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THE CITY OF 16 PLE ASANTONe CITY COUNCIL AGENDA REPORT August 19, 2014 Operations Services TITLE: APPROVE AN AGREEMENT WITH ENTERPRISE FLEET MANAGEMENT FOR A SIXTY MONTH VEHICLE LEASE PROGRAM SUMMARY The City's current fleet for all departments, excluding police patrol vehicles, fire apparatus and para-transit buses, includes a total of 138 vehicles. While the City maintains a vehicle replacement program intended to regularly replace vehicles, in an effort to realize cost savings and "stretch out" the life of vehicles, many of these vehicles are nearing 20 years old requiring increased maintenance due to their age and general condition. In an effort to reduce future vehicle replacement and repair costs, staff is recommending a Lease Agreement with Enterprise Fleet Management that would provide the City with new leased vehicles in lieu of the City purchasing new vehicles from an auto dealership. During the first year of the recommended program, staff would replace 42 of the 138 vehicles for an estimated annual amount of $217,577, excluding tax and resale for current vehicles. Additional vehicles would be replaced in subsequent years as needed. In reviewing the program, staff has determined that utilizing the Enterprise Fleet Management Program will result in reduced acquisition and maintenance costs, and improved fuel efficiency and safety features realized from replacing older vehicle with new more technologically advanced vehicles. In addition, the program will result in a higher resale value when the vehicles are returned to Enterprise at the end of the five year lease. RECOMMENDATION Authorize the City Manager to execute the Master Lease Agreement, and related documents, included as Attachment 1, establishing a sixty (60) month term vehicle lease program with Enterprise Fleet Management. FINANCIAL STATEMENT The estimated first year lease amount is $217,577, not including sales tax, aftermarket outfitting or expected return on equity at the end of the lease which is less than the $500,000 currently allocated to the Vehicle Replacement Internal Services Fund for Fiscal Year 2014/15.