Title
AN ORDINANCE AMENDING ORDINANCE NO. 2143 TO INCREASE THE AUTHORIZED TOTAL EXPENDITURE AMOUNT FOR THE LEASING OF VEHICLES UNDER THE CITY’S MASTER LEASE PROGRAM AGREEMENT WITH ENTERPRISE FLEET MANAGEMENT
Body
Summary & Background:
Background
• In 2017, City Council authorized the City to enter into a Master Equity Lease Agreement with Enterprise FM Trust, “Enterprise”
• The purpose of this agreement was to provide for a method to replace vehicles/equipment that had surpassed its cost effective useful life-span with more modern, safer, and efficient vehicles/equipment without incurring significant capital outlay for the purchase of new(er) vehicles/equipment
• The City currently utilizes approximately 135 vehicles leased from Enterprise pursuant to the Agreement in order to carry out and perform various necessary City functions
• The current Agreement’s five-year term runs through November 2022 and the total cost for the leasing of vehicles necessary for City operations is currently projected to exceed the $3,548,125 maximum amount previously authorized by the City Council by end of Feb 2022 (based on revised delivery schedule of 2021 order deliveries)
Fleet Overview
• City operates a fleet of approximately 400 units consisting of passenger cars, pick-ups, light, medium and heavy equipment, parks operations equipment, and large tandem trucks
• Of these 400 units, 224 are lease eligible
• At present - of the 224 lease eligible units
o 134 units are currently leased from Enterprise
o 17 leased units are on order, model year 2021, yet to be delivered
o 31 units scheduled to be leased, starting in 2022
o 42 units to remain as City owned
Expenses
• Maximum allowable expenditure under the current authorization is $3,548,125
• Anticipated total lease program expense through November 2022 is $5,968,895…breakdown as follows;
o $2,946,693 Expense as of 8 August 2021
o $2,193,875 Projected Expense Aug 2021 - Nov 2022
o $544,180 Projected Expense of 2022 Additions
o $284,237 Contingency
• Past and Projected Vehicle Lease Program Expenditures have been approved through the budget process from 2017 - 2022
Next Steps
• Recommend Approving Proposed Ordinance Amendment (through November 2022)
• Investigate Efficacy of Current Lease/Fleet Program
o Utilize 3rd Party Consultant to assist review of current program and provide recommendation on best practices/alternatives to acquire, maintain, & manage fleet to best meet City’s current and future needs
• Fleet Options To Consider (post November 2022) include;
o Continue w/primarily Leased Fleet
o Convert to hybrid (Leased & Owned Fleet)
o Convert to primarily City Owned Fleet
Staff Responsible (Department Head): Joe Wilson, Public Works Director
Staff Presenting: David Bebak, Fleet & Facilities Manager
Financial Impact: Total expenditures of the lease program not to exceed $5,968,985.79
Funding Source: Fleet Fund
Staff Recommendation: Approval of Ordinance Amendment as presented
Suggested Motion:
- First reading: I move to introduce and approve on first reading Ordinance 2358 by Council as seated
- Second reading: I move to approve Ordinance 2358 on second and final reading