CC 2017-04-25_09f Police Fleet Leasing Program
MEMORANDUM
TO: CITY COUNCIL
FROM: BEAU D. PRYOR, ACTING CHIEF OF POLICE
SUBJECT: CONSIDERATION TO AUTHORIZE AN AWARD OF CONTRACT FOR
POLICE FLEET LEASING PROGRAM INCLUDING VEHICLES,
FINANCING AND DECLARING EXISTING VEHICLES AS SURPLUS
PROPERTY
DATE: APRIL 25, 2017
RECOMMENDATION:
It is recommended that the City Council: 1) award a bid for the purchase of nine police
patrol vehicles to Mullahey Ford of Arroyo Grande, CA; 2) enter into a contract for lease
financing with California First Leasing Corporation of Irvine, CA; 3) adopt a Resolution
declaring the existing police patrol vehicles as surplus and authorizing their sale; and 4)
authorize the City Manager to execute all necessary documents.
FINANCIAL IMPACT:
This expenditure is to be funded out of the approved Police Department FY 2016-17 budget
under debt service – leasing. The total amount of $282,551.75 includes vehicle purchases,
manufacturer’s extended service contract and lease financing. It does not include the
upfitting costs for each vehicle; however, the upfitting costs will be offset by the sale of
existing vehicles with an estimated combined value of $130,000. There will be additional
costs associated with necessary new hardware for each vehicle to include mobile data
computers (MDC’s), in-car video cameras and body-worn cameras. Costs associated with
the necessary new hardware will be paid for from the State COPS Block Grant Fund. The
annual lease payment of $74,846.34 will come from the approved $75,846 currently in the
debt service account. The lease is for four (4) years with a $1.00 purchase option at the
end of the lease. The vehicles will be on warranty and an extended service contract during
the term of the lease.
BACKGROUND:
The Police Department introduced the fleet leasing program in 2008 and it has proven to be
a viable and cost effective alternative to traditional purchasing. The vehicles are covered
by a manufacturer’s extended service contract during the entire term of the lease which has
proven valuable at reducing the annual cost of fleet maintenance. The $1.00 end of lease
purchase option allows the vehicles to be declared as surplus and sold to cover the
equipment upfitting costs each time a new lease program is approved.
Item 9.f. - Page 1
CITY COUNCIL
CONSIDERATION TO AUTHORIZE AN AWARD OF CONTRACT FOR POLICE
FLEET LEASING PROGRAM INCLUDING VEHICLES, FINANCING AND
DECLARING EXISTING VEHICLES AS SURPLUS PROPERTY
APRIL 25, 2017
PAGE 2
ANALYSIS OF ISSUES:
The current police fleet operates (9) marked police patrol vehicles. This includes (6) patrol
vehicles; (2) canine vehicles; and (1) supervisor vehicle. This proposal calls for replacing
and maintaining the same number of marked police patrol vehicles.
A Vehicle Selection Committee was formed in the Police Department and members of the
committee had the opportunity to evaluate a number of police rated vehicles. The
committee unanimously recommended switching from the Dodge Charger to the Ford
Explorer for the entire patrol vehicle fleet. The Ford Explorer addresses specific needs for
the canine and supervisor vehicles due to their larger carrying capacity. Both the canine
and supervisor vehicles are required to carry significantly more equipment including built in
kennels for the canine vehicles and additional emergency response equipment for the
supervisor vehicle. The Ford Explorer also addresses the need for greater capacity in the
Patrol function due to all of the technological equipment required for each vehicle. This
includes mobile data computers (MDC’s), radar units, in-car video cameras, license plate
readers, traffic cones, mobile field force equipment, rifles, shotguns, less lethal shotguns,
etc. The committee is currently researching the best options for equipment upfitting and will
work with the chosen vendor(s) to design and standardize the finished vehicles. Upfitting
includes light bars, sirens, radios, mobile data computers, in-car video cameras, vehicle
graphics, etc.
It is recommended that the City Council award a purchase contract to Mullahey Ford in the
amount of $282,551.75, as their quote came in less than the State contract utilized by
larger jurisdictions. Additional benefits include purchasing from a local Arroyo Grande
vendor and having the convenience of a local service department for the patrol vehicle
fleet.
It is recommended that the City enter into a municipal lease purchase agreement with
California First Leasing Corporation, an affiliate of California First National Bank, with a
lease financing rate of 3.77%, which results in four annual payments of $74,846.34.
California First Leasing Corporation is headquartered in Irvine, CA. Other bids for financing
were Ford Credit at 5.20% and The Bancorp at 5.85%.
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
- Recommended Alternative:
It is recommended that the City Council: 1) award a bid for the purchase of
Item 9.f. - Page 2
CITY COUNCIL
CONSIDERATION TO AUTHORIZE AN AWARD OF CONTRACT FOR POLICE
FLEET LEASING PROGRAM INCLUDING VEHICLES, FINANCING AND
DECLARING EXISTING VEHICLES AS SURPLUS PROPERTY
APRIL 25, 2017
PAGE 3
nine police patrol vehicles to Mullahey Ford of Arroyo Grande, CA; 2)
approve an agreement for lease financing with California First Leasing of
Irvine, CA; 3) adopt a Resolution declaring the existing police patrol vehicles
as surplus and authorizing their sale; and 4) authorize the City Manager to
execute all necessary documents.
- Do not award the bid and direct staff to seek new bids; or
- Provide direction to staff.
ADVANTAGES:
The proposed plan will continue to provide for the police fleet leasing program, update the
police vehicle fleet, maintain standardize equipment, reduce maintenance costs and
maintain residual values on the existing fleet for surplus sale.
DISADVANTAGES:
The disadvantage of approving the recommended action is that it will commit to another
four year lease program for the police fleet. Costs would increase in the future if it was
determined to return to an ongoing purchase program.
ENVIRONMENTAL REVIEW:
No environmental review is required for this item.
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted at City Hall and on the City’s website in accordance with
Government Code Section 54954.2.
Attachments:
1. Proposal from Mullahey Ford
2. Proposal for financing from California First Leasing Corporation
3. Proposal for financing from Ford Credit
4. Proposal for financing from The Bancorp
Item 9.f. - Page 3
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE DECLARING VEHICLES AS
SURPLUS AND AUTHORIZING THEIR SALE
WHEREAS, the City of Arroyo Grande has certain vehicles which are no longer used or
needed as part of the police fleet leasing program; and
WHEREAS, the vehicles can be classified as surplus property and made available for
sale.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby declare as surplus the vehicles described in Exhibit A, attached
hereto and incorporated herein by this reference, and authorizes their sale.
On motion of Council Member ___________________, seconded by Council Member
__________________, and on the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
The foregoing Resolution was passed and adopted this 25th day of April, 2017.
Item 9.f. - Page 4
RESOLUTION NO.
PAGE 2
JIM HILL, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
ROBERT McFALL, INTERIM CITY MANAGER
APPROVED AS TO FORM:
HEATHER WHITHAM, CITY ATTORNEY
Item 9.f. - Page 5
EXHIBIT A
SURPLUS VEHICLES AVAILABLE FOR SALE AND/OR AUCTION
VEHICLES:
1. 2013 Dodge Durango
(Unit #4601)
VIN #1C4SDJFTXDC657798
2. 2013 Dodge Charger
(Unit #4602)
VIN #2C3CDXAT9DH608804
3. 2013 Dodge Durango
(Unit #4603)
VIN #1C4SDJFT8DC657797
4. 2013 Dodge Charger
(Unit #4604)
VIN #2C3CDXAT2DH610409
5. 2013 Dodge Charger
(Unit #4605)
VIN #2C3CDXAT0DH610411
6. 2013 Dodge Charger
(Unit #4606)
VIN #2C3CDXAT9DH610410
7. 2013 Dodge Charger
(Unit #4607)
VIN #2C3CDXAT5DH608802
8. 2013 Dodge Durango
(Unit #4608)
VIN #1C4SDJFT1DC657799
9. 2013 Dodge Charger
(Unit #4609)
VIN #2C3CDXAT7DH608803
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ATTACHMENT 1
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ATTACHMENT 2
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ATTACHMENT 3
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ATTACHMENT 4
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