City Manager’s Office and Department of Finance
Reference: 2026 Fleet Purchase Proposal
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Catrina Asher, Director of Finance
Date Prepared: October 14, 2025
PURPOSE
To propose plans to lease and lease-purchase the City’s fleet and large equipment needs for 2026.
BACKGROUND
The City maintains a large fleet of vehicles and equipment. Plans are made to replace aging units each year and those costs are included in the City’s financial models and annual proposed budgets.
Police and White Fleet
In 2025, the City explored alternative options for managing the City’s police and white fleet (non-police cars, trucks, etc.). This included reviewing leasing models, and City staff decided to partner with Enterprise Fleet Management (EFM) for these services. EFM was hired through a cooperative agreement for the leasing of seven vehicles in 2025. Within this partnership, the City determines which vehicles to lease. EFM sources those vehicles to the City’s specifications and follow’s City’s Municipal Code regarding procurement and pricing. The vehicles are delivered and the City pays a monthly leasing fee for those units. The fee paid is calculated with the unit’s residual value in mind which lowers the monthly fee. When it’s time to replace the vehicle, EFM supports the City in the process, leveraging their large sales network. Any equity in the unit can be applied to the replacement unit which lowers the payments further.
Additional benefits to this partnership is that EFM’s network allows them to source and sell units faster than the City has been able to do historically. This means vehicles will be replaced on schedule and staff will have more current vehicles with up to date safety features, better mileage, and lower maintenance needs. Additionally, EFM’s sourcing streamlines our procurement and contracting processes, saving administrative time and effort for multiple departments.
The partnership has worked well for the City in 2025 and staff would like to continue this approach for the 2026 police and white fleet purchases. In 2025, the annual cost paid to EFM was within the City Manager’s authority. For 2026, the total cost paid to EFM will exceed that authority, so staff intends to request City Council’s approval of a not-to-exceed contract for fleet leasing services. The amount of the contract will be set to cover the cost of currently leased vehicles, additional vehicles planned for 2026, and additional room for unanticipated replacements (e.g. replacement of a damaged or totaled vehicle).
Snowplows
The City has a fleet of 8 snowplows used to maintain city streets. The majority of these plows were purchased in 2017 on a seven year lease-purchase arrangement (master lease agreement with purchase option). The 2017 lease-purchase agreement was paid in full in 2024.
The snowplow fleet is now aging and will need replacement in 2026. Due to the lead time needed to source a snowplow, staff began working on replacement planning in 2025 for delivery anticipated in spring 2026.
For 2026, staff recommends replacing all 8 snowplows through a lease-purchase arrangement similar to the one used in 2017. Staff have worked with our banking partners at Wells Fargo to secure preapproval for this lease-purchase arrangement. The total amount of the lease-purchase is estimated to be $4,200,000 and will be paid over an eight year period. The final amount will be determined when the units are ordered and the interest rate will be locked in when the units are delivered and the lease term begins in 2026. Annual lease payments are estimated to be $650,000 for the eight year period, and the new units are expected to have a useful life of ten years. Staff intends to request City Council’s approval of this lease-purchase arrangement for the acquisition of snowplows.
Once the new snowplows are received, staff intends to sell the aging plows and estimates proceeds will be $500,000.
CRITERIA BY WHICH COUNCIL MUST CONSIDER THE ITEM
Maintaining a municipal fleet requires periodic replacement of units which can be costly. Delaying replacement can result in higher maintenance costs and increased “downtime” of units which can impact staff’s ability to perform their responsibilities and to respond to weather events. Utilizing lease and lease-purchase agreements helps to spread the cost over many years and evens out the annual spend on large equipment. Additionally, the leasing model for police and white fleet will result in more regular replacement, better resale values, and newer, safer vehicles for staff.
FINANCIAL IMPACT
The annual cost of the City’s leasing arrangement with EFM for police and white fleet is estimated to be approximately $1,000,000 which includes contingency for unplanned replacements (e.g. damaged vehicles). The annual cost of the snowplow lease-purchase arrangement is estimated to be $650,000 for seven years.
The annual costs of both arrangements as well as the proceeds from sale of the aging snowplows are incorporated into the City’s multiyear financial models.
Attachments:
Ø Presentation