For City Council Meeting [November 15, 2022]
TO: Honorable Mayor and City Council
APPROVAL: Marcus Fuller, City Manager
FROM: Mark Kling, Police Chief
Timothy Sullivan, Maintenance and Facilities Director
Title
Request City Council to: (1) Approve an Increase of Funding in the Amount of $422,021.24 to the Lease-Financing Program Through Enterprise FM Trust for Previously Authorized Police Department Vehicles; (2) Authorize the Lease-Financing of Two Additional 2023 Ford Utility Interceptors in the Amount of $181,300.63; (3) Authorize Adjustment of Total Lease-Finance Amount to Account for Model Cancellations and Increased Pricing from the Manufacturer for Previously Approved Replacement Vehicles; and (4) Authorize the City Manager to Execute All Related Documents.
(ACTION)
Body
BACKGROUND
On October 26, 2021, the City Council approved the Lease-Financing program through Enterprise FM Trust. A total of 87 vehicles were ordered Citywide at the cost of $3,917,497; 29 vehicles have been received after extensive delays on manufacturing by Ford as they waited for availability of microchips and other parts.
The vehicle replacement program included 41 vehicles for the Rialto Police Department at a total cost of $1,789,302.56 based on 2022 model year pricing. The City has received and deployed 13 vehicles for the Rialto Police Department.
On October 3, 2022, City staff received notification that Ford Motor Company had canceled eight (8) 2022 F150 trucks that were ordered, six (6) F150 trucks were Responder models allocated to the Rialto Police Department, and the remaining two (2) were designated for general administration purposes.
On October 10, 2022, City staff received a second cancellation notice for the 11 Ford Police Utility Interceptors. All 19 new Police Department vehicles were categorized as “order received” by Ford Motor Company before the cancellation. The vehicle cancellations are a result of the international microchip shortage.
On October 18, 2022, a meeting was held with Enterprise Fleet Management staff at which time City staff were advised that a “hold order” was placed on our behalf for the 11 cancelled Ford Police Utility Interceptors, for 2023 model year vehicles. The hold order was taken due to the limited opportunity to place new orders for 2023 model year vehicles within Ford’s ordering window.
The limited opportunity to place new orders occurred prior to the November 15, 2022, City Council meeting, and has since closed with Ford no longer accepting any additional orders for vehicles.
In addition to the 11 cancelled Ford Police Utility Interceptors, and because of the limited ordering window, the City’s Enterprise Fleet Management representative also requested 2 additional Ford Police Utility Interceptors for a total of 13 patrol vehicles.
ANALYSIS/DISCUSSION
Staff is requesting an increase of funding to offset the cost increase for the 11 cancelled Ford Police Utility Interceptors. As the City Council’s prior authority was based on 2022 model year pricing, the cost for 2023 model year vehicles has increased. This also affects six authorized F150 Responder vehicles for the Police Department.
In response to the cancellation of the Ford F150 Interceptor units from Ford Motor Company, the Enterprise Fleet Management team was able to secure replacement vehicles by sourcing trucks throughout their vehicle supply network.
Given the limited ability to procure new vehicles for the Police Department, Staff recommends the City Council authorize an increase to the prior budget authority for replacement of the Police Department vehicles as shown in the Table below.
ENVIRONMENTAL IMPACT
Pursuant to Section 15378 of the California Environmental Quality Act, the proposed request is not a project. A ‘Project’ means the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment. A project does not include the creation of government funding mechanisms or other government fiscal activities that do not involve any commitment to any specific project, which may result in a potentially significant physical impact on the environment or Organizational, or administrative activities of governments that will not result in direct or indirect physical changes in the environment.
GENERAL PLAN CONSISTENCY
This action is consistent with Guiding Principle 3A in the General Plan:
Our City government will lead by example, and will operate in an open, transparent, and responsive manner that meets the needs of the citizens and is a good place to do business.
LEGAL REVIEW
The City Attorney has reviewed and supports this staff report and attached documents.
FINANCIAL IMPACT
Operating Budget Impact
The new vehicles will be under warranty and have an extended service contract during the lease term.
Capital Improvement Budget Impact
The 5-year lease financing will include the revised vehicle list and result in a total lease payment of $603,321.87 that will be annualized over 5 years and allocated to the Police Department in future operating budgets.
Any other replacement vehicle cancellations requiring re-ordering with newer model year vehicles at higher pricing will similarly be adjusted in the previously approved Lease-Financing Program, with annualized increased lease payments budgeted over the 5 year term.
Licensing
Before ordering the requested vehicles, the vendor shall submit a business license application and pay a Business License tax and Administration and State fees.
RECOMMENDATION
Staff recommends that the City Council:
(1) Approve an Increase of Funding in the Amount of $422,021.24 to the Lease-Financing Program Through Enterprise FM Trust for Previously Authorized Police Department Vehicles;
(2) Authorize the Lease-Financing of Two Additional 2023 Ford Utility Interceptors in the Amount of $181,300.63;
(3) Authorize Adjustment of Total Lease-Finance Amount to Account for Model Cancellations and Increased Pricing from the Manufacturer for Previously Approved Replacement Vehicles; and
(4) Authorize the City Manager to Execute All Related Documents.