TO: Board of Supervisors
FROM: Jason Martin, Deputy County Fire Chief
REPORT BY: Stacie McCambridge, Staff Services Manager
SUBJECT: Enterprise Fleet Management Lease for Light Vehicles
RECOMMENDATION
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Deputy County Fire Chief requests approval of and authorization for the Chair to sign Agreement 240174B and related sub agreements with Enterprise FM Trust for a maximum of $297,000 for the term October 1, 2023, through June 30, 2024, with an automatic renewal provision, for leasing light fleet vehicles.
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EXECUTIVE SUMMARY
The County Fire Department is requesting to enter a lease and related agreements with Enterprise FM Trust for the leasing of light duty vehicles. This request will identify an effective vehicle life cycle that maximizes potential equity at time of resale creating a conservative savings of over $101,175 in 10 years.
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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Is it currently budgeted? |
Yes |
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Where is it budgeted? |
Fire Fund |
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Is it Mandatory or Discretionary? |
Discretionary |
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Discretionary Justification: |
Allows County Fire newer vehicles with lower mileage, increased fuel efficiency and consistent pricing. |
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Is the general fund affected? |
No |
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Future fiscal impact: |
Cost of Enterprise Fleet Lease will be absorbed by the Fire Fund. |
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Consequences if not approved: |
County Fire will continue to budget for fleet replacement. Delays in production and delivery of fleet will extend replacement time and costs. |
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County Strategic Plan pillar addressed: |
Healthy, Safe, and Welcoming Place to Live, Work, and Visit |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulation 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.
BACKGROUND AND DISCUSSION
The County Fire Department is requesting to enter a lease and related agreements with Enterprise FM Trust for a maximum of $297,000 for the term October 1, 2023, through June 30, 2024, with an automatic renewal provision, for leasing of 10 light fleet vehicles. The lease would allow the department to identify an effective vehicle life cycle that maximizes potential equity at time of resale creating a savings of over $101,175 in 10 years. Benefits of the lease:
Shorten the current vehicle life from 14 years to 3.5 years.
Provide a lower sustainable fleet cost that is constant year to year.
Gain more than $35,500 in capital from the salvage of 7 vehicles in the first year.
Reduce maintenance expense to an average of $33 versus the current $218.
Reduce fuel costs through use of more fuel-efficient vehicles.
Increase employee safety with new vehicles (anti-lock brake standardization, stability control, back up cameras)
Access to all fleet management services to the needs of the county.
Supports County’s need for fleet evaluation for costs and best practices.
The requested lease will allow Napa County to leverage its buying power and utilize a controlled resale program which will lower total cost of ownership and in turn minimize operational spending. The County will also reduce fuel costs by 20% and reduce maintenance costs per unit with this lease. By leveraging an open-ended lease with Enterprise FM Trust, it will maximize cash flow and recognize equity from vehicles sold creating a future replacement fund. Fire will work with Enterprise Fleet Management to sell vehicles at an average of 109% above book value. By proactively planning vehicle purchases and not reactively replacing inoperable vehicles, the County will be able to replace its light duty vehicles over the course of 5 years while creating an annual savings of $2,971.
On August 31, 2023, County Fire presented the lease to the County Debt Committee. After review, the lease agreement was approved by the committee members. Agreement 240174B includes 1) Master Lease Agreement 2) Amendment to Lease Agreement 3) Maintenance Management and Fleet Rental Agreement 4) Agreement to Sell Vehicles 5) Consignment Action Agreement and 6) Authorized Signer Form.