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HomeNewsArchivesPFA Considers $6.5M VIPD Auto Lease Deal

PFA Considers $6.5M VIPD Auto Lease Deal

June 12, 2005 — With V.I. Police Department vehicles in a serious state of disrepair, Public Finance Authority Executive Director Kenneth Mapp, during Friday’s PFA board meeting, asked for the approval of a $6.5 million lease contract to finance a new vehicular fleet.
"As stated in the VIPD union contract, cars are supposed to be replaced every two years or 80,000 miles," Mapp explained, "and this is not happening. We have cars that are five or six years old still being used … this decreases the number of cars efficient enough to respond to calls."
As a solution, Mapp, on behalf of Police Commissioner Elton Lewis, proposed the execution of the VIPD Lease Program, through which 196 vehicles would be fitted by Caribbean Auto Mart for officers to have for both work and personal use. "This allows the officers to take better care of their cars," Mapp stated. Gov. Charles Turnbull, PFA's Chairman, then added that the continuous presence of squad cars in certain areas might make them safer.
As part of the proposal, language in the VIPD union contract would also changed to state that fleets must be replenished every three years. During this period of time, officers would lease their cars from Caribbean Auto Mart, returning them for new vehicles at the conclusion of the three-year contract.
After bids made by First Bank and GMS for a purchasing structure were rejected, Banco Popular was contracted by the PFA to provide the financing for the lease structure with Caribbean Auto Mart, at an interest rate of 4.55% per annum for the lease period.
Mapp asked the PFA to approve the $6.5 million in lease financing from Banco Popular, with repayment coming from the gross receipts taxes. "First Bank and GMS offered options with rates ranging from 4.34% to 5.35% per annum," Mapp stated, "but they provided that vehicles must be purchased. With Banco Popular we can lease the cars, and when the contract time has expired, Caribbean Auto Mart will provide the maintenance, so that the vehicles do not ever again get to their present state."
Some PFA board members, concerned about whether leasing the cars was indeed cheaper than purchasing them, asked Mapp to resubmit information to the board explaining the financing structures offered by the three institutions bidding on the contract.
Mapp, who did state that the decision regarding the selection of the financing structure was not in the hands of the PFA, agreed to provide the information, thereby allowing the PFA to table the issue until a later date.
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