Department of Finance
Reference: 2026 Fleet Lease Agreement Resolution
To: Mayor Gregory Mills and Members of City Council
Through: Michael P. Martinez, City Manager
Prepared By: Catrina Asher, Director of Finance
Date Prepared: December 16, 2025
PURPOSE
To propose a lease agreement amendment for the City’s 2026 fleet replacement needs Enterprise Fleet Management.
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.
This item was discussed with City Council at the Study Session on October 14, 2025.
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 is requesting 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 can be increased by the City Manager by up to 10% of the contract amount in the even there are unanticipated replacements (e.g. replacement of a damaged or totaled vehicle).
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 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 $658,231 which is the amount of the contract. Additionally, the City Manager can approve change orders up to 10% of the contract amount should there be a need for unforeseen replacements (e.g. totaled vehicles). This annual cost has been incorporated into the City’s multi-year financial models.
STAFF RECOMMENDATION
Staff recommends approving the resolution as presented, allowing staff to move forward with procurement of vehicles scheduled for replacement in 2026.
Attachments:
Ø Resolution
Ø Presentation