Laserfiche WebLink
File Number: 15-165 <br />purchase date, which caused new vehicles to sit dormant for 3 to 4 years before the vehicle <br />actually entered service. The City stored extra police vehicles due to the low number of police <br />vehicles currently in service, especially when a vehicle was taken out of service for an <br />extended period of time or was rotated out of the fleet. <br />Prior to the economic downturn, patrol vehicles were on a 3 -year replacement cycle and <br />non -patrol vehicles were replaced at 10 years. When operating budgets were reduced, the <br />3 -year vehicle replacement cycle was amended to add two more years for both patrol vehicles <br />and sedans, or 5 years and 12 years respectively. Both types of vehicles are now replaced at <br />the end of their lifecycle and sometimes beyond their useful life. This means that <br />Administrative/Criminal Investigations vehicles are replaced every 10 to 12 years and Patrol <br />vehicles are replaced every 4 to 6 years. Since the institution of the expanded replacement <br />schedule, it has become evident that the useful life of patrol vehicles is reached at <br />approximately the 3 -year mark, when mileage reaches 85,000 to 95,000 miles. Beyond this <br />point, transmissions on patrol vehicles usually start to fail and other costly repairs make <br />maintaining the vehicle cost prohibitive. <br />DISCUSSION <br />Extending the leasing program will continue to improve current vehicles' conditions, which <br />have deteriorated over time due to the extended and inconsistent replacement cycle. <br />Staff recommends that the City Council approve the second phase of the lease/ purchase <br />program and agreement to acquire up to15 additional police vehicles with any lending <br />company in an amount not to exceed the financing rate of 4.25%. <br />Fiscal Impact <br />The estimated annual payment amount of $246,500 is included in the proposed 2015-16 and <br />in the 2016-17 budget (690-16-003-8110 & 690-16-003-8120). <br />The average cost of a fully equipped patrol vehicle is $48,000, not including the cost of the <br />computer that currently costs $5,866 each. The average cost of a detective vehicle ranges <br />from $25,000 to $33,000. This is a three-year lease program not to exceed $246,500 per <br />year, for a total commitment of $739,500. <br />The City has used lease/purchase financing in the past to acquire fire apparatus and <br />computer hardware/software. As in this case, the lender purchases the equipment and then <br />leases it to the City for a specified period (up to 3 years). At the end of the lease period, the <br />lender sells the equipment to the City for $1 and the City becomes the legal owner. . The <br />municipal lease includes most necessary equipment/outfitting (computer, if needed, is <br />additional), and a 3-year/100,000 mile bumper -to -bumper warranty. <br />The Police Department will include local dealerships and lending institutions in the competitive <br />bid process. <br />The first payment will occur on or after July 1, 2015, after commencement of the lease. Staff <br />anticipates that a lease program can save on vehicle maintenance costs over time, since the <br />City of San Leandro Page 2 Printed on 3131/2015 <br />