities and keep costs down. If one town has a backhoe it is not currently using, another city might be able to use it for a specific job. A sewer-camera truck, for example, costs a minimum of $200,000 when purchased new; renting one from another municipality provides rent money to the loaner and saves the renter thousands of dollars.
Yost said much of the equipment shared in Ohio relates to special projects and takes the form of mowers, concrete saws and sewer cameras. “However, choosing to borrow any type of equipment your entity does not own, instead of purchasing new, can help save money,” said Yost. Does the sharing equipment need to be formal? If so, what should the contract include?
“It definitely needs to be formal,” said Mond. “I’ve posted a blog on our website that outlines what the intergovernmental sharing agreement should include.”
Briefly, the five points are:
- Keep it short and sweet
- Use language that a fifth-grader can understand
- Make it a many-to-many/multi-agency agreement
- Don’t include unnecessary constraints
- “Don’t reinvent the wheel,” said Mond.
“I’ve got a 4-pound sledge hammer in my toolbox,” said Yost. “Most of the time I don’t use it, but when I do, it’s the only tool for the job. So if my neighbor needs a sledge, does it make more sense for him to buy another one, or to borrow the one I have but I’m not using? “It’s the same thing with expensive backhoes, graders, bulldozers and the like that most governments own — and that’s why we launched ShareOhio.gov.”
Borrowing equipment is a common occurrence in the construction business as it can save time and costs to do so. However, whether it’s for an hour or a week, there is always the risk of damage to the borrowed equipment.
I like that you mention that sharing and renting heavy equipment is a good way to save money. It just doesn’t seem worth it to buy heavy equipment if you’re not going to be using it a lot. Renting equipment seems like a good option because you can use it on your own time and don’t have to spend time and money maintaining it.
Cameron, thanks for your input on this topic and for reading The Municipal!