As a way to modernize its fleet and do its part for the environment while saving a few bucks, the city of Sedona is looking into leasing city vehicles as opposed to buying them. 

The Sedona City Council on Tuesday, March 12, gave unanimous backing for city staff to pursue an agreement with Enterprise Fleet Management. The city currently owns and maintains a fleet of vehicles that are used by city departments to provide a variety of services to the community, a report states. 

The process for managing and maintaining the city’s fleet is highly decentralized. Each department is responsible for managing and maintaining their vehicles with no coordination to ensure the city is benefiting from the best pricing structure. In addition, approximately half of the city’s current light and medium fleet is over 10 years old, and many of the vehicles are approaching, or are well beyond, their useful lives. 

The report goes on to state that, to ensure the city maintains a safe, reliable service fleet while remaining fiscally prudent as new and replacement vehicles are purchased, staff has been working with Enterprise to determine the viability of the city entering into a vehicle leasing program. A centralized vehicle leasing program will help ensure that the city benefits from an efficient and cost-effective fleet management structure. 

Enterprise provides fleet management services to governmental organizations throughout Arizona, including the city of Cottonwood, the Town of Camp Verde and Pinal County. The report concluded by stating that establishing a vehicle lease program with Enterprise will provide a consistent preventative maintenance cycle and substantially reduce repair expenses and potential downtime. 

The specific advantages of using a vehicle leasing program include the following: 

• Maximizes cash flow opportunities by creating an ongoing level annual payment for fleet vehicles versus having to fund the entire cost of the vehicle up front. 
• Increases employee safety by enabling the city to replace outdated vehicles sooner rather than later, consistent with vehicle replacement best practices. 
• Reduces vehicle related costs with the ability to phase-in a more modern, fuel-efficient fleet expeditiously while reducing maintenance costs. 

Enterprise’s Tim Warren said the city currently has a fleet of 28 vehicles, which does not include the 39 vehicles assigned to the police department. 

“Older vehicles have higher fuel costs, maintenance costs, fewer safety features and tend to be unreliable,” Warren said. 

The plan would have the city starting with the fleet of 28 vehicles first and then evaluating the police vehicles later, Finance Director Cherie Wright said. Warren said the city can use an open-end lease as a funding mechanism, allowing the city to acquire additional vehicles while avoiding a large capital budget outlay. 

Maintenance and repairs can be handled in-house or performed by local businesses if desired. Furthermore, it establishes a proactive replacement plan that maximizes potential equity at time of resale, reduces operational expenses and increases safety. He said the city can back out of this program at any time and that over the next 10 years it could see a total net cash savings of

$225,000. Seven of the city’s oldest vehicles would replaced under this lease agreement for Fiscal Year 2020.