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City staff say enterprise vehicle-lease program costlier than expected; plan to buy out fleet over five years
Summary
City staff reported the enterprise leasing program has produced higher-than-anticipated lease payments and impaired fleet flexibility; staff outlined short-term downsizing, returning some leased units, and a longer-term plan to buy out leased vehicles as net book values decline.
City staff told the Leavenworth City Commission that the enterprise vehicle-lease program has not produced the expected savings and has increased long-term lease obligations, and recommended a two‑stage approach: short-term fleet reductions and downsizing, followed by purchasing vehicles as net book values fall.
The issue matters because vehicle leases have become a large recurring cost: staff described an earlier peak annual lease spend near $750,000 and said short-term changes reduced that planned expense to below $500,000; the long-term plan is to buy vehicles as lease depreciated values fall so the city eventually owns the fleet rather than continuing the lease cycle.
Brian (staff member) and other staff outlined operational steps taken after reviewing the program: returning seven vehicles, ordering smaller replacements for 13 vehicles (downsizing where possible), and reducing short-term projected annual lease outlays. Staff said the initial premise sold in 2021—short-term leases flipped annually to create cash flow—was disrupted by COVID and supply-chain issues, which extended leases and prevented the turnover that would have generated offsetting cash.
Staff described a plan to “buy our way out of this program” by purchasing vehicles when depreciation and net-book values make purchases affordable. The presentation included a two-track approach: (1) immediately reduce monthly spend through returns and downsizing; (2) over five years, buy vehicles as net book values decline, anticipating ownership at the end of that period.
Police fleet needs were discussed separately: the police department has ordered two replacement patrol cars to lease from Enterprise to meet immediate patrol needs, then plans to shift back to purchasing patrol vehicles and to return to a replacement cadence of roughly four or five cars per year. Police Chief Pat Kitchens said getting out of the enterprise program will be “more complicated than it was getting into it” and emphasized timing constraints for ordering cars (manufacturers’ narrow ordering windows and long lead times).
Staff also noted one out-of-cycle purchase: the Convention and Visitors Bureau (CVB) minivan will be purchased rather than leased because revenue surplus in transient guest tax funds permits a direct purchase now; staff said the trade‑in value is not yet known and the commission will see the purchase request.
Staff invited the commission to expect further review and detailed cash-flow schedules during the upcoming budget sessions.
