HomeMy WebLinkAboutE-7 Staff Report - Enterprise Vehicle ReplacementsCONSENT ITEM
E-7
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
VIA: SERGIO GONZALEZ, CITY MANAGER
FROM: ROBERT DELGADILLO, P.E., DIRECTOR OF PUBLIC WORKS/CITY ENGINEER
DATE: FEBRUARY 18, 2020
SUBJECT: APPROVE LEASE AGREEMENTS WITH ENTERPRISE FLEET MANAGEMENT
FOR THE REPLACEMENT OF SIX VEHICLES AND ADDITION OF TWO
ADDITIONAL 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 six of these vehicles is
close to completion. Additionally, the form truck used by the Public Works Department is from 1986
and no longer efficient or effective and one of the arrow-board trucks is a 1987 model and needs to be
replaced. The proposed action will authorize the City Manager to enter into new lease agreements for
the replacement of six vehicles and leases for two additional vehicles.
RECOMMENDATION(S):
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 six (6) replacement
vehicles and two (2) additional 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; and
3) Approve necessary budget amendment and adjust the current fiscal year budget accordingly.
APROVED
CITY COUNCIL
2/18/2020
Enterprise Vehicle Replacements
February 18, 2020
Page 2
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. Six vehicles
leased under these terms have now reached their lease expiration date. The City now has the 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. Several of the vehicles due for replacement were purchased with
AB2766 funds and therefore the only monthly payment was for the maintenance program. Vehicles are
being replaced with models considered more suitable for the uses required. 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 Building 2015 Toyota
Prius V
$78.28 2020 Toyota
Tacoma
w/toolbox
$377.82 Citywide
2 Building 2015 Toyota
Prius V
$78.28 2020 Toyota
Tacoma
w/toolbox
$377.82 Citywide
3 Code
Enforcement
2014 Ford
F150/CNG
$81.64 2020 Toyota
Tacoma
$362.14 Citywide
4 Code
Enforcement
2014 Ford
F150/CNG
$75.20 2020 Toyota
Tacoma
$362.14 Citywide
5
Public
Works
2015 F250
Regular Cab
$634.38 2020 F250
Regular Cab
$561.05 Sewer
6
Public
Works/Parks
Maintenance
F350
w/Stake bed
$89.87 F350
w/Stake bed
$543.02 Citywide
Additionally, the Public Works Department has a form truck used for concrete work that is a 1986
model. Due to age it is not efficient and maintenance is difficult due to inability to secure parts. It has
exceeded its useful life and needs replacement. Public Works also has a 1987 arrow-board truck that
needs to be replaced. This truck has exceeded its useful life and the traffic safety lights are not up to
today’s standards. Due to the specialized body required on the new trucks, 50% of the cost of the bodies
will be required upon delivery ($8,528.96 for Lift gate and $9,516.10 for Form Truck). If the sale of any
of the vehicles being returned exceeds Enterprise’s conservative estimates, then those fund can be
utilized towards this initial expense.
Item # Department Current
Vehicle
Lease
Amount
Proposed
Vehicle
Lease
Amount
Funding
Source
7 Public
Works
1986 F350 $0 2020 F350 $891.93 Gas Tax
Enterprise Vehicle Replacements
February 18, 2020
Page 3
8 Public
Works
1987 F350 $0 2020 F350 $846.89 Sewer
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:
Based on these leases being for full value of the vehicles instead of only maintenance costs, there will be
annual fiscal impacts as follows: $24,275.28 - General Fund; $10,703.16 annually plus $9,516.10 down
payment for first year – Gas Tax; $16,895.28 annually plus $8,528.96 for down payment for first year –
Sewer. Due to availability and the time required to add aftermarket items to the trucks, additional
funding may be needed to cover month to month lease expenditures at the end of the current terms.
Prepared by: Reviewed and Approved:
Nikki Rosales Robert Delgadillo, P.E.
Senior Management Analyst Director of Public Works/City Engineer
Reviewed and Approved:
Sergio Gonzalez
City Manager
Attachment:
1) Enterprise Fleet Management Quotations
Attachment 1