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Council approves Enterprise fleet-management agreement to accelerate vehicle replacement and reduce fleet costs
Summary
The council voted 6-0 to approve a master equity lease and fleet-management agreement with Enterprise Fleet Management after staff and an Enterprise account executive outlined a plan to replace a backlog of aging vehicles over a five-year cycle and reclaim resale equity to fund future replacements.
The Sunnyvale Town Council voted 6-0 on Aug. 25 to approve a master equity lease, maintenance and fleet management agreement with Enterprise Fleet Management intended to accelerate replacement of the town's aging fleet and reduce long-term operating and capital costs.
Jennifer, an Enterprise account executive, presented the company's proposal and analysis. Enterprise based its recommendation on an inventory of Sunnyvale's approximately 41 light-duty fleet vehicles, which the firm said have averaged an 8.5-year replacement cycle. Enterprise proposed a five-year sustainable replacement plan that would replace a larger number of the oldest, highest-cost vehicles in the first year to reduce maintenance and fuel expense and capture resale equity to fund future replacements.
Jennifer told council that under the plan the town would replace 19 units in the first year and use a market-value finance (an open-end lease) to spread payments while preserving resale equity. That resale, Enterprise said, is the biggest driver of total cost-of-ownership savings; the company described its remarketing program that it said often achieves higher resale value than auction trade-in markets. Enterprise also described maintenance-management services and telematics reporting to monitor and limit operating costs.
Chief Vegas and other staff told council they support the program as a way to modernize vehicles that have become maintenance burdens and to reduce administrative workload. Council asked questions about vehicle specifications, aftermarket costs (decals, emergency equipment), and the city's ability to incorporate electric vehicles in the future; Enterprise said it can work with the town on electrification trials and build specifications to local needs.
After discussion the council approved the agreement. The motion to approve passed 6-0. Staff will work with Enterprise to finalize the replacement schedule, order vehicles and implement maintenance and remarketing procedures.
The council did not appropriate a specific capital amount during the meeting beyond authorizing the contract; staff and Enterprise will return with implementation steps, purchase timing and the anticipated cash-flow and equity schedule described at the presentation.
