2016 Enterprise - Master Equity Lease AgreementCity of La Quinta
CITY COUNCIL MEETING: September 20, 2016
STAFF REPORT
AGENDA TITLE: APPROVE AGREEMENT WITH ENTERPRISE FLEET MANAGEMENT FOR
LEASE/REPLACEMENT OF THIRTEEN MOTORPOOL VEHICLES AND AUTHORIZE THE CITY
MANAGER TO EXECUTE THE AGREEMENT
RECOMMENDATION
Approve an agreement with Enterprise Fleet Management for a City motor pool lease
program and authorize the City Manager to execute the Agreement.
EXECUTIVE SUMMARY
The City operates 39 motor pool vehicles and 30 vehicles are over 10 years old.
Staff researched purchasing replacement vehicles and estimates that buying 4
vehicles per year will cost $104,000 per year.
Staff then explored leasing options, and found that leasing 13 vehicles for 5
years will cost approximately $96,000 per year; the lease option includes full
vehicle maintenance (less brakes/tires).
Six leasing companies were contacted and Enterprise Fleet Management
(Enterprise) was the only responsive company; their lease program
accommodates the small City fleet size and includes fleet management.
FISCAL IMPACT
Leasing cost for six months of 2016/17 is estimated at $48,000 for 13 vehicles (the
leased vehicles would not be in place until December 2016). Funds are available in the
Equipment Replacement Fund from the depreciation ($35,900, 501-0000-71113) and
the repair/fuel savings ($16,800, 501-0000-60676) accounts.
The leasing cost to replace 30 vehicles is projected to not exceed $213,620 annually.
Internal service allocations are budgeted annually from City departments. This is the
current cost City departments are charged to cover the maintenance and replacement
of pool vehicles. This annual projected expense will be phased in over a four-year
period depending on vehicle need. The need for additional leased vehicles will be
brought to City Council for approval.
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BACKGROUND/ANALYSIS
The City has 39 motor pool vehicles, 30 are over ten years old and in fair to poor
condition due to deferred replacement since 2012. The average cost for maintenance
(not including fuel) per vehicle is $110 per month.
Staff assessed purchasing replacement motor pool vehicles and determined that the
purchase of 30 vehicles over the next three years would cost approximately $780,000.
Staff researched leasing options which would allow the City to establish a five year
vehicle replacement plan and replace more aged vehicles with less upfront capital.
Leasing companies contacted include; Ford, the Chevrolet Dealer in La Quinta, Hertz,
ARI, Emkay Fleet Solutions, and Enterprise. Enterprise was the only responsive
company with a lease program for the City’s small fleet size.
Under the Enterprise program, each vehicle has an open-ended lease with no mileage
restrictions, abnormal wear clause, or early termination cost. The City will hold the
right to ownership and establish a long term vehicle operations and replacement
program without fluctuating annual expenses. Other southern California cities
participating in this program include: the Cities of Westminster, Garden Grove, Santa
Ana and Corona.
A plan to “right size” the fleet and provide the appropriate vehicle for each user’s
needs was developed. The plan replaces 13 vehicles the first year, 13 vehicles the
second year, and four vehicles the third year. Once fully implemented, the ten year
lease operation costs are projected to not exceed $213,620 annually (Attachment 1)
compared to the 2015/16 cost of $215,408.
Enterprise’s fleet management program provides a dedicated fleet manager who will
continually review the fleet, provide annual registration for each vehicle, manage
routine maintenance, assess vehicle use and value to maintain efficiency, and
recommend replacement based on cost metrics. Each open-ended lease provides
flexibility for exchanging, adding, or removing vehicles from the fleet. Enterprise Fleet
Management software allows complete transparency and will provide staff with the
ability to manage all fleet vehicles. The Enterprise smartphone app for drivers also
provides roadside assistance, fuel and repair locations, accident reporting, and
mileage tracking.
ALTERNATIVES
Purchase replacement vehicles for an average price of $26,000 per vehicle, which would
exceed the cost to lease 13 vehicles.
Prepared by: Steve Howlett, Facilities Director
Approved by: Frank J. Spevacek, City Manager
Attachment: 1. 10 Year Budget Forecast
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$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
FY15/16 FY16/17 FY17/18 FY18/19 FY19/20 FY20/21 FY21/22 FY22/23 FY23/24 FY24/25 FY25/26
Bu
d
g
e
t
Fiscal Year
10 Year Budget Forecast
Current Cost Fleet Budget Purchse Lease Fuel Maintenance
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