Title
Staff Report for a Resolution Authorizing the City Manager to Enter into the Second Phase of the Lease/Purchase Program for 15 Police Fleet Vehicles Contingent on City Council Approval and Adoption of the 2015-16 and 2016-17 Biennial Budget
Staffreport
SUMMARY AND RECOMMENDATION
Staff recommends that the City Council approve a resolution authorizing the second phase of the leasing of 15 police vehicles through a municipal lease program beginning in FY 2015-16. The resolution authorizes the City Manager to execute the lease purchase upon approval of the resolution contingent on City Council approval and adoption of the 2015-16 and 2016-17 biennial budget appropriation, with the first of three payments occurring in Fiscal Year 2015-16 of $246,500 per year (total $739,500).
BACKGROUND
On June 2, 2014, the San Leandro City Council adopted Resolution No. 2014-053 authorizing the City of San Leandro to enter into a lease/ purchase agreement with any lending company in an amount not to exceed the financing rate of 4.25% for the acquisition of 10 police vehicles. The City of San Leandro Finance Department was able to secure a loan at 2.1% with PNC bank.
This resolution was brought forward to the City Council as a result of the state of the Police Department's fleet. At the time Resolution No. 2014-053 was brought to the City Council, the San Leandro Police Department operated 67 vehicles throughout all of the Department's divisions. Every year, funds were allocated for the purchase of replacement vehicles based on a designated replacement cycle. In addition, the City purchased and stored additional replacement vehicles (between 4 to 7 vehicles), in the event a vehicle needed immediate replacement. Purchased vehicles were stored at the City Corporation Yard until brought into service. This method kept an inventory of vehicles in stock for several years after their purchase date, which caused new vehicles to sit dormant for 3 to 4 years before the...
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