Whatcom County Council Public Works and Health Committee

**Brett Peoples, on the ferry boat replacement funding gap:** "I can't tell you what it was, you know, obviously six decades ago when they put it in, if that was the intent, I, I can tell you for a fact right now we're not recovering that amount." **Brett Peoples, on the surplus process inefficiency:** "There's a cost to keeping vehicles. I should have to come back and ask if we can keep the one that we've replaced. That I think is a little more logical." **Brett Peoples, on ER&R's role:** "We're not a bank. I don't have a giant pile of money sitting around waiting to be spent. I don't get to choose how we spend it." **Kaylee Galloway, on the ferry funding issue:** "Yeah, it's been nowhere near, plus there's also been a surcharge as well. It hasn't come close to the actual replacement cost." **Brett Peoples, on damage costs:** "That's a good chunk of money. That's, you know, two F-150s right there that we could have bought straight out." **Garrett Randall, on surplus sales restric

## Meeting Overview The Whatcom County Council Public Works and Health Committee convened for a focused session on Tuesday, March 24, 2026, at 10:41 a.m. in hybrid format at the County Courthouse. All seven committee members were present: Elizabeth Boyle (committee chair), Barry Buchanan, Ben Elenbaas, Kaylee Galloway, Jessica Rienstra, Jon Scanlon, and Mark Stremler. This was a special presentation meeting with a single item on the agenda — a comprehensive briefing from Public Works on the county's Equipment Rental and Revolving Fund (ER&R), covering fleet management, equity structures, and rate-setting processes. The presentation, delivered by Assistant Superintendent Brett Peeple, provided an in-depth look at how the county manages its entire vehicle and equipment fleet worth millions of dollars. The meeting concluded at 11:16 a.m., running slightly over its scheduled end time but providing council members with critical information about county fleet operations. ## Fleet Management and the Equipment Rental and Revolving Fund Brett Peeple, Assistant Superintendent for Equipment Services and Fleet Manager, opened with a comprehensive explanation of what ER&R actually is and does. "ER&R is equipment rental and revolving fund," he began, emphasizing that the operation is governed by state law under RCW 36.33A and WAC Chapter 136-600, as well as the County Road Administration Board (CRAB). Peeple was careful to dispel common misconceptions about the fund. "I want to be very clear about what ER&R is not because there are some misconceptions around the county," he said. "We're not a bank. I don't have a giant pile of money sitting around waiting to be spent. I don't get to choose how we spend it. We operate under a budget like everybody else. We're not a for-profit entity... And we're not an insurance company. If somebody takes a vehicle, jumps a curb, hits a light pole, we don't pay for that." The ER&R operates as a comprehensive fleet management system, handling everything from initial vehicle purchase through final disposal. "We purchase the units, we upfit them for operational needs," Peeple explained, describing how vehicles get equipped with radios, lights, decals, and all necessary equipment for county use. The fund covers maintenance and repairs, from routine oil changes to major component replacements like brakes and transmissions. While ER&R is mandated for all road fund equipment, materials, and supplies, its services extend throughout county government. "Pretty much every division in the county utilizes the ER&R if they own a unit of some sort," Peeple noted. "Chances are it's going to be any R&R in my opinion is if it's not, it should be. Fractured fleets are less efficient." ## Rate Setting and Financial Structure The presentation delved into the complex process of setting ER&R rates, which has been "a big topic of conversation" according to Peeple. The rates are calculated to cover four key components: replacement plus inflation, preventative maintenance, replacement of wear items, and estimated repairs based on comparable vehicle history. Using an F-150 pickup as an example, Peeple walked through the mathematics: with an original equipment cost of $62,000 including make-ready work, an expected eight-year lifespan, and Consumer Price Index inflation factored in, the replacement cost would reach $76,000. Combined with lifetime maintenance costs of about $23,000, this translates to a monthly rate of $1,050. "The rate should be, I would set that at $1,050, give us a little bit of a buffer on the upper end to make sure that we don't run short, and it can be adjusted as we go through the life of the vehicle," Peeple explained. The lifetime revenue of just over $99,000 would cover both maintenance and replacement costs. These rates are evaluated and adjusted every two years during the biennial budget process. "I'm actually working through that process right now for the 2728 budget cycle," Peeple said during the presentation. ## Replacement Philosophy and Economic Lifecycle Analysis The county follows an "economic lifecycle analysis" approach to fleet replacement rather than a "use until failure" model. Peeple explained the strategic thinking behind this approach: "It replaces units before repair costs escalate or reliability declines." Using a graph showing the intersection of increasing operating costs and decreasing capital costs, he illustrated how the county tries to find "that sweet spot in the middle where you're trying to get rid of it before it starts costing you more money, or you start losing too much in value." This approach offers several advantages, according to Peeple: "It minimizes downtime and loss of service... keeps a fresher fleet that's less likely to do repair... works well with our regulated purchasing process... it's predictable costs, which we really like knowing what's coming up in the future." Importantly, the system provides flexibility during difficult budget periods. "It acts as a type of insurance policy for a fleet," Peeple explained. "If you run into economic issues, hard times, budget problems, you can push the lives of those units and risk some of that downtime a little more, more likely to be able to do that on a younger fleet than one that's 20 to 25 years old." Current replacement criteria vary by equipment type: passenger vehicles and trucks are set at eight years or 100,000 miles; dump trucks at 10 years or 250,000 miles; and large equipment and trailers generally at 15 years. However, these are guidelines, not rigid rules. Peeple shared examples of flexibility: "We just had a road grader that was up for replacement last year for M&O. Talking to them, having my guys look at it, I think it's got a bunch of life left in it. We're not replacing it." ## Equity and Division Funding The equity system allows for financial flexibility within divisions while maintaining strict separation between different county departments. Each division has its own equity account, and money can be moved between units within the same division based on usage and maintenance needs. "If we have a truck that goes, its entire life doesn't get used as hard as some of the other ones, it doesn't need as many repairs, doesn't need as much work, it could end up with some extra money in it," Peeple explained. "We could take that money and give it to one that maybe had a few more issues." However, state law creates clear boundaries. "It's important to note, though, that the law states that no participant in the fund can benefit from another," Peeple emphasized. "So I can't spend sheriff money on M&O and vice versa. I can't intermingle the funds." ## Recent Improvements and Projects The presentation highlighted several significant improvements completed or underway. The implementation of AssetWorks, a new asset management program approved by the council, has already begun paying dividends. "It was a long grueling process. Me and my superintendent ran through that. It was a lot of work, but we got it in. It's already paying dividends. It's already showing a lot of improvements for us and it's gonna save us a decent amount of money." The system provides minute-by-minute tracking of billable time, increased productivity monitoring, simplified month-end processes that now take minutes instead of hours, upgraded maintenance forecasting, and fully customizable reporting capabilities. Other completed projects include a fleet electrification study, central shop stormwater improvements, and the recent signing of a contract for underground storage tank removal and remediation. "We actually just got that contract signed last week," Peeple reported. Operational improvements include new leadership structure in the county's stores operation and expanded purchasing capabilities through GSA Advantage, the federal equivalent of state contracts that "helps us be a little more specific in what we buy and save us some money and time." ## Future Initiatives: Motor Pool and Utilization Studies Looking ahead, the county is exploring implementation of a motor pool system. "Motor pool is more like a rental facility," Peeple explained. "So it's more like going to enterprise and renting short term for a vehicle." Rather than each division maintaining its own fleet on a lease-like basis, a motor pool would maintain vehicles at central locations for short-term rental. The economic benefits are significant: "If we can take, if you got three divisions that are each using six vehicles, if we can take six vehicles and rent them out to those three divisions, we're saving ourselves 12 units that we don't have to have." This keeps revenue internal rather than sending county employees to commercial rental companies. This initiative ties directly to a planned fleet utilization study. "We have some vehicles that people are willing to give up because they just don't use them very often, but they have to have something," Peeple noted. The study will identify underutilized vehicles that could be candidates for the motor pool system. ## Surplus Process Challenges and Solutions One of the most pressing operational challenges discussed was the current surplus process for disposing of replaced vehicles and equipment. The existing system creates significant delays and costs. "Units can sit for a year or more at this point," Peeple explained, describing how the current process requires multiple council approvals. During this extended period, surplus units experience "decreased value through depreciation, weathering, pest infestation" and "increased costs through the degradation of batteries, seals, fluids, pest infestation." The problem isn't merely financial — it affects the entire economic model of fleet management. "Dynamic surplus is a key factor in the economic lifecycle fleet," Peeple stressed. "We really need to be able to get rid of these things, get our return on investment out of them, get our money back and re, then put that back into the equity of the new vehicle so that we can lower those rates for them once we do that." The current process requires three separate council actions: requesting permission to replace a unit, introducing it for auction, and final approval for disposal. Peeple suggested inverting this logic: "There's a cost to keeping vehicles. I should have to come back and ask if we can keep the one that we've replaced. That I think is a little more logical." ## Ferry Boat Special Circumstances Council Member Stremler's question about the county ferry sparked an important discussion about special circumstances within the ER&R system. The Lummi Island ferry operates under ER&R as road fund equipment, but its unique nature creates challenges for the standard fleet model. "I can tell you for a fact right now we're not recovering that amount," Peeple acknowledged when asked if replacement costs had been built into ferry rates over the past six decades. "That is a very, very unique piece of equipment. I think it's one of three in the entire state." Council Member Scanlon, who serves on the Ferry Advisory Committee, confirmed this assessment: "It's been nowhere near, plus there's also been a surcharge as well as well. It hasn't come close to the actual replacement cost. So it's something to think about for the future with the new boat." ## Damage Chargebacks and Proposed Crash Fund The presentation addressed a growing financial challenge: damage that falls outside normal wear and tear. Since middle of 2023, the county has tracked "damage chargebacks" — costs for repairs resulting from incidents like "jumping a curve, hitting a power pole" and other non-routine damage. The numbers are substantial: approximately $82,000 in 2023, nearly $160,000 in 2024, and around $140,000 in 2025. "That's a good chunk of money," Peeple noted. "That's, you know, two F-150s right there that we could have bought straight out." Currently, when such damage occurs, ER&R sends bills to the responsible divisions, who must find money in their existing budgets to cover unexpected repair costs. To address this, the county is exploring creation of a "crash fund" — essentially a piggy bank system where divisions pay additional fees to cover estimated damage costs. "It would be added as an additional fee per division to cover the estimated costs. It would get looked at annually or biannually, depending on how we want to do it and reevaluated," Peeple explained. The system would eliminate surprise budget impacts while maintaining accountability for vehicle care. ## Council Discussion and Questions The presentation sparked engaged questioning from council members. Council Member Stremler asked about the timing of motor pool implementation, learning that the county's old programming lacked the capability to manage such a system. "With asset Works it's actually a module built into it so it has the ability to manage it and be ran through there," Peeple explained. Questions about surplus processes led to discussion of competitive sale requirements. Superintendent Garrett Randall clarified a key constraint: "Vehicles and equipment are purchased with taxpayer dollars. We have to make them available to all taxpayers... We don't have the option to say, we're going to select this group of people and you can come here and just buy it at a negotiated price." The discussion revealed past challenges with direct sales, including situations where auction winners never paid or took possession of vehicles, leaving the county holding equipment for years in legal limbo. Council Member Scanlon expressed strong interest in addressing surplus inefficiencies: "I'd be curious to know more about the barriers so that you don't have to have units sitting there getting rats and mice in them... is there anything, I don't know, do we need to change anything in code or in our procedure to help make that process more efficient?" ## Closing and Next Steps The presentation concluded with expressions of appreciation from committee members. Chair Boyle summarized the general sentiment: "I never anticipated learning so much about our fleet. I love it... about the efficiencies here for exploring." The meeting adjourned at 11:16 a.m., one minute past the scheduled end time, with plans for the Criminal Justice and Public Safety Committee to convene after a five-minute break. The comprehensive overview provided council members with detailed understanding of county fleet operations and several potential areas for operational improvements, from motor pool implementation to surplus process streamlining to damage cost management. The discussion established a foundation for future policy decisions regarding fleet management efficiency, cost control, and service delivery — all critical components of county government operations that directly impact taxpayer resources and service quality.

### Meeting Overview The Whatcom County Council Public Works & Health Committee met on Tuesday, March 24, 2026, to receive a special presentation from Public Works staff about the Equipment Rental and Revolving Fund (ER&R), which manages the county's fleet of vehicles and equipment. Brett Peeple, Assistant Superintendent for Equipment Services, provided a comprehensive overview of how the county purchases, maintains, and replaces its fleet through this specialized fund. ### Key Terms and Concepts **Equipment Rental and Revolving Fund (ER&R):** A specialized fund mandated by state law that manages all county road fund equipment, vehicles, and supplies. Departments pay monthly rates to use vehicles and equipment, with those rates covering maintenance, repairs, and eventual replacement. **Original Equipment Cost (OEC):** The total cost to purchase a vehicle or piece of equipment and get it ready for service, including radios, lights, decals, and other modifications needed for county use. **Make Ready/Upfitting:** The process of modifying new vehicles after purchase to meet county operational needs, including installing radios, emergency lights, decals, and specialized equipment. **CRAB:** County Road Administration Board, the state agency that governs how counties must operate their equipment rental and revolving funds through RCW 36.33A and WAC Chapter 136-600. **Economic Lifecycle Analysis:** A replacement strategy that determines the optimal time to replace equipment based on operating costs, maintenance expenses, and return on investment, rather than waiting until equipment fails completely. **Equity:** The money accumulated in the ER&R fund for each piece of equipment after collecting monthly rates and paying for maintenance, which should be sufficient to purchase a replacement when the equipment reaches the end of its useful life. **Unit:** Fleet manager terminology for any vehicle, trailer, or piece of equipment managed by ER&R, used to avoid constantly saying "vehicles and equipment." **Damage Chargebacks:** Repair costs for damage that isn't considered normal wear and tear, such as hitting light poles or jumping curbs, which departments must pay for separately from their regular ER&R rates. ### Key People at This Meeting | Name | Role / Affiliation | |---|---| | Elizabeth Boyle | Committee Chair | | Barry Buchanan | Council Member | | Ben Elenbaas | Council Member | | Kaylee Galloway | Council Member | | Jessica Rienstra | Council Member | | Jon Scanlon | Council Member | | Mark Stremler | Council Member | | Brett Peeple | Assistant Superintendent for Equipment Services/Fleet Manager | | Garrett Randall | Superintendent M&O (Maintenance & Operations) | ### Background Context The Equipment Rental and Revolving Fund represents a state-mandated approach to fleet management that treats county equipment like an internal rental business. Rather than departments owning vehicles outright, they pay monthly rates to ER&R, which handles all purchasing, maintenance, repairs, and eventual replacement. This system is designed to ensure predictable costs and proper funding for vehicle replacement, avoiding the feast-or-famine cycle that can occur when departments try to manage their own fleets. The presentation comes at a time when the county is implementing significant improvements to its fleet management capabilities. The county recently invested in a new asset management system called AssetWorks, which is already showing improved efficiency and cost tracking. The county also faces upcoming challenges including fleet electrification requirements and the need to replace aging infrastructure like underground fuel tanks at the central shop. The ER&R fund operates on the principle that each piece of equipment should generate enough revenue through monthly rates to pay for its own maintenance and replacement over its lifetime. This prevents future budget crises where expensive equipment needs replacement but no funds are available. However, the system requires careful rate-setting and ongoing monitoring to ensure the fund remains balanced and departments aren't over or under-paying for their equipment. ### What Happened — The Short Version Brett Peeple walked the committee through how the county's fleet management system works behind the scenes. The county operates what's essentially an internal car rental business — departments pay monthly rates to use vehicles and equipment, and those payments cover everything from oil changes to buying new trucks when old ones wear out. The presentation covered how they calculate those monthly rates (using factors like expected maintenance costs and inflation), when they decide to replace equipment (typically 8 years for trucks, 10 for dump trucks, 15 for large equipment), and how they ensure each department has enough money saved up to buy new equipment when needed. Peeple highlighted several recent improvements, including a new computerized system that tracks maintenance in much more detail and has already increased productivity. He also discussed challenges like vehicles sitting too long waiting to be sold at auction (where they get damaged by weather and pests) and unexpected repair costs from accidents that departments have to pay separately. Council members asked questions about why the county is just now looking at motor pool options (answer: the new computer system finally makes it manageable) and whether all equipment has replacement costs built into rental rates (answer: yes for road equipment, still working on others). There was particular interest in streamlining the surplus process to get better returns on old equipment. ### What to Watch Next • Implementation of the new motor pool system, which could reduce the total number of vehicles the county needs to own • Potential changes to the surplus process to reduce the time vehicles sit unused before being sold • Development of a "crash fund" to help departments handle unexpected accident repair costs • Ongoing fleet electrification planning as state mandates approach ---

**Q:** What does ER&R stand for? **A:** Equipment Rental and Revolving Fund - the county's system for managing vehicles and equipment. **Q:** Who is Brett Peeple? **A:** Assistant Superintendent for Equipment Services and Fleet Manager who oversees the county's ER&R operations. **Q:** What state agency governs how ER&R operates? **A:** CRAB - County Road Administration Board, which enforces RCW 36.33A and WAC Chapter 136-600. **Q:** What is OEC in fleet management? **A:** Original Equipment Cost - the total cost to buy a vehicle and get it ready for service, including radios, lights, and other modifications. **Q:** How often does ER&R evaluate its rates? **A:** Every two years during the biennial budget process. **Q:** What is the replacement criteria for passenger vehicles and trucks? **A:** 8 years or 100,000 miles, whichever comes first. **Q:** What is the replacement criteria for dump trucks? **A:** 10 years or 250,000 miles, whichever comes first. **Q:** How much did the county spend on damage chargebacks in 2025? **A:** Around $140,000 - costs for repairs from accidents and non-normal wear and tear. **Q:** What new asset management system did the county implement? **A:** AssetWorks - a system that tracks maintenance time minute-by-minute and provides better forecasting and reporting. **Q:** What is a motor pool? **A:** A system where vehicles are rented short-term (daily or weekly) from a central location, like Enterprise, rather than being assigned permanently to departments. **Q:** Can ER&R funds be transferred between departments? **A:** No - state law prohibits any participant in the fund from benefiting from another department's payments. **Q:** What are the two main fleet replacement models discussed? **A:** "Use until failure" (wait until equipment breaks) and "economic lifecycle analysis" (replace at optimal cost point). **Q:** What percentage is typically set as salvage value for surplus equipment? **A:** 5% residual value is kept when equipment is put into service. **Q:** How long can the county's current surplus process take? **A:** Units can sit for a year or more before being sold, losing value due to depreciation and weather damage. **Q:** What three things are ER&R explicitly NOT? **A:** Not a bank, not a for-profit entity, and not an insurance company. **Q:** What happens during the "make ready" process? **A:** New vehicles are outfitted with radios, lights, decals, and other equipment needed for county operations. **Q:** How much did an example F-150 cost with make ready? **A:** About $62,000 with an expected monthly rate of $1,050. **Q:** What is equity in the ER&R context? **A:** Money left over after expenses that accumulates to fund replacement vehicles when equipment reaches end of life. **Q:** What improvement did AssetWorks make to month-end billing? **A:** Reduced the process from 2-4 hours with system shutdown to just minutes running in the background. **Q:** What special projects were completed in 2025? **A:** Fleet electrification study, phase one of central shop stormwater improvements, and AssetWorks implementation. ---