Agenda Report
Fullerton City Council
MEETING DATE: FEBRUARY 18, 2025
TO: CITY COUNCIL / SUCCESSOR AGENCY
SUBMITTED BY: JON RADUS, CHIEF OF POLICE
PREPARED BY: LAUREN PARKHOUSE, SENIOR ADMINISTRATIVE ANALYST SUBJECT: ADDITION TO MASTER EQUITY LEASE AGREEMENT WITH ENTERPRISE FLEET MANAGEMENT, INC. FOR TWELVE LEASED VEHICLES
SUMMARY
Authorize addition to existing Master Equity Lease Agreement to lease twelve Police light-duty vehicles with Enterprise Fleet Management, Inc. (Enterprise) to supplement the regular vehicle replacement program.
PROPOSED MOTION
Approve and authorize City Manager, or designee, to execute Enterprise Schedules to the Master Lease Agreement with Enterprise Fleet Management, Inc. to lease twelve Police light-duty vehicles and other necessary documents in connection with Enterprise Schedules and to effectuate and manage ongoing Enterprise Fleet Management program options.
Authorize City Manager, or designee, to execute and administer automatic lease renewals for twelve Police light-duty vehicles.
Authorize City Manager, or designee, to execute and administer future supplemental lease schedules to the Master Equity Lease Agreement with Enterprise Fleet Management, Inc. should the program continue to be successful and cost effective for fleet procurement.
ALTERNATIVE OPTIONS
Approve Proposed Motion
Authorize $593,568.22 vehicle purchase to replace aging Police light-duty vehicles Other options brought by City Council.
STAFF RECOMMENDATION
Staff recommends the Proposed Motion.
CITY MANAGER REMARKS
The City Manager recommends approval. The lease program will be funded out of forfeiture asset funds.
PRIORITY POLICY STATEMENT
This item matches the following Priority Policy Statements:
Fiscal and Organizational Stability
Public Safety
Infrastructure and City Assets.
FISCAL IMPACT
The City’s Master Lease Agreement with Enterprise provides general terms related to vehicle trade-ins and leases. Supplemental “Schedules” that determine type of vehicles, number of vehicles and costs and annual payments with a 60-month lease determine the actual vehicle leases. The vendor would sell existing inventory and use sale proceeds to offset new vehicle lease costs as part of this agreement as allowed by the City ‘Disposal of Surplus Property Policy Number 4.1.6.
The City leases fourteen vehicles under its Master Lease Agreement with Enterprise. Staff proposes effectuating the lease schedules to lease an additional twelve PD light-duty vehicles through this program. The requested authorization for the initial five-year lease schedules would not exceed $99,230 per year, for a total $496,147 for the initial five-year leases. The Police Department Asset Seizure Fund (Fund 34) has sufficient appropriation in the FY 2024-25 Adopted Budget for the leases. This item would generate no General Fund impact.
BACKGROUND AND DISCUSSION
The Police Department Asset Seizure Fund results from Fullerton narcotics officer narcotics seizures, often in cooperation with federal agents, processed through and shared with federal or state agencies. These funds provide additional Police Department resources limited to law enforcement purposes to supplement and enhance, not supplant, appropriated agency resources.
The City purchased the twelve aging Police light-duty vehicles proposed for replacement through the Enterprise vehicle lease schedules using Police Department Asset Seizure Funds and do not appear on the Public Works Vehicle Replacement Schedule for the Internal Service Fund allocation. 837A 2020 Ford Fusion
838A 2020 Kia Sorento
849B 2020 Ford Fusion
851A 2019 Dodge Charger
853D 2018 GMC Acadia
860C 2019 Dodge Charger
867B 2020 Ford Fusion
869C 2020 Ford Fusion
884C 2019 Dodge Charger
892B 2020 Ford Fusion
897A 2019 Dodge Charger
899A 2019 Dodge Charger
The Police Department needs to replace light-duty vehicles with high maintenance needs at a quicker rate than currently available given fiscal conditions and the new vehicle market.
The requested authorization would allow the City to enter supplemental lease schedules to the Master Equity Lease Agreement with Enterprise Fleet Management, Inc. approved by City Council on July 5, 2022. The lease authorization would have an initial five-year term to provide twelve light-duty fleet replacement vehicles, not to exceed $99,230 per year during the initial five-year lease term. The lease cost includes the upfitting cost for radios, sirens, lightbars, etc. The City would allow Enterprise to sell twelve City-owned vehicles through this program. Enterprise estimates the vehicle sales would generate approximately $127,000 to offset lease costs.
Staff seeks authorization to add future additional supplemental lease schedules beyond the pre-existing fourteen and the requested twelve vehicles to the Master Equity Lease Agreement with Enterprise Fleet Management, Inc. should the City find the program successful and cost effective for fleet procurement. Staff would conduct cost benefit analyses prior to doing so and adhere to the City Purchasing Policy.
The Police Department may request adding police vehicles beyond the fourteen existing and the twelve requested vehicles to the Master Equity Lease Agreement with Enterprise Fleet Management, Inc. if it finds the lease program successful and cost effective for fleet procurement. Staff would monitor the lease program with ongoing cost benefit analysis prior to requesting additional supplemental lease schedules and adhere to the City Purchasing Policy.
Enterprise would also review the vehicles leased to the City at least once a year as part of this program. This allows the City to trade a vehicle if a financial gain exists or if the vehicle does not meet the needs of the department. A financial gain would occur when the aftermarket value of the vehicle appreciates in value as opposed to when it depreciates. The automotive market has seen post-pandemic fluctuations which provide this resale opportunity.
Lease Agreement / Vehicle Costs
The City can add vehicles to the Master Agreement with Enterprise through approved Enterprise lease schedules. The Master Agreement allows cooperative purchasing in accordance with City procurement policies to get the most competitive pricing on vehicles. Sourcewell is a cooperative purchasing State agency that competitively solicited bids for various products and services establishing predetermined pricing for other governmental agencies, including vehicles. The City would lease the twelve vehicles from Enterprise through Sourcewell Contract Number 030122-EFM which expires April 28, 2026. Staff attached the lease schedules and Sourcewell contract to this report.
City Maintenance
Staff anticipates minimal maintenance requirements for these leased vehicles due to the newness of the vehicles. Maintenance would consist of vehicle inspections, tire rotation and/or replacement, fuel, fluid refill, etc. Staff estimates the average in-house maintenance cost of a single leased vehicle would total approximately $2,175 a year per vehicle or $26,100 a year for twelve vehicles. This costs significantly less than the $37,688 in maintenance in FY 2023-24 for the twelve vehicles the City would replace through this program.
Attachments:
Attachment 1 – Enterprise Fleet Management Vehicle Lease Schedules Attachment 2 – Lease Replacement Pricing Worksheet
Attachment 3 – Sourcewell Contract 030122-EFM
cc: City Manager Eric J. Levitt
Police Department Enterprise Lease
February 18, 2025 - Page 2