TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Brian Crawford, Municipal Services Director
PREPARED BY: Sarah Russell, Management Analyst
SUBJECT:
title
Purchase of Municipal Services Dump Trucks
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RECOMMENDATION
recommendation
Approve the purchase of two Ford F-750 dump trucks under the City's current agreement with Enterprise Fleet Management; and
Authorize the City Manager to execute the Enterprise Open-End (Equity) Lease Rate Quote No. 8781562.
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PRIOR ACTION/VOTE
On May 7, 2019, the City Council adopted Resolution 19-4080, approving 1) Execution of the Enterprise Fleet Management Agreement, and 2) Authorizing the City Manager to execute the Enterprise Agreement and all related documents on behalf of the City (Vote: 5-0).
CITY COUNCIL GOAL
Maintain a high performing organization that values fiscal sustainability, transparency, accountability and organizational efficiency.
DISCUSSION
The California Air Resources Board (CARB) Advanced Clean Fleet (ACF) Regulation, implemented in January 2024, is designed to accelerate the transition of truck fleets operating in California to zero-emission vehicles (ZEVs) to improve air quality and meet climate goals. For local governments, fifty percent (50%) of new vehicle purchases must be ZEVs starting in 2027, and one hundred percent (100%) of purchases by 2030.
The Municipal Services Department operates two (2) diesel-powered dump trucks, a 2003 and a 2007 Ford F-750, that require increased maintenance and the growing frequency of CARB-mandated emissions testing and reporting. The Department wants to replace these dump trucks with modern, gasoline-powered Ford F-750s. Gasoline-powered trucks have cleaner emissions, require less maintenance, are less expensive to operate, and follow a routine emissions testing schedule of once every two (2) years. Purchasing the trucks now will hedge against changing regulations impacting diesel trucks, allowing the City of Murrieta (City) to get ahead of the coming ACF regulation.
The City currently contracts with Enterprise Fleet Management (EFM) to procure and dispose of fleet vehicles. EFM can only lease vehicles to its customers since the company is not a car dealership, and there are multiple ways to structure leases. Generally, the City has structured leases to pay down the full capitalized cost of the vehicle, plus fees, over 60 months, with no residual amount owed at the end of the lease period. Paying the cost over time benefits agencies that cannot commit funds to large capital expenditures. In 2019, the City had a relatively old non-public safety fleet that needed to be replaced, so paying for the vehicles over 60 months made sense. However, starting this fiscal year, a fleet vehicle replacement fund has been established so that these capital expenditures can be planned and funded over several years.
The plan is to procure two (2) Ford F-750 truck chassis from EFM and structure the lease for 12 months. The City will pay the capital cost for each vehicle upfront, just holding back on one dollar ($1.00), paid at the end of the 12-month lease to keep the lease active. EFM will also charge a monthly lease fee, taxes, and a lease termination fee, totaling less than $1,500 for each vehicle. At the end of the year, the City will get title to the vehicles. Structuring a lease like this with EFM has significant advantages over the City purchasing these vehicles directly from a dealership, such as:
• The City does not pay interest fees on the vehicle capital costs.
• EFM has access to government pricing and incentives from vehicle manufacturers, and vehicles can be custom-ordered to fit the needs of the City.
• EFM staff configure vehicles, obtain equipment upfit quotes, and handle Department of Motor Vehicles (DMV) paperwork.
• EFM staff will transport vehicles from dealerships to equipment upfitters and finally to City offices for use.
• Lease fees include access to ancillary services, including a web-based fleet management software package that tracks maintenance, fuel purchases, etc.
The total upfront capital expense includes the cost of the Ford F-750 chassis; upfitting by Phenix Enterprises Upfitting to include the installation of a 10 foot, 5-7 yard dump body, and other ancillary accessories; and fees and taxes. EFM provided the quotes for the Ford F-750 chassis in September 2025. Receiving the trucks could take 3-6 months after the order is submitted. Staff recommends a contingency of $10,000 per vehicle to accommodate any significant changes in upfit costs or any last-minute price increases from Ford.
|
Item |
Unit Cost |
Total |
|
Ford F-750 Chassis |
$ 67,701.58 |
$ 135,403.16 |
|
Phenix Dump Truck Upfit |
$ 41,091.01 |
$ 82,182.02 |
|
Delivery |
$ 510.00 |
$ 1,020.00 |
|
Title, Tax, & License (TT&L) |
$ 11,237.20 |
$ 22,474.40 |
|
Subtotal |
$ 120,539.79 |
$ 241,079.58 |
|
|
|
|
|
12 Month Lease Fees |
$ 1,009.68 |
$ 2,019.36 |
|
Termination Fees |
$ 400.00 |
$ 800.00 |
|
|
|
|
|
Total |
$ 121,949.47 |
$ 243,898.94 |
FISCAL IMPACT
The monthly lease fees for Quote 8781562, which is $2,019.36 for 12 months, will be expensed from the following two accounts: 1116160-61920 and 1116160-61560. There is adequate funding for both units in the fiscal year (FY) 2025/26 operating budget. The upfront capital price expense plus the remaining fees for both units is $241,879.58. Funding is available in the FY 2025/26 operating budget account 7158200-71060.
If the final cost of the vehicles is higher than expected, staff requests a contingency amount of $10,000 per vehicle. This budget will only be implemented if the costs are higher than expected.
ATTACHMENTS
1. Enterprise Open End Lease Rate Quote 8781562
2. Phenix Dump Truck Upfit Quote TQ52573
3. Master Equity Lease Agreement