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HomeMy WebLinkAboutVehicle Replacement Lease Consideration PPTI WA3 M ,01 2L OVERVIEW • Challenges with replacement of the current fleet • To buy Model orto lease...the Enterprise Fleet Management • Next Steps • City Council questions 4LN*j 1 L CHALLENGES • Current fleet of 55 vehicles (PS and non -PS vehicles) • Aged fleet with most vehicles being 5years orolder; many are over so years old. • Funding constraints with replacing the fleet • FY 16/17 through FY 18/19, the General Fund was unable to make contributions into the Vehicle Replacement Fund due to budgetary constraints • Available cash in that fund was used to purchase vehicles • FY 19/20 the City was able to transfer $354,000 to resume contributions and fund additional approved purchases • FY 20/21 and FY 21/22 budgetary challenges due to COVID-19 have made it challenging to incorporate additional General Fund contributions nterprise '���_ � 7'z�'� .rev-�-. _- - _ _ - `y r,- ..,� ,.,� �` .3 � -.���� .�►s��` �_� - ,- M q CONFIDENTIAL AND PROPRIETARY - © 2016 Enterprise Fleet Management, Inc. • STRATEGIC ACQUISITION PLANNING • VEHICLE RESALE & TOTAL COST OF OWNERSHIP • ADMINISTRATIVE TIME REDUCTION • COST CONTROL, CONSOLIDATION, & DATA CAPUTRE FLEET MANAGEMENT EHI OVERVIEW 1.9MILLION WORLD WIDE VEHICLES 1,293,027 U.S. Fleet* Enterprise Hertz Avis Holdings Dollar/Thrifty Budget 9,600 WORLD WIDE LOCATION 61400 U.S. $20.9 BILLION IN REVENUE 97)000 EMPLOYEES Ranked by As one of America's Largest Private Companies Southern California: $360.7 Million Annual Economic Impact Enterprise Holdings, the world's largest car rental company as measured by revenue and fleet, is supporting Southern California through investments in jobs and partnerships with critical community resources, as well as involvement in local community organizations. In 2019, Enterprise Holdings' Southern California impact included some of the following key contributions: r$W Enterprise Holdings employs more than 5,000 employees at more than 375 locations in Southern California alone. pP 41 c'�UroRN�� AZUSA Ijjjj: t' X11 rrr BALDW [ N P - A • R • K THE [17Y OF P 13 PALM DESERT CALIFORNIA LEAGUE Of- caLIFay �A CITIES Sourcewellnki " The Enterprise Fleet Management lease program has not only alleviated some of the maintenance burden placed on our lean fleet maintenance staff and budget, it has also provided a level of flexibility that allows my team to promptly address the City's dynamic fleet needs without sacrificing service." — Lisa Fowler, Finance Director ACCIDENT/ RISK MANAGEMENT Fuel Programs LICENSE, TITLE AND REGISTRATION AFTERMARN CUS I UIVIILAI IUN TELEMATICS • • ACQUISITION •FINANCING/ CREDIT LINES ■ Y IL- ■ !] ■ • SAFETY FLEET MANAGEMENT •MAINTENANCE PROGRAMS VhHIGLt KhbALt FLEET MANAGEMENT $' Depreciation Optimal Time to Replace CI -I Maintenance • Maintenance costs in your current replacement window can be double the costs of vehicles in the optimal range • Fuel costs are 25% - 30% higher or more depending on vehicle type • Resale values are 70% - 80% lower at your typical replacement interval vs. optimal • Replacing vehicles at optimal time is cost neutral to current plan. F Ad 2020 F-150 L Government Pricing $26,124 MANHEIM AUCTION RESULTS $39,560"' Estimated Net Price ss F FORD'S WEBSITE Retail Pricing 2019 Ford F-150 XL Crew Cab 4x2 49403 $279800 -$17676 2018 Ford F-150 XL Crew Cab 4x2 199730 $2500 $524 2015 Ford F- 150 XL Crew Cab 4x2 447719 $21,300 $4,$24 2008 Ford F-150 XL Crew Cab 4x2 9$9521 $3,500 $22,624 City of Seal Beach - Fleet Planning Analysis Current Fleet 23 Fleet Growth 0.00% Proposed Fleet 23 Fleet Costs Analysis y Current Cycle 10.95 Annual Miles 4,600 Proposed Cycle 4.30 Current Maint. $138.91 0 '22 Proposed Maint. $27.01 Maint. Cents Per Mile $0.38 Current MPG 10 Price/Gallon $3.00 Total Current Main#. Spend $0.00 Leased MPG 12.5 Est. Fuel Miles 105800 (hide row) Average Annual Purchase 2.1 Calculate Maint Cents per mile $0.11 18 (hide row) fiscal Fleet Size Annual owned Leased Year Fleet Budget Net Cash Average 23 21" 23 0 '22 23 4 19 4 '23 23 8 11 12 '24 23 6 5 18 '25 23 1 5 18 '26 23 7 0 23 '27 23 5 0 23 '28 23 7 0 23 '29 23 9 0 23 '30 23 2 0 23 '31 23 3 0 23 Purchase Lease* Equity Equity Maintenance Fuel Fleet Budget Net Cash (Owned Leased) Incl, Tax 60,128 0 38,339 31,740 130,207 0 2,145 28,055 -24,838 32,968 30,636 68,967 61,240 2,145 66,082 -94,354 22,226 28,428 241527 105,680 0 103,304 -95,720 -9,121 14,169 26,772 39,405 90,802 0 103,304 0 -17,757 14,169 26,772 126,488 3,719 0 133,703 -94,035 -48,990 7,455 25,392 23,525 106,682 0 133,703 -57,551 7,455 25,392 108,999 21,208 0 133,703 -96,536 7,455 25,392 70,014 60,193 0 133,703 -10,223 7,455 25,392 156,327 -26,120 0 133,703 -39,424 7,455 25,392 127,126 3,081 0 133,703 -83,616 7,455 25,392 82,934 47,273 1 $473,757 ■ Fuel ■ Maintenance ■ Purchase $21,127 City of Seal Beach - Fleet Planning Analysis r Current Fleet 32 Fleet Growth 0.00% Proposed Fleet 32 Current Cie 6.46 Annual Miles 10,400 Proposed C ycle 4.53 Current Maint. $337.36 Proposed Maim. $89.33 ' Maint. Cents Per Mile $0.39 Current MPG U Price/Gallon $2.60 Fiscal Fleet Size Annual Owned Leased Purchase Equity Lease' Equity Maintenance Fuel Fleet Budget Net Cash Year NeedsOwned Leased _ Incl Tax .. Average 32 5.0 32 0 224,625 0 - 129,546 61,806 415,977 0 '22 32 7 25 7 40,781 79,759 A5,475 108,711 59,102 242,878 173,099 '23 32 12 13 19 57,093 204,713 -130,399 72,995 54,466 258,868 157,109 '24 32 6 7 25 0 249,061 -102,360 55,136 52,149 253,986 161,991 '25 32 3 4 28 0 277,215 -67,130 -34,009 46,207 50,990 273,272 142,705 '26 32 9 0 32 24,468 322,813 -54,030 -62,228 34,301 49,445 314,769 101,208 '27 32 9 0 32 0 322,813 -57,772 34,301 49,445 348,787 67,189 '28 32 5 0 32 0 322,813 -72,717 34,301 49,445 333,842 82,134 '29 32 6 0 32 0 322,813 -106,245 34,301 49,445 300,314 115,663 '30 32 11 0 32 0 322,813 -56,198 34,301 49,445 350.362 65,615 '31 32 8 0 32 0 322,813 -14,615 34,301 49,445 391,944 24,033 $1,090,745 Fleet Casts Analysis ■ Fuel ■ Maintenance ■ Purchase $70,927 VEHICLE DISPOSAL 700 DEDICATED REMARKETING EMPLOYEES SALES 'CHANNELS AUCTION 1 5% 150 REMARKETING LOTS IN NORTH AMERICA 19,000+ UNIQUE BUYERS DIRECT TO DEALER 85% nterprise COMMERCIAL SALES EXCEEDED AT AN AVERAGE OF 111.8% OVER BLACK BOOK (CVI). OPEN END LEASE BENEFITS • Optimize Cash Flow • Replace More Vehicles with Less Upfront Capital • NO Mileage Restrictions • NO Abnormal Wear & Tear Charges • NO Early Termination Penalties • All Rights of Ownership • Retain Equity in vehicles • Flexibility of Term based on each Vehicle's Application of Use and Mileage Patterns WRAP-UP • City is able to: • Replace its vehicles sooner • Achieve a lower total cost of ownership by maximizing discounts and resale value • Reduce maintenance costs thereby saving the General Fund money • Ensure the City's fleet, both public safety and non-public safety, is operating efficiently and effectively NEXT STEPS • Obtain feedback from City Council • Work with City Departments to finalize the initial vehicle request list • Bring back the final vehicle list and a master lease agreement for City Council consideration at a future City Council Meeting QUESTIONS