HomeMy WebLinkAbout07 APPROVE AGREEMENT WITH ENTERPRISE FLEET MANAGEMENT INC.
Agenda Item_______
Reviewed:
AGENDA REPORT
City Manager_______
Finance Director_______
MEETING DATE:APRIL 7, 2026
TO:ALDO E. SCHINDLER, CITY MANAGER
FROM:MICHAEL GRISSO, DIRECTOR OF PUBLIC WORKS
SUBJECT:APPROVEAGREEMENT WITH ENTERPRISE FLEET
MANAGEMENT, INC.
SUMMARY:
The City currently owns and maintains a fleet of 196 vehicles assignedto various
departments, rangingfrom light-duty sedansandpolice pursuit vehicles tospecialty heavy-
duty trucks. To increase flexibility and efficiency of the City’s vehicle acquisition process,
staff is recommendingthe City Council approve a Master Equity Lease Agreement with
Enterprise Fleet Management.
RECOMMENDATION:
Recommendthe City Council:
1.Approve the Master Equity Lease Agreement with Enterprise Fleet Management,
Inc. and authorize the City Manager to execute necessary documents in support of
the Master Equity Lease Agreement on behalf of the City;
2.Authorize the City Manager to approve as-needed lease agreements for newand/
or replacementvehicles identified within theFiscal Year 2025 – 26 approved budget
on behalf of the City; and
3.Authorize the City Manager to declare vehicles to be replaced under Enterprise
lease agreements as surplus items that arenot required for public use, and approve
such vehicles to be auctioned.
FISCAL IMPACT:
There is no immediate fiscal impact associated with the recommended actions. Each year
the various city departmentsoutline their vehicle replacement needs and request
appropriate the funding through the annual budget process. A total cost of ownership
evaluation will be conducted on each requested vehicle, and a lease or purchase option
will be recommended within the annual budget. City Council will retain the discretion and
approval of requested replacements to be included in the budget adoption process.
City Council AgendaReport
Enterprise Fleet Management
April 7, 2026
Page 2
CORRELATION TO THE STRATEGIC PLAN:
This item contributes to the fulfillment of the City’s Strategic Plan Goal C: Financial
Strength. Specifically, this item supports Strategy #3, which among other items, is to identify
opportunities to improve cost neutrality.
BACKGROUND AND DISCUSSION:
As the needs and services of the City continue to growand adapt, staff continues to
evaluate new opportunities to reduce costs and create efficiencies. Traditionally, City
vehicles arepurchased and maintained by City staffuntil they reach the end of their useful
life, at which time they are sold at a local auction and replaced. At times, it may be
advantageous for the City to procure select vehicles through a leasing agreement in-lieu of
direct purchase. Entering into an Equity MasterLeaseAgreement (Agreement) with
Enterprise Fleet Management, Inc. (Enterprise) provides the City with an alternative
procurement option, which will reduce overall costs by alleviating high upfront costs and
long lead times.
Enterprise fleet leasing will also support the City’s efforts and compliance with California
Air Resources Board Advanced Clean Fleets (ACF) regulation. Under ACF requirements,
and where feasible, the City must ensure new purchases of eligible medium and heavy-
duty vehicles are zero-emission vehicles beginning in 2027. Enterprise can assist the City
in sourcing and leasing zero-emission vehicles that support this initiative as applicable.
Enterprise purchases approximately 1 million vehicles each year as part of their rental car
business. Enterprise also holds a cooperative contract with Sourcewell (Contract No.
030122) in which savings are passed on to government agencies through leasing
programs. Under the proposed agreement, vehicles are procured through an equity lease
plan, a modified financing structure with terms ranging from one to five yearsdepending on
departmental needs.
Annually, Enterprise will evaluate fleet age, mileage, maintenance records, and potential
resale value, providing replacement recommendations based on market trends, local
auction results, and a life-cycle cost analysis, which defines how long vehicles should be
retained before their resale value begins to rapidly decline. Enterprise’s cradle-to-grave
system is long-standing and demonstrates the ability to acquire vehicles under market
value and obtain resell values higher than local auctions. As part of an equity lease option,
profits from the sale of vehicles are applied to the acquisition of future replacement vehicles,
further reducing the City’s cost.
Other benefits include:
Expedited delivery;
Reduced overall age of the City’s fleet and associated maintenance savings;
City Council AgendaReport
Enterprise Fleet Management
April 7, 2026
Page 3
Improvedfuel efficiency; and
Modern safety features.
Enterprise’s program has no mileage restrictionsandno abnormal wear and tearorearly
termination penalties. At the City’s request, Enterprisewillequipvehicleswith aftermarket
parts that suit the needs of the requesting department,and all manufacturer warranties are
extended to the City. Leasing provides an opportunity to minimize large capital outlays and
create a proactive replacement program.The City may elect to buy out and take ownership
of a vehicle at the end of the term.
The Finance,Public Works,andPoliceDepartments haveworked together to evaluate the
proposedlease agreement with Enterprise and support recommending the approval of the
Master Equity Lease Agreement with Enterprise. The City Attorney has reviewed the
agreementand approved as to form.
_____________________
Michael Grisso
Director of Public Works
Attachment:
1.Master Agreement with Enterprise Fleet Management
ATTACHMENT 1
Master Agreement with Enterprise Fleet Management