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HomeMy WebLinkAbout11 - CC-8 - Authorize Contract, Approve Vehicle Pur. - 9/1/2015CITY COUNCIL AGENDA REPORT MEETING DATE: SEPTEMBER 1, 2015 ITEM NUMBER: CC -8 SUBJECT: AUTHORIZE CONTRACT, APPROVE VEHICLE PURCHASES AND BUDGET ADJUSTMENT FOR POLICE DEPARTMENT VEHICLES DATE: AUGUST 20, 2015 FROM: FINANCE DEPARTMENT PRESENTATION BY: ROBERT SHARPNACK, CHIEF OF POLICE FOR FURTHER INFORMATION CONTACT: ROBERT SHARPNACK, CHIEF OF POLICE, (714) 754-5117 RECOMMENDED ACTIONS: 1. Authorize lease contract with Enterprise Fleet Management, Inc. 2. Approve purchase of eight additional unbudgeted vehicles for a total of 17 vehicles in FY 2015-16. 3. Approve budget adjustment to fund vehicle purchases. BACKGROUND The Police Department is requesting City Council authorization of the lease agreement with Enterprise Fleet Management, Inc. for Police Department command staff vehicles. This request is being made in accordance with MOU requirements to provide vehicles for these specified Police Department executive classifications. When this lease was signed in May 2011, there were uncertainties regarding Fleet Services support of the vehicles, as well as budget and staff constraints. Leasing the vehicles with a maintenance agreement was the solution chosen at that time to comply with the MOU requirements. $282,280 was approved in the FY 2015-16 Budget for the purchase of one replacement patrol vehicle, and eight replacement vehicles for the ten vehicles currently being leased. Subsequent to approval of the FY 2015-16 Budget, the Police Department has requested eight additional vehicles: five additional replacement patrol vehicles, two pick-up trucks, and one replacement vehicle for the Chief of Police. The Police Department's plan is to replace eight of the ten leased vehicles incrementally throughout the fiscal year. Four leased vehicles will be returned prior to their lease expiration in June 2016. Of these four leased vehicles being returned early, two are no longer in service and two have high mileage. The two vehicles that are not in service will not be replaced with new vehicles. Returning these four vehicles early will result in lease cost savings to the City of approximately $6,000. ANAI YSIS The existing lease contract with Enterprise Fleet Management, Inc. currently requires City Council authorization. This will enable staff to proceed with use of six of the ten currently leased vehicles, returning four vehicles early, and closing the lease in June 2016. The Police Department received appropriations of $282,280 in the FY 2015-16 Budget for the purchase of one replacement front line patrol vehicle and eight replacement vehicles in exchange for the ten leased vehicles whose lease is due expire in June 2016. In July 2015, the CEO approved the purchase of five additional patrol vehicles to replace current vehicles no longer suitable for continued service and one new vehicle for the Chief of Police to replace his current leased vehicle. And, on August 4, 2015, the City Council approved converting a Code Enforcement Officer position into a Park Ranger position within the Police Department to assist the Police Department in certain law enforcement activities. Purchasing two Park Ranger vehicles was approved by the CEO to support the increased number of Park Rangers. In summary: • Ten vehicles were leased and eight replacement vehicles will be purchased; • Six front line patrol vehicles will be replaced by six purchased vehicles; • Two new pick-up trucks will be purchased for Park Ranger use; • One new vehicle has been purchased for the Chief of Police. All vehicles will be purchased using the National Joint Powers Alliance, a national cooperative purchasing service used by public agencies throughout the nation (including the County of Orange) to obtain competitively bid prices. FISCAL REVIEW The $282,280 budgeted in FY 2015-16 is insufficient to purchase all 17 vehicles now being requested. Approval of a budget adjustment of $372,705 is being requested at this time in order to fund the cost of these vehicle purchases. One new vehicle has been purchased for the Chief of Police. The updated budget amount for all 17 vehicles will be $654,985. The attached Budget Adjustment #16-004 increases the FY 2015-16 appropriation by $372,705. Funding for these purchases is available in FY 2015-16 Fund 601 balance available. ALTERNATIVES CONSIDERED Staff considered whether to lease or purchase future replacement vehicles. It was determined that purchasing was the more cost effective alternative when revenue received from selling the vehicles after use was factored into the total cost of ownership. 2 CONCLUSION The existing lease agreement requires City Council authorization in order to proceed with use of six of the ten currently leased vehicles, returning four leased vehicles early, and closing the lease in June 2016. The Police Department's request for 17 vehicles has been approved by the CEO, and the Finance Department has determined that additional funds are available to purchase all 17 vehicles. One new vehicle has been purchased for the Chief of Police. Staff recommends approval of the recommended actions. ROBERT SHARPNACK Chief of Police STEPHEN DUNIVENT Interim Finance Director Attachments: 1. Lease Aareement with Enterprise FM Trust 2. Vehicle Purchase Cost Summary 3. Budget Adjustment #16-004 3