Agenda Report
Fullerton City Council
MEETING DATE: MAY 2, 2023
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: ROBERT DUNN, CHIEF OF POLICE
PREPARED BY: LAUREN PARKHOUSE, SENIOR ADMINISTRATIVE ANALYST SUBJECT: POLICE DEPARTMENT MASTER EQUITY LEASE PROGRAM FOR POLICE VEHICLES UPDATE
SUMMARY
An update on the Master Equity Lease Program through Enterprise Fleet Management for Police Department vehicles and request for budget appropriation for Year 1 of vehicle lease.
RECOMMENDATION
Approve $100,000 budget transfer and appropriation to Fiscal Year 2022-23 Budget from General Fund (Fund 10) to the Vehicle Replacement Fund (Fund 64) for Master Equity Lease Agreement with Enterprise Fleet Management Year 1.
CITY MANAGER REMARKS
None.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statement:
Infrastructure and City Assets.
FISCAL IMPACT
The four-year lease agreement with Enterprise Fleet Management would total $400,000 ($100,000 per year). Staff anticipates the estimated $127,000 proceeds from vehicle sales would offset the lease payment costs in the first year. The City would house leased vehicles in the City’s Vehicle Replacement Fund (Fund 64). Staff requests a $100,000 budget adjustment to the FY 2022-23 Budget from the General Fund (Fund 10) to the Vehicle Replacement Fund (Fund 64) for Year 1 and will incorporate ongoing lease payments in the annual budget development process.
DISCUSSION
City Council authorized a Master Equity Lease Agreement with Enterprise Fleet Management for Police Department vehicles on July 5, 2022. Staff did not request a budget appropriation at that time as staff anticipated proceeds from existing vehicle sales to substantially support first year lease payments. Staff will record proceeds from as existing vehicles sales as revenue with lease payments recorded as expenditures in accordance with accounting requirements. This accounting will not net proceeds against expenditures and staff request an administrative budget appropriation for Year 1 lease payments to the Fiscal Year 2022-23 budget.
Staff anticipates the Enterprise master equity lease program to cost about $100,000 each year for the duration of the four-year lease term. The Public Works and Police departments will manage the lease program within the Vehicle Replacement Fund. Staff may submit requests to expand the lease program if the lease program is successful.
Lease Program Update
The City has received four of the ten vehicles ordered as of April 20, 2023, with the delivery of the remaining six vehicles expected within the next two months. Enterprise transfers the vehicles as they arrive from the factory to the City’s selected vendors to have upfitting completed with lights, sirens and radios installed prior to delivery to the Police Department. Enterprise will pick the first two replaced vehicles within the next week to sell. The City records proceeds from each replaced vehicle sale proceeds as revenue to offset the lease payment expenditures for a minimized net fiscal Year 1 impact.
Attachments:
Attachment 1 – Police Department Master Equity Lease Agreement Agenda Report July 5, 2022 cc: City Manager Eric J. Levitt
Police Department Master Equity Lease Program Update
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