Car costs may top $1.46M

Posted on Mar 08 1999

The government spends some $131,564 each month to lease 148 vehicles for use by several departments and agencies, whose total payment will reach at least $1.46 million by the end of this current fiscal year, according to finance officials.

This represents a 34 percent reduction from about $2.2 million paid for lease of government cars during the previous year, said Finance Sec. Lucy DLG Nielsen in a letter to the House of Representatives.

At least 2.6 percent of the overall operations budget of the CNMI government for FY 1999 has gone to paying its car leases, while some departments have set aside a substantial amount from their spending level to meet this obligation.

These findings were part of a report responding to a House resolution asking the finance department to account for dozens of top brand cars leased out to various departments and agencies in an effort to clamp down on the use of what it calls luxury vehicles.

The resolution, filed by Rep. Malua T. Peter, was adopted in November last year, but Nielsen handed in the report only last month.

According to the finance chief, the Department of Public Safety has allocated 31 percent of its “all others” budget to lease payment of the police cars and other patrol vehicles, while the Department of Finance has used 13 percent of its operation costs for rental of cars for their enforcement divisions.

Nielsen recommended to the legislature several ways by which to trim expenditures on car rentals, such as by standardizing the type or model of vehicle as well as by bidding out the transportation needs of the government.

“The price range just within one vehicle category is varied so if we could set a ceiling for leasing utility vehicles or sedans, we will realize tremendous payments,” she said.

“Also, if we lease the same vehicle for at least two years with the option to purchase we can take advantage of our vendor discounts.”

Noting that the government has contracted four local companies for its vehicle needs, Nielsen maintained savings will be realized by having just one vendor.

“(W)e take advantage of volume discounts, standardize the types of vehicle leased and make contract processing less time consuming,” she added.

A breakdown of the leased vehicles by vendor revealed that Triple J received 46 percent of the contracts, Microl with 27 percent , Joeten Motors with 19 percent and Keiko Motors, 8 percent.

The Northern Marianas is reeling from its worst economic crisis in years, pulling down government revenues and slashing allotment to all departments and agencies by 13.4 percent.

Lawmakers are hoping that by reviewing the car lease practices of the government, it will help in the ongoing austerity measures implemented by Gov. Pedro P. Tenorio to meet budget shortfall.

The resolution has said the use of leased cars should be “minimized to a real necessity basis… (because) the government can no longer afford the luxury of having more than enough” vehicles per department or agency.

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