HomeMy WebLinkAboutE-05 Staff Report - Enterprise Vehicle ReplacementsCONSENT ITEM
E-5
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: DANIEL BOBADILLA, P.E., DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
DATE: NOVEMBER 19, 2018
SUBJECT: APPROVE LEASE AGREEMENTS WITH ENTERPRISE FLEET MANAGEMENT
FOR THE REPLACEMENT OF FOUR VEHICLES
BACKGROUND:
The Public Works Department has been working with Enterprise Fleet Services since 2012 on a fleet
replacement strategy to replace older vehicles. This effort has reduced operating costs and lowered the
average age of the fleet. Vehicles are leased for a 60-month period during which there are no mileage
restrictions or wear and tear charges. At the conclusion of the lease agreements, the City has the option
to purchase the vehicles or return the vehicles at fair market value and enter into new lease agreements
for a similar vehicle. A comprehensive maintenance plan is included in the lease price. The City has
participated in several leases under these terms since 2012. The lease period on four of these vehicles is
close to completion. The proposed action will authorize the City Manager to enter into new lease
agreements for the replacement of four vehicles.
RECOMMENDATION:
Staff recommends the City Council take the following actions:
1) Waive competitive bidding as authorized under Azusa Municipal Code Section 2.521(a) and
approve lease agreements with Enterprise Fleet Management for the lease of four (4)
replacement vehicles through the use of a bid with TIPS-USA; and
2) Authorize City Manager to execute lease agreements with Enterprise Fleet Management, in a
form acceptable to the City Attorney, on behalf of the City.
ANALYSIS:
Since 2012, Staff has been working with Enterprise Fleet Services on a fleet replacement strategy in an
effort to replace older vehicles, which incur higher maintenance costs. Vehicles are leased for a 60-
month period during which there are no mileage restrictions and no wear and tear charges. Four
vehicles leased under these terms have now reached their lease expiration date. The City now has the
APPROVED
CITY COUNCIL
11/19/2018
Enterprise Vehicle Replacements
November 19, 2018
Page 2
option to purchase the vehicles or return the vehicle at fair market value and enter into a new lease
agreement for a similar vehicle. Since the City no longer has a Garage to maintain its fleet, it is
considered more cost effective to enter into new leases. The vehicles subject to lease expiration and
subsequent replacement are as follows:
Item
#
Department Current Vehicle Lease
Amount
Proposed
Vehicle
Lease
Amount
Funding
Source
1 Public Works 2014 Ford Escape $419.88 2018 Toyota
Prius $342.65 Gas Tax
Fund 12
2 Public Works 2014 Ford F-450
w/Lift Gate $785.27
2019 Ford
F-450 w/Lift
Gate
$1,127.37 Sewer
Fund 34
3 Recreation &
Family Services
2014 Ford F-350
w/Lift Gate $649.33
2019 Ford
F-350 w/Lift
Gate
$684.14 General
Fund 10
4 Recreation &
Family Services
2014 Ford F-150
Supercab $482.62 2019 Ford
F-150 $423.37 General
Fund 10
The City’s purchasing procedures allow for the acquisition of equivalent equipment through a process of
competitive bidding by using other municipalities or through joint powers programs. In this case,
Enterprise Fleet Management was identified through a bid with The Interlocal Purchasing System
(TIPS) to provide the vehicles the City is seeking at competitive prices. As a result, the City can achieve
the benefits of a competitive bid without the additional costs and delays associated with the standard
procurement process.
Each of the vehicles will be on a 60-month maintenance lease that includes all preventive and
unscheduled repairs (oil changes, brakes, tires, engine, transmission, alternator, etc.); and a 24-hour
roadside assistance. At the conclusion of the lease, the City will have the option to purchase the vehicle
or return the vehicle at fair market value and enter into a new lease agreement for a similar vehicle.
FISCAL IMPACT:
The replacement costs for items were included in the FY 18-19 Adopted Budget under 12-55-661-000-
6823, 34-55-665-000-6823, 10-90-000-000-6823, and 10-90-000-000-6823 respectively.
Prepared by: Fiscal Impact Reviewed:
Nikki Rosales Talika M. Johnson
Senior Management Analyst Director of Finance
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachment:
1)Enterprise Fleet Management Quotations
Attachment 1