Consider renew of renewal of annual lease agreement with Enterprise Fleet Management and adding up to five additional units for the Park and Recreation Department to the annual lease.

This renewal would be the 2nd year of an open-end lease program with Enterprise Fleet Management for 42 trucks. Open-end leases have no early termination, mileage, or abnormal wear & tear penalties. The annual auction provision of this lease is expected to cover the cost of the next year's lease.

The Park and Recreation department is being added to the lease program with up to five new vehicles. 

In 2020, the City entered into a lease agreement with Enterprise Fleet Management in order to reduce the costs of the City's general fund fleet.

The general fund fleet can be characterized as an older and unsafe fleet with maintenance and repair costs increasing each year. Within a resource-restricted environment - as is the case with the General Fund - entering into a lease agreement is an economically viable option to bring the city's fleet up to current reliability, efficiency, and safety standards. This also provides a greater level of predictability for the annual budget and financial planning processes. The proposed lease agreement with Enterprise Fleet Management is available using the Sourcewell contract.

Maintenance and fuel savings, along with the equity value of the trucks after one year, will pay for the annual lease cost, resulting in a net zero cost to the city. Based on current projections, it is anticipated the program will result in annual net savings beginning in year two of approximately $52,000 and an estimated five year savings of $200,000 (inclusive of fuel and maintenance savings).

The annual cost of this lease will be approximately $210,000. With proceeds from the Enterprise auction of the trucks we return, the anticipated net fiscal impact to the City is expected to be from $0-$50,000.

The fiscal impact to the City is $0 - $50,000 after leased vehicles are returned to Enterprise auction. The City's Fleet Management Internal Service Fund (5121-5236) will be used for the expense of monthly lease payments, and receive revenue for the costs of departments participating in this program and from the auctioned vehicles.