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Leavenworth reports costly enterprise leasing program, plans to buy out fleet over time
Summary
City staff said an enterprise vehicle-leasing program left Leavenworth facing high recurring lease payments; the city is downsizing and plans a phased purchase strategy to reduce annual costs to below $500,000 and ultimately own replacement vehicles outright.
Leavenworth staff told the commission the city’s multi-year vehicle enterprise lease program did not deliver the operating savings originally promised and left the city with higher-than-expected recurring costs.
Roberta (Finance Director) and public-works and department leaders described changes: staff returned seven vehicles, downsized 13 vehicles, and reordered new, smaller vehicles recommended by the lessor. Roberta said the city’s annual lease spend peaked near $750,000; after downsizing and other short-term changes, staff expect annual payments to fall below $500,000.
The city’s longer-term plan is to buy out leased vehicles as their net book value declines. Roberta explained the accounting: dealers capitalized vehicles and depreciated them under the lease arrangement; as net book value drops, the city intends to purchase eligible units “so at the end of the 5 years we’re gonna own all the vehicles,” she said. That reduces the city’s exposure to recurring lease costs and restores flexibility over vehicle choice and upfitting.
Police-specific impacts: Chief Pat Kitchens said the department has 24 patrol vehicles and two patrol cars need immediate replacement; two additional leased patrol cars are already ordered. Kitchens said getting back to a routine of buying four or five patrol cars per year will be complicated by ordering lead times and vehicle upfitting; cars ordered early in a year typically enter service in late fall of the next year.
Convention and Visitors Bureau vehicle: staff also told the commission they will purchase a replacement CVB minivan in 2025 using transient guest-tax reserves rather than leasing; staff said the current minivan (a 2015 model) has had recurring maintenance issues and that the actual 2025 purchase will return to the commission for final approval.
Why it matters: Lease structures tied up capital and produced larger-than-expected annual payments, staff said. The revised approach aims to reduce near-term annual spending and to convert the fleet to owned vehicles over a multi-year horizon, improving long-term flexibility and reducing future operating pressure.
Next steps: Staff will continue to order smaller replacement vehicles and present purchase requests as net book values decline. The police department will provide annual vehicle requests timed to manufacturer ordering windows to avoid excessive future replacement costs.
