DATE:
TO:
FROM:
AGENDA REPORT
November 10, 2025
Honorable Mayor and City Council
Fermin Preciado, Director of Devel
Phillip White, Director of Finance
Todd, Gutjahr, Public Works Anal
Item No. 15
ent Services/City Engineer
SUBJECT: Vehicle Fleet Lease Strategy Option Discussion RECOMMENDATION:
That the City Council review and discuss the vehicle fleet lease strategy option as presented by staff and provide direction.
BACKGROUND/DISCUSSION:
At the August 11, 2025, City Council Meeting, staff was directed to return to Council with information relative to a comprehensive lease strategy for the City's vehicle fleet. The City's vehicle fleet includes various vehicles used by staff for conducting daily business and operations to provide the following services to the public:
• Public Works Maintenance (Streets, Parks & Public Facilities) • Park Ranger
• Code Enforcement
• Community Services
• Fire Prevention
• City Hall Motor Pool
Generally, specialized vehicles or vehicles with significant aftermarket additions are less likely to be lease candidates. Accordingly, the vehicle fleet lease strategy option being presented does not include heavy-duty vehicles or equipment such as tractors, bucket trucks, fire apparatuses or other specialty vehicles or equipment. The vehicle fleet lease strategy option presented includes twenty-one (21) vehicles determined to be suitable vehicle lease candidates and are vehicles required by staff to provide the services to the public referenced above.
At the August 25, 2025, City Council Meeting, Council approved the purchase of a second Fire Department battalion chief vehicle. The purchase was approved by the City Council after a comparison of the lease option to the purchase option for this specific vehicle showed no appreciable cost savings.
It is important to note, the City's Police Department vehicles have historically been provided by the San Bernardino County Sheriff's Department (SBCSD). The FY25/26 Schedule A Law Enforcement Services Contract between the City and SBCSD includes twenty-eight (28) vehicles that include marked/unmarked units, command staff vehicles, police trucks and citizen patrol vehicles.
The following table includes the twenty-one (21) vehicles determined to be suitable vehicle lease candidates for the purpose of comparing a vehicle fleet lease strategy with the option to purchase the vehicles outright.
No.
Year
Type
Mileage
(Approx.)
Use
1 2006
Ford Ranger - Truck
120,421
Fire Prevention
2 2014
Ford Explorer - SUV
184,295
Park Ranger
3 2014
Toyota Tacoma - Truck
35,618
Community Services
4 2014
Ford F-250 - Truck
123,895
Public Works Maintenance (Streets)
5 2014
Chevrolet Colorado - Truck
87,235
Public Works Maintenance (Streets)
6 2014
Ford Escape - SUV
90,106
Public Works Maintenance (Parks)
7 2015
Ford F-150 -Truck
86,137
Public Works Maintenance (Parks)
8 2016
Ford F-150 -Truck
109,220
Public Works Maintenance (Streets)
9 2017
Chevrolet Colorado - Truck
67,825
Code Enforcement
10 2017
Chevrolet Colorado - Truck
61,201
Public Works Maintenance (Parks)
11 2017
Chevrolet Silverado 1500 - Truck
67,257
Public Works Maintenance (Parks)
12 2018
Ford Explorer - SUV
72,499
Code Enforcement
13 2018
Chevrolet Colorado - Truck
122,422
Park Ranger
14 2018
Chevrolet Colorado - Truck
74,923
Public Works Maintenance (Parks)
15 2020
Chevrolet Colorado - Truck
43,497
Code Enforcement
16 2022
Chevrolet Colorado - Truck
13,261
Code Enforcement
17 2022
Chevrolet Silverado 1500 - Truck 4x4
20,561
Public Works Maintenance (Parks)
18 2023
Chevrolet Traverse - SUV
6,354
City Hall Motor Pool
19 2023
Chevrolet 2500HD - Truck
25,794
Public Works Maintenance (Streets)
20 2023
Chevrolet 2500HD - Truck
13,005
Public Works Maintenance (Parks)
21 -
Chevrolet Colorado — Truck*
-
Fire Prevention (Fire Inspector)
*New vehicle required by Fire Department to perform new State law required fire inspections.
Staff contacted a vehicle fleet leasing vendor having current lease contracts with other government agencies to obtain estimates and information regarding a potential vehicle fleet lease strategy. The estimates and information obtained is based on the 21 vehicles that staff deemed suitable lease candidates including a new vehicle required by the Fire Department to perform and complete fire inspections required by new State law.
In order to provide a meaningful comparison, the following assumptions have been made.
Lease Option Assumptions:
➢ A 5-year lease term is standard for fleet lease contracts and is being used for this comparison. ➢ All lease candidate vehicles are replaced in years 1 and 6 in this comparison.
D. Maintenance costs in years 1-5 are equal to the purchase option.
Purchase Option Assumptions:
➢ A 10-year useful life is being used for the purchase option. ➢ All fleet vehicles are replaced in year 1 in this comparison. ➢ Maintenance costs in years 1-5 are equal to the lease option. Maintenance costs in years 6-10 are estimated at $4,500 per vehicle per year. This is additional vehicle maintenance and repair costs to maintain better condition, to extend useful life and maximize residual value.
The estimated cost comparison of both options is as follows:
Years 1-5
Years 6-10
Maintenance Costs for
years 6-10
Total Estimated 10-
year Cost
Lease Option
$726,673
$726,673
$0
$1,453,346
Purchase Option
$890,430
$0
$472,500
$1,362,930
*Assumes an estimated $4,500 per year per vehicle for additional maintenance and repair costs for years 6 through 10 Staff has also prepared the following table of financial and non -financial considerations for the City Council's discussion:
Consideration
Fleet Option
Purchase Option
(Historical Practice)
Initial Cost
Lower
Higher
Annual Cost
Steady
Variable
Financing Cost
Yes
N/A
Initial Maintenance Costs
Equal
Equal
Long-term Maintenance Costs
N/A
Yes
Total Cost
Higher
Lower
Vehicle Reliability*
Higher
Lower
Estimated Service Years*
Lower
Higher
Administrative Level of Effort*
Lower
Higher
Budgetary Flexibility*
Lower
Higher
*Consideration is non -financial
To summarize, the lease option would provide a more efficient solution at a higher financial cost.
Efficiency is gained because of having newer vehicles, less maintenance/repairs, a streamlined replacement process and a known and steady budget. The higher fmancial cost is related to the costs associated with the lease program including financing vehicles that are routinely replaced.
While historically the City has purchased vehicles, the model used above is different than historical practice. Historically, the City purchases vehicles and keeps them running as long as possible. Repairs and maintenance is limited to keeping them operational, not to maximize replacement value. The model above is presented to provide a more meaningful and useful comparison as the Council deliberates changing the practice. Additional information including cost estimates for the lease option and the purchase option will be provided in the presentation for this item at the City Council Meeting.
FISCAL IMPACT:
The fiscal impact is dependent on the City Council's provided direction.
C
Approved by:_