AGENDA CAPTION:
Title
Consider approval of Resolution 2025-209R, approving a Change in Service with Enterprise Fleet Management, Inc., through the Texas Interlocal Purchasing System Cooperative, for the lease and maintenance of 25 vehicles and miscellaneous equipment in the amount of $347,248.00; authorizing the City Manager, or her designee, to execute the Change in Service on behalf of the city; and declaring an effective date.
Body
Meeting date: November 5, 2025
Department: Public Works - Fleet Services
Amount & Source of Funding
Funds Required: $347,248.00
Account Number: 10001280.52111 (Vehicle/Equipment Lease Payment); 21006322.5211; 22006335.52111
Funds Available: Yes
Account Name: Vehicle/Equipment Finance Payments, City Fleet Leasing
Fiscal Note:
Prior Council Action: The City first entered into a contract for leased vehicles with Enterprise Fleet Management in 2014.
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Background Information:
With over 519 Light vehicles in all departments, the city has previously faced budgetary challenges replacing vehicles according to the adopted replacement schedules. In 2014, the City executed a Fleet Management contract, “Master Equity Lease Agreement”, with Enterprise Fleet Management, Inc., through the Interlocal Purchasing System, TIPS, for the leasing of Police Department detective and undercover vehicles. After the successful leasing of the PD vehicles, Enterprise developed a citywide fleet management program to save the city money and provide predictable cost schedules. The city currently leases 343 of the City’s 519 light vehicle fleet.
Through the Fleet Management program with Enterprise, Enterprise purchases light duty and pursuit rated vehicles directly bought from the manufacturer or preferred dealers at government pricing or better with all applicable rebates applied. Enterprise applies a leasing factor to the purchase price and annual lease payments are set for the City. The City then buys aftermarket equipment, which is included in the recurring annual lease amount and is also included in the contracted amount with Enterprise. Vehicles are replaced on an approximate five-year schedule. At the conclusion of the lease or sooner, the vehicles are either sold by Enterprise on the open market and the equity is rolled into the next five-year lease or sold to other municipalities with the revenue from the sale deposited into the city and a new five-year lease entered into with Enterprise. All maintenance (excluding pursuit-rated patrol vehicles) is included in the annual lease payment with the exception of tires and Enterprise Fleet Management contracts with local vendors for these services. By moving the routine maintenance out of the city shop, mechanics are able to work on larger equipment repairs that are routinely outsourced. Bringing these repairs in-house has minimized repair costs and created efficiencies in the City’s fleet operations.
A comprehensive study report of the Enterprise Lease program was conducted by a third-party consultant with final report issued in November 2020. A few points made in the report worth noting:
• Enterprise can purchase vehicles at a significantly lower price; therefore, when comparing leasing a vehicle to the city purchasing the vehicle it is estimated there would be a cost savings.
• If purchased, instead of leasing vehicles, it is anticipated that additional personnel would be needed as the recommendation is one Technician for each 100 vehicles
• City does not have capacity at the garage facility to service all vehicles.
• While payments would be eliminated after five years with purchased vehicles, increased maintenance expenses would need to be considered.
This Change in Service to the Master Equity Lease Agreement is brought to City Council each year for the approval of the annual vehicle allocation and contract increases. For FY24, the City will lease twenty-five (25) vehicles for San Marcos Police, Fire, Utilities, Public Works Admin, Parks & Recreation, Permitting, Code Compliance from Enterprise Fleet Management, Inc. The first-year lease price is $347,248.00 which includes the annual lease price of $213,904.00 and the equipment “upfitting” cost of $133,344.00. After the first year, the annual lease price will be $213,904.00 for each additional year for four (4) years. Total cost for the five (5) year lease period for these 25 vehicles is $1,202,864.00. If this change of service is approved, the FY 2026 total Master Equity Lease Agreement amount for 368 vehicles is $3,483,377.
The 25 vehicles are to be distributed as follows:
• Police Dept., 11 vehicles
• Fire Dept.,3 vehicles
• Public Works Dept., 1 vehicle
• City Marshals., 2 vehicles
• Code Compliance., 1 vehicle
• Parks and Rec., 1 vehicle
• Stormwater., 1 vehicle
• Water Distribution., 2 vehicles
• Water Quality., 2 vehicles
• Permits., 1 vehicle
Council Committee, Board/Commission Action:
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Alternatives:
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Recommendation:
Staff recommends approval.