CC 2015-07-28_08f Award Bid Police Fleet LeasingMEMORANDUM
TO: CITY COUNCIL
FROM: STEVEN N. ANNIBALI, CHIEF OF POLICE
SUBJECT: CONSIDERATION TO AUTHORIZE AN AWARD OF BID FOR POLICE
FLEET LEASING PROGRAM INCLUDING VEHICLES, FINANCING
AND UPFITTING, AND DECLARING EXISTING VEHICLES AS
SURPLUS PROPERTY
DATE: JULY 28, 2015
RECOMMENDATION:
It is recommended that the City Council: 1) award a bid for the purchase of seven
police staff vehicles to McPeek Dodge of Anaheim, CA; 2) award a bid for lease
financing to Rabo Bank I De Lage Landen Public Finance of Wayne, PA; 3) award a
bid for the equipment upfitting for the vehicles to Drive Customs of San Luis
Obispo, CA; and 4) adopt a resolution declaring the existing police staff vehicles
and trailer as surplus and authorizing their sale as outlined in this report.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
This expenditure is to be funded out of the approved Police Department FY 2015-
16 budget under debt service -leasing. The total amount over four years is
$234,347, which includes $218,903 for vehicle purchase and lease financing and
$15,444 for equipment upfitting. The annual lease payment of $54,725.75 will
come from the approved FY2015-16 budget of $133,880.
The upfitting costs will be offset by the sale of existing, and scheduled to be
surplus, vehicles. The value of the surplus vehicles is estimated at $40,000.
Therefore, a net revenue increase of $24,556 is anticipated. The lease is for four
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 new 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 time 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 surplus and sold to cover the equipment upfitting costs each time the
city enters into a new lease, with the overage resulting in a net revenue increase.
Item 8.g. - Page 1
CITY COUNCIL
CONSIDERATION TO AUTHORIZE AN AWARD OF BID FOR POLICE FLEET
LEASING PROGRAM INCLUDING VEHICLES, FINANCING AND UPFITTING, AND
DECLARING EXISTING VEHICLES AS SURPLUS PROPERTY
JULY 28, 2015
PAGE 2
ANALYSIS OF ISSUES:
The current police fleet operates (7) unmarked police staff vehicles. This includes
(6) unmarked sedans; and (1) unmarked four door pickup truck. The sedans are
assigned to detectives and command staff in the department and the multi-purpose
pickup truck is utilized as a pool vehicle that is capable of providing transportation
to training classes and events, such as firearms training, where the need to
transport ammunition and supplies necessitates a pickup truck.
This proposal calls for replacing these vehicles and maintaining the same number
of staff vehicles. After a review of needs and fleet maintenance practices, staff
recommends purchasing the Dodge Charger (V6 model) sedan and Dodge 1500
pickup truck based on cost and compatibility with maintenance parts currently used
on the patrol fleet of Charger (VB models).
The current staff vehicles are 2008 models and were originally scheduled to be
replaced in 2012. However, due to their low mileage and limited use at that time,
the decision was made retain the vehicles and instead purchase additional time on
the extended warranty until this year as a cost savings measure. The extended
warranty is scheduled to expire and the need exists to replace the vehicles while
they retain their residual value in order to continue to facilitate the fleet leasing
program.
In addition to the replacement of the (7) unmarked vehicles, the Police Department
will be reducing the overall fleet by (2) vehicles. Those additional surplus vehicles
are Unit #4610 / 1994 Ford Mustang (Traffic unit) and Unit #4623/1999 motorcycle
transport trailer that are no longer needed.
Staff recommends purchasing the vehicles from McPeek Dodge through
cooperative purchasing or "piggy backing" on existing contracts from larger
jurisdictions in order to achieve a cost benefit from the larger orders. The Chargers
will be based on the Los Angeles County Sheriff contract and the pickup truck will
be based on the Tulare County contract. Purchasing through such cooperative
agreements is consistent with the City's purchasing ordinance (reference AGMC
3.08.060(C)).
Item 8.g. - Page 2
CITY COUNCIL
CONSIDERATION TO AUTHORIZE AN AWARD OF BID FOR POLICE FLEET
LEASING PROGRAM INCLUDING VEHICLES, FINANCING AND UPFITTING, AND
DECLARING EXISTING VEHICLES AS SURPLUS PROPERTY
JULY 28, 2015
PAGE 3
Staff recommends financing the purchase through Rabo Bank I De Lage Landen
Public Finance of Wayne, PA, for the lease financing at a rate of 2.97%. Additional
bids were received by Leasing Specialists, LLC at a rate of 3.8% and Holman
Capital at 2.7% with a $6,000 document fee.
Staff further recommends a sole source agreement, as permitted by AGMC 3.08.060(B),
with Drive Customs for the vehicle upfitting due to the fact that there are no other
vendors in San Luis Obispo County or Northern Santa Barbara County that are both
a manufacturer representative and can manage a multi-vehicle fleet turn over in a
reasonable turn around time. The 2008 award of bid for upfitting went to a Los
Angeles area vendor based solely on cost. That decision proved problematic when
repairs and service issues arose and the vendor was nearly 200 miles away. Drive
Customs provides upfitting services to the vast majority of San Luis Obispo County
law enforcement agencies and their pricing is very competitive.
This request is to authorize the award of the following bid proposals:
Vehicles
• McPeek Dodge
Financing
$209,612.97 (LA and Tulare County Cooperative
Purchase)
• Rabo Bank/De Lage Landen $ 218,903.00 (2.97% I four annual payments)
Upfitting
• Drive Customs $ 15,444.00 (Offset by sale of existing vehicles)
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
seven police staff vehicles to McPeek Dodge of Anaheim, CA; 2) award a bid
for lease financing to Rabo Bank I De Lage Landen Public Finance of
Wayne, PA; 3) award a bid for the equipment upfitting for the vehicles to
Drive Customs of San Luis Obispo, CA; and 4) adopt a resolution declaring
the existing police vehicles as surplus and authorizing their sale as outlined
in this report.
Item 8.g. - Page 3
CITY COUNCIL
CONSIDERATION TO AUTHORIZE AN AWARD OF BID FOR POLICE FLEET
LEASING PROGRAM INCLUDING VEHICLES, FINANCING AND UPFITTING, AND
DECLARING EXISTING VEHICLES AS SURPLUS PROPERTY
JULY 28, 2015
PAGE4
Do not approve staff's recommendation.
Provide direction to staff.
ADVANTAGES:
This 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. Depending on the final sale value of the existing fleet, the proposed plan will
return approximately $24,566 to the General Fund.
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:
This project is exempt from CEQA pursuant to CEQA Guidelines Section 15061 (b)(3)
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, July 23, 2015. The agenda
and staff report was posted on the City's website on Friday, July 24, 2015. No public
input has been received to date.
Attachments:
1. Proposal based on the County of Los Angeles I PO#SH-15323947-1
2. Proposal for financing from Raoo Bank I De Lage Landen Public Finance
3. Proposal for upfitting from Drive Customs
Item 8.g. - Page 4
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
ARROYO GRANDE DECLARING VEHICLES AS SURPLUS
AND AUTHORIZING THEIR DISPOSAL
WHEREAS, the City of Arroyo Grande has certain vehicles which are no
longer needed; and
WHEREAS, the vehicles can be classified as surplus property and made
available for sale or transfer.
NOW, THEREFORE, BE IT RESOLVED that in conformance with the
City's Purchasing Policies and Procedures Manual, 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 or transfer.
On motion of Council Member , seconded by CounCil
Member and by the following role call vote, to wit:
AYES:
NOES:
ABSENT:
The foregoing Resolution was passed and adopted this 28th day of July
2015.
Item 8.g. - Page 5
RESOLUTION NO.
PAGE2
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 8.g. - Page 6
EXHIBIT A
SURPLUS VEHICL_ES AVAILABLE FOR 'SALE AND/OR AUCTION
VEHICLES:
1. 1994 Ford Mustang
(Unit #4610)
VIN #1FALP42T8RF153555
.2. 1999 Sh9p Motor9ycle Trailer
(Unit #4623) .
VIN #GA552407
3. 2008 Dodge Avenger
(Unit #4614)
VIN #1 B3LC46D6N515768
4. 2008 Dodge Avenger
(Unit #4615)
VIN# 1BLC46D89N515769
5. 2008' Dodge Avenger
(Unit #4616)
VIN# 1 B3LC46D49N515770
6. 2008 Dodge Avenger
(Unit #4617)
VIN# 1 B3LC46D4.9N515767
7-. '2'008 bodge Avenger
(U'nit #4618)
VIN # 183LC46D69N515771
8. 2008 Dodge Avenger
(Unit #4619)
VIN# 183LC46D89N515772
9. 2008 Podge Dakota Pickup
(Unit #4613)'
VIN# 1 Q7HE2"8K89S719705'
------~-·-------Item 8.g. - Page 7
I
ATIACHMENT 1 -l -
I
l
QUOTE
CITY OF ARROYO GRANDE;
2015I2016 DODGE CHARGER POLICE CAR
ADMINUNITS
BASED OF LA COUNTY Sl-IERIFF CONTRACT
RFB-IS-15201411-l I P.0# PO~SH-15323947-1
7-14-20 l 5
INCLUDES OPTIONS
27A DODGE CHARGER POLICE PKG
3.6 LITER V..:6
3.07 AXLE.
I-ID CLOTH BUCKET SEATS W/CLOTH REAR
FULL SIZE SPARE WI RELOCATION BRACKET
8 KEYS I REMOTES
KEY ALIKE (FREQ 1)
IO WAY POW.ER SEAT
STREET APPEARANCE GROUP
REAR BACK UP SENSORS AND CAMERA
SECURITY ALARM
COTE HOOKS
CAR TO BE SOLID COLOR
SELLING PRICE
LESS NET 30 PAY DISCOUNT
SELLING .PRICE
SALES TAX 8.0%
CA.TIRE TAX
5YR /85,000 MILE MAX CARE
TRANS.PORT TO ARROYO GRANDE
TOTAL FOREACH,CAR
25,484 .. 00
500.00-
24,984.00
I ,998.!72
I
8.75
2)80.00
300.00
29,671.47
12_21 Aut<.1 Center Dr. -P.O'. Sox 730 .-Anahei , CA '92815 -, 1
Pt~one: 1 (714) 635-2340 Fax 1 (714) 533-1553
__ , ____ , ________ , _______ _
Item 8.g. - Page 8
NOTES;
l NEW WARRANTY F0i{ THE 2015 I 2016 MOD'.ELS.
ARE
3YR/3.6,000 ON THE CAR
SYR/100,000 ON THE POWER TRAIN
2 -DE.LIVERY TIME IS 60-120 DAYS ARO
Mc_Peek's Dodge or Anaheim
1221 AUTO CENTER DR
ANAHEIM, CA 9280
714-254-2613 OFC
71'4-254-26'14 r AX
714-264-1867 ·CELL
KEVINB@MCPEE KD0DGE.COM
i 221 Auto Centej· Dr ... P.O. Box 730 -Anahekn, CA 928'i 5
Phone: 1 (7.14) 635-2340 Fax ·1 ('?'14) 53:;~~·t553
------Item 8.g. - Page 9
I
I
I
!
QUOTE
.A N A H E I M' CITY OF ARROYO GRANDE
2016 RAM CREW CAB SSV TRUCK
BASED ON TULARE·COUNTY CONTRACT
BID# 15-039 IP .0 # P0-32-15090I0010
INCLUDES OPTIONS
1500 SSV CREW CAB·
5. 7 LITER V-8
6 S-PEED AUTO TRANS
CLOTH FRONT BENCH /VINYL REAR SEA TS
CHROME APPEARANCE GROUP
BLUETOOTH
B.ACK UP CAMERA
LIMITED SLIP AXEL
32 GAL FUEL TANK
TRUCK TO BE SOLID COLOR
SELLING PRICE
SALES TAX 8.0%
CATIRE TAX
5YR I 85,000 MJLE JVIAX CARE
DELIVER TO ARROYO GRANDE
TOTAL FOR.EACH CAR
NOTES;
26,755:00
2, 140AO
8.75
2,380.00
300.00
31,584.15
1 NEW WARRANTY FOR THE 2016 MODELS ARE
3YR/36,000 ON THE CAR
SYR/100,000 ON THE POWER TRAIN
Me:Peek's badge of Analieim
1'221 S AUTO CENTER DR
ANAHEIM, CA 9280
714.-254-2613 0FC
714~-254-2614 FAX
7 Lfo2.tlfi-AS67 CEk,L . KE~~~PcP~"E1ZTJcRfGE.'C8Kt~oit 730 ·· /'.\nahe1m, CA ~28"15
Phc~ne: 1 (7"14} 635-2340 Fax 1 4) 533 .. ·1553
·----·-------------Item 8.g. - Page 10
RfJ_bpbank
ATTAp.HMENT 2
!
llabobanll IEquiprnentrmance
1111 Old-Eagle School Roatj
Wayne, PA 19087
Pr<»posa\l for T'ax:-:E.xempt Lease Purcl;la_~e .Financ:in~
Juiy 2},.20is
·City of Arroyo Grande
300 Ea:st Branch Street
Arroyo Grande, CA 93420
Rabobank .Equjpmcht Finaµce ("Lender") is pJeased to submit the. following proposal, fot discussion purposes
only, 'based bl). our prcst<ht un_derstanding of the financing requirenien~s of tli.e Borrower named below
.("~orr:gwer") for_ the-refinancing; of the below described equipment;{"Equipme!lt"). Any c~angps to these terms,,
-cqhditiolli; arid assumptions may alter the proposed fiiiancfo.g;
BORROWER: City of Arroyo Grande, California
LENDER_: Rabobarik Equipment Finance
EQUIPMENT: Vehicles
VENDOR: McPeek Dqdge, Anaheim, California
1~.!NAN{!iNO: TYPE: Tax-exem~t Capital .Lease-Purchase Agreement
AMO.uNT FINANCED: _$20.9,612.97 (faciudes sales taxes)
TERM: Four (4)_years
PAYMENT M:ob.E: Annual payments in ad\(ance
INTEREST-RATE: 2.97%*
PAYMENT FACTOR: 0.26108J)*
PA:YlV1ENT AMOUNT: $5~,7Z5.75*
NlfMBEROF PAYMENTS: Fow' (4)
CLOSJNG DATE; To be~detennined. ESti~nated to be October 21, 2015
*See. INTEREST RATE LOCK ana INTEREST RATE INOEX herein
Item 8.g. - Page 11
Rabob.ank
INTEREST RA TE LOCK:
FINANCING RATE INDEX:
SALES TAXES:
LEOAL OPINION:
TAX-EXEMPT' STATUS:
'FEES:
BANK QUALIFICATJON:
TITLE/SECURITY:
NET FINANCING:
OTHER CONDITIONS:
The fixed interest rate listed above is offered assuming the transactiQh is closed
prior to October 31, '2015. If closing1 is delayed beyond that date,. a new fixed
interest:rate shall be detennined pursuant to indexing provisions described below.
If funding of the transaction is delayed beyond .October 3 i:, 2015, the finan:cing
rate. ~sed to determine th_e payment amounts will be ·irtde~ed to the ~ec¢:ities·
ind_ustcy and Fin~cial Markets Association Index ("SIFMA Swap Ask Yield")
for the.;.ieJevant financing term. The final rate and resulting1paynients will be set
'ten (I 0) business days prior to closing,
Sales taxe~ are applicable to the Borrower's purchase of e9uip?1ent pursuant tQ
State law. All applicable sales taxes will be included in the financed amqupt.
.Lenci~r. will remit sales tax directly to the relevant tax collectjon agencies at
closing.
An opinion of Borrower's· legal counsel addressing the validity and enforceability
.of the financing agreement_, in a form acceptable to Lender, will be required find
the cost shall be the rcspOllSibility of the BorTOwer.
This proposal is based on the B_orrower's obligation under the underlying financ~
agrecnicnt qualifying as a tax-exempt obligation as .describ_ed in Section 103. of
th~ Internal Re_vem1e Code of 1986, as amended. Bonower shall ~c required to
use the Equipment in a manner, and do .those things requirep, so that the interest
portions of the·payments shall not become subject tO. Federal income taxation.
Bo1Tower is responsible for ·au 'fees and. expenses associated with .consultants or
advisors it may retain in conjunction with the proposed transactio_n. The
foregoing fees may be included in the amount financed, to, the extent permitted
b_y Federal tax law. Lender does not charge any documentation or closing,fees.
Lender offers the Borrower the same interest rate wtiether the obligation is "bank
qualified" or "non-bank qualified.''
Title to' :be held in the name of tJ1e Bonower, with Lender retaining a first
priority,. perfected ~ccurity interest in the Equipment.
Maintenance, insurance and taxes will be the responsibility of the Borrower.
11 Thts prop9sal is subject to credit approval.
• Interest rati::s notcd'.J.ierein arc subject to change as noted herei11.
• Financing is subject to verification that all c'osts an:; eligible for inclusion in a tax exempt financing.
• Jf state sales tax. is· appiicable to the sale bf the Equipment to the Borrower, su"Ch tax is e.xplicitly
NOT the respon~ibili_ty qf Lender. If state sales tax is applicable, Lencler is willing to include these
amo"unts in tl}e_afnol!nt financed .. Lender will require evidence that_ all requ,ired ,sales taxes are paid at
or prior to closing.
,____ _________ ------~-~~------Item 8.g. - Page 12
Rabobank
• Failure· h consummate this transaction once credit approval is ,granted and ·the· fm:,mcing documerifs
are delivered to Borrower.may result in a documentation fee being assessed·to fr\e Borrower.
• Either Lendyr 9r Bori:.ower-niay terminate discussions at any time in (ts sole discretion.
• If made, an approval by Lender would be in a separate writing and would be subject to legal and
bu5in-ess due,dil\gence and credit review, w}th results satisfacfory to_ Lender, in its sole discretion.
• Borrower acknowledges that th(< tenns of the financing (if approved) may change before the parties
execute final documentation~ ·
• No :financing terms wm b_e qinding on either party until definitive documentation is signed.
• This Lett~r ·is hot a statement of all terms and conditions of the :financjng, whi9h terms and c_onditions
would be.contained fully in final documentation and would,sJJpersede the terms of this Letter.
• This Letter is. intended for the use of the Borrower only, and no other party may rely upon or derive
any legal rights from this· Letter.
• This .Letter is: valid for 90 <ll:!YS fro!Il the date hereof and thereafter shall automatic~lly be deem}:d to
be null and v9i9,
NotWithstanding anytl1ing to the contrary, including, without.limit, acceptance by Bdrroiv,fJ!, lliis Letter is an indication of'
interest rf!garding·a possible arm :s /ength financing tr_ansaction on the general terms and conditiops outlin.e_d herein a_qd
s/10uld not. be construed as a commitment t~ fli:wnce. T!w proposal contained lierein consists solely of the terins' under
which Lender, may be willing to enter into a transactiOn with Borro_wer fo1: Lender's oivn account. Lender expresses no.
opinion and mak,es no repnJ__sentation with regard to what leasing or financing altematil'e is best suited.for Borrower.
Lender is not providing advice or rer;ommendations witl1 respect to the prdposed tran_s<jction {li_id has no fiduciary duty to
Borrower. Borrower is encouraged to_ re_ta/n its own advisor.
We sincerely appre~ii:ite'the oppo~Ul}ity to present this information.
Sipcerely,
RABOBANK EQUIPj\1ENT FINANCE
48-112175109+0.15
Item 8.g. - Page 13
.>).J_,,o S. U[;!u~tft. SI: Sui./-e -lf:z>t)o.
Stft.,f Las 05r:Spo, e.4. 8'o.r ,;41-44.J.J
NE!ine t Adoress
~rroyo Grande.PD
300 N Halcyon Rd.
Arroyo·Gr!ll}de, CA 93420
Project
Dodge Chargers
ltelT). Description
:-32?0.00·xx Viper S2 LED Dual.Head Light Bar
MPS600 Mic1'0Pulse.6 LED Light·He~d Flush Mount
MPSM6-l,B .J-.-~ra,cket'.for mounting MJ>GOO
ETSAlOOR .Remote IOOW Siren Controlle·r with Park Kill
ESlOOC Sirc!JIPA Spe_akcr 100 Watts
ES87TAR11 ES'I 00 Siren Bracket for 20 I 1 +Ford Taurus (Also lits. new. Chat'gers)
.72170-04 _4 P9~itic,:m Rotary.Switch
Parts Misc.-wite. wire ttcs. w1re loom, rel:i)•s. fuses. fuse holders, co11nect9rs
Labqr·Flcct Complete huiJd.ofunmarked Dodge Charger fo include all lighting, siren and
anip, police radio and antenna.
Subfota1·
Sales Tax
Total
I
ATIAGHMENT'3
i
'
Esfimate
Date Estimate#'
7/1512015 1863
Salesperson
Jesse
Qty Amount Total
6; 36Q.OO 2,,160._()QT
24 ' 130.0Q 3,120.00T
24 15.00 36o:oor
6 24'5.00 1,470.00T
6 235.00 1,410:00T
6 25.00 150.00T
6 35.00 210._()QT
6 7o.6o 420.00T
6 900.00 5,400.00
l
$14.700.00
'(8·.0%) $744.00
$15;444.00
Item 8.g. - Page 14