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CONSENT CALENDAR
City of San Bernardino
Request for Council Action
Date: June 17, 2026
To: Honorable Mayor and City Council Members
From: Lynn Merrill, Director of Public Works
Department: Public Works
Subject: Request to Increase Payment Authorization for the Enterprise Fleet Master Equity Lease Agreement for Fiscal Year 2025-2026 and Establish Future Fiscal Years Payment Authorization Contingency (All Wards)
Recommendation:
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2026-087,
1. Authorizing the Director of Finance and Management Services to approve an increase to the Fiscal Year 2025-2026 payment authorization for the Enterprise Fleet Master Equity Lease Agreement in the amount of $464,389.21, increasing the total authorized amount to $2,393,517.73, for delayed down payment obligations and ongoing lease payments; and
2. Beginning in FY 2026-27, authorize a contingency of up to 5% within the Council-approved payment authorization for Enterprise Lease-related charges, subject to available budget, purchasing requirements, City Manager and Finance review.
City Manager's Comments
The City Manager requests City Council authorization.
Executive Summary
Public Works is requesting authorization to increase the existing payment authorization for the Enterprise Fleet Master Equity Lease Agreement for Fiscal Year 2025-2026 due to down payment obligations that were anticipated in the prior fiscal year but not invoiced until the current fiscal year due to vehicle delivery and upfitting timelines.
While the previously approved staff report contemplated utilizing down payment funding through the carryover process as vehicles were delivered and placed into service, the adopted resolution did not specifically authorize the additional payment 3 3
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authority necessary to expend those funds in Fiscal Year 2025-2026. As a result, $464,389.21 in delayed down payment obligations must be added to the current fiscal year authorization, increasing the total authorized amount to $2,393,517.73.
Background
On August 2022, the City entered into a Master Equity Lease Agreement to modernize the City’s fleet and replace aging vehicles with newer, safer, and more reliable equipment. Since implementation of the leasing program, vehicles have continued to be delivered and placed into service based upon manufacturer production schedules and completion of required upfitting.
On April 16, 2025, the Mayor and City Council approved Resolution 2025-276 authorizing funding for the Enterprise Fleet Master Equity Lease Agreement for Fiscal Years 2024-2025 and 2025-2026. Specifically, Council approved:
$2,131,624.74 for Fiscal Year 2024-2025 from the General Fund to support:
Lease payments for the City's existing 122-vehicle fleet; oA one-time down payment of $777,241.53 for 45 new vehicles; and oThree months of lease payments for the 45 new vehicles. o
$1,929,128.52 for Fiscal Year 2025-2026 from the General Fund to support:
oOngoing lease payments for the City's fleet.
As discussed in the previously approved staff report, vehicle deliveries remained dependent upon factory production schedules and completion of necessary upfitting, including installation of emergency equipment, cages, lights, push bars, and other operational components required before vehicles could be placed into service.
Enterprise does not begin billing the City until vehicles are fully delivered, accepted, and operationally ready for service.
Due to these delays, several vehicles were not delivered and fully upfitted within the anticipated timeframe, and the associated down payments were therefore not invoiced during the prior fiscal year. Although the original staff report contemplated that down payment funding may need to carry forward as vehicles were delivered, the adopted resolution did not specifically authorize the continued use of that payment authority into Fiscal Year 2025–2026.
The current purchase order does not have sufficient remaining authority to process the outstanding invoices. Approval of this item will allow Public Works and Purchasing to complete the necessary PO change order and allow finance to process payment.
During Fiscal Year 2024-2025, the City established a purchase order and budget authorization in the amount of $2,131,624.74 for obligations associated with the Enterprise Fleet Master Equity Lease Agreement, including anticipated monthly lease payments and vehicle down payments. However, actual expenditures processed during the fiscal year totaled only $1,683,742.96, resulting in an unexpended balance 3 3
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of $447,881.78. This variance was not the result of reduced obligations, but rather delayed invoicing of vehicle down payment charges that were not billed and paid prior to the close of the fiscal year. As a result, these outstanding obligations carried forward into Fiscal Year 2025-2026 and, following final reconciliation of invoices received from the lessor, now total $464,389.21. Accordingly, the City's total lease obligations were not reduced, but instead shifted between fiscal years due to the timing of vendor invoicing and payment processing.
Discussion
Public Works is requesting approval to increase the funding authorization for the Enterprise Fleet Master Equity Lease Agreement, as the adopted resolution did not specifically authorize the additional payment authority necessary to expend the funds during Fiscal Year 2025-2026.
Down payment obligations that were anticipated to be paid in the prior fiscal year have been paid during the current fiscal year using authorized funds that were originally intended for ongoing monthly lease payments. While sufficient budget exists within the overall fleet budget at this time, the currently authorized payment amount is no longer adequate to cover the remaining obligations for Fiscal Year 2025-2026. Of the $777,241.53 authorized for down payment obligations in Fiscal Year 2024-2025, $329,359.75 was invoiced and paid during Fiscal Year 2024-2025. The remaining $447,881.78 was not invoiced until Fiscal Year 2025-2026 due to manufacturer production delays, vehicle delivery schedules, and required upfitting activities.
Although funding was previously approved by the Mayor and City Council, the associated payment obligations did not occur until vehicles were delivered and accepted into service. As a result, the delayed down payment obligations were paid during Fiscal Year 2025-2026 using existing lease payment appropriations, creating the need for additional payment authorization to maintain sufficient authority for the remainder of the fiscal year.
This request increases the authorized payment amount for Fiscal Year 2025-2026 by $464,389.21, increasing the total authorized amount from $1,929,128.52 to $2,393,517.73.
At this time, all required down payments have been completed and no additional vehicles are being added to the lease program. The City’s current monthly lease obligation is approximately $160,000 per month, subject to minor fluctuations due to fees and timing.
Due to operational vehicle needs, unforeseen lease-related costs, and vehicle registration, licensing, and DMV renewal fees that may occur throughout the fiscal year, staff is requesting a contingency of five percent (5%) within the annual payment authorization. The Enterprise Master Equity Lease Agreement authorizes certain additional charges beyond the scheduled monthly lease payments, including registration and titling costs, administrative fees, mileage-related adjustments, vehicle 3 3
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disposition expenses, and other costs incurred in connection with the operation and administration of the leased fleet. The requested contingency will provide sufficient flexibility to address these routine and unanticipated costs while ensuring uninterrupted fleet operations and compliance with the terms of the Agreement.
Fiscal Year 2026-2027 and future years will reflect the ongoing annual lease cost associated with the existing fleet lease program, as all delayed down payment obligations will have been satisfied during the current fiscal year.
The base annual lease obligation for Fiscal Year 2026-2027 is projected at $1,929,128.52. With the addition of the 5% contingency, the total requested payment authorization for Fiscal Year 2026-2027 is $2,025,584.95. The proposed FY26/27 fleet budget being adopted supports this action.
2021-2025 Strategic Targets and Goals
This request aligns with the Key Strategic Goal No. 1 – Improved Operational & Financial Capacity, to create an asset management plan and supports the framework for spending decisions. Approval of this item ensures the City has the proper payment authorization in place to meet existing fleet lease obligations, maintain reliable vehicles for City operations, and continue managing fleet costs in a fiscally responsible manner.
Fiscal Impact
There is no additional appropriation requested because sufficient funding exists in the adopted Fleet Fund budget. This action increases payment authorization under the Enterprise Lease Agreement for fiscal year 2025-2026 by $464,389.21.
Conclusion
It is recommended that the Mayor and City Council of the City of San Bernardino, California, adopt Resolution No. 2026-087,
1. Authorizing the Director of Finance and Management Services to approve an increase to the Fiscal Year 2025-2026 payment authorization for the Enterprise Fleet Master Equity Lease Agreement in the amount of $464,389.21, increasing the total authorized amount to $2,393,517.73, for delayed down payment obligations and ongoing lease payments; and
2. Beginning in FY 2026-27, authorize a contingency of up to 5% within the Council-approved payment authorization for Enterprise Lease-related charges, subject to available budget, purchasing requirements, City Manager and Finance review.
Attachments
Attachment 1 Resolution No. 2026-087
Attachment 2 Enterprise Fleet Management Master Equity Lease Agreement
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Attachment 3 Resolution 2025-276
Attachment 4 Leased Vehicles List
Attachment 5 List of 45 Vehicles on Order
Ward:
All Wards
Synopsis of Previous Council Actions:
April 16, 2025 Adoption of Resolution 2025- 276, Request to approve $2,131,624.74 for FY24-25 and $1,929,128.52 for FY25-26 from General Fund Balance to fund the Enterprise Fleet Master Equity Lease Payments
August 3, 2022 Adopt a Master Equity Lease Agreement for Light Duty Vehicles.
CC: Eric Levitt, City Manager