Keene opens budget hearing as contentious fleet-lease proposal draws public and council scrutiny

Keene — The Keene City Council opened a public hearing Sept. 11 on the proposed fiscal year 2025–26 budget and spent much of the evening debating how to replace a municipal fleet whose average vehicle age the city manager described as “17 years old.” The public hearing featured multiple resident speakers and a vendor presentation about leasing and maintaining city vehicles.

Why it matters: Council members and residents said decisions about how the city replaces or leases police, fire and public works vehicles will affect the annual budget, the city’s ability to respond to emergencies and how other capital needs are prioritized.

Residents voiced mixed views during the hearing. Samantha Gillen, who identified herself from 218 West Fourth Street, urged council to consider leasing, saying some nearby cities saw lower repair bills and better fleet reliability when they leased vehicles and used outside maintenance programs. “...leasing equipment for the city, as opposed to buying our equipment,” Gillen told the council, could reduce downtime and maintenance costs, she said.

Other commenters raised affordability concerns. Nathan Cosme of 1212 Honeysuckle Drive challenged the scale of the proposal and the per-vehicle costs cited during meetings: “29 vehicles. 29. … I don't spend $13,793 a year on upkeep of my vehicle,” he said, arguing that the projected costs did not align with residents’ priorities.

City staff and the vendor defended the proposal as a practical response to a longstanding maintenance shortfall. Jonathan Sykes, Keene’s city manager, said the fleet’s age and recent breakdowns left the city unable to guarantee reliable response to first-responder calls. “The average age of those 29 vehicles is 17 years old,” Sykes said, adding that he had experienced multiple vehicle failures in a single week that affected police and squad vehicles.

Sykes outlined why the administration was considering a lease-and-maintain program with a private fleet manager: the city lacks a large vehicle-replacement reserve, specialized public-safety vehicles can cost roughly $80,000 each, and replacing only a few vehicles annually has left the fleet in deteriorating condition. He said the financing mechanism under discussion would let the city replace vehicles more quickly without a single-year spike in capital spending.

An Enterprise Fleet Management representative, who spoke as Nick, said the firm’s financial analysis shows a multi-year plan can lower operating costs by keeping the city’s average vehicle age lower and by timing vehicle sales to maximize resale value. Nick told the council that the vendor’s projections include operating costs, maintenance and outfitting in the proposed schedule and that amortization schedules for individual vehicles typically span four to five years. He said the company performs periodic reviews with the city and “we present you, hey, this is the vehicle we recommend going with.… The city makes the decision.”

Finance staff described accounting and liquidity questions that complicate the decision. The city’s finance director explained that Keene currently uses pooled cash accounting across funds and that historical bank reconciliations have lagged; she said the finance team is working to reconcile prior years and expects audit work for 2023–24 to be completed in coming months. The finance director also described a proposed “franchise fee” transfer from the water/sewer enterprise to the general fund as part of the city’s internal allocations; she said the change is meant to reflect that enterprise activities benefit from city services and therefore should contribute to general-fund costs.

Council members pressed staff and the vendor on details. Several councillors said they want guarantees that the purchase plan would not strip essential equipment from fire and rescue. Chief Warner, who had earlier invited the council outside to view a newly delivered brush truck, asked that the recently acquired brush truck not be included in any lease program because local partners partially funded that apparatus. At least one council member asked that the chief’s recently bought Tahoe be excluded from the initial launch of any fleet program; staff responded that equipment and sale timing would be handled under later purchase and specification decisions, not by the master lease itself.

Several council members and residents said they worry about committing recurring annual payments before the city’s cash position and inter-fund balances are better documented. The mayor and others asked staff to return with clearer, itemized projections that separate capital, operating and transferred costs, and to show the cash-on-hand that would remain after implementing any fleet plan. The finance director said those figures will be easier to present after audit-close processes are completed.

What the council did: The council opened the public hearing at 6:23 p.m. for citizen comments on the proposed fiscal 2025–26 budget and closed the hearing at 7:00 p.m. No final budget adoption occurred at the meeting. Council discussion resulted in direction to staff to continue analyzing the fleet proposal, to provide a clearer accounting of water/sewer cash and franchise-fee transfers, and to return with additional financial detail before any contract is signed.

Next steps: Staff will continue work on the audit reconciliation, produce a follow-up packet that isolates fleet costs and proposed financing, and provide the council with a clearer breakdown of cash-on-hand by fund. Several council members also asked for a future agenda item to consider a purchasing policy that would enable council review or approval of specific vehicle disposals recommended by a vendor or city manager.

Key numbers and details from the meeting: - Fleet scope discussed: roughly 29 vehicles identified for replacement; city manager estimated an average vehicle age of 17 years. - Vendor-projected fleet-related outlay cited in staff analysis: approximately $446,244 in year-one program costs (vendor presentation and staff packet figures reviewed); after removing current in-budget maintenance and fuel lines, staff presented an incremental budget impact of roughly $306,084 to general fund projections for FY2026 under the lease scenario presented (staff analysis provided at meeting). - Reported sample unit cost for specialized emergency vehicles: ~ $80,000 each (city manager statement).

Speakers quoted in this article are those who appear in the meeting record and were identified in the transcript.