The city of Sedona will soon be doing something a little different in the way staff gets around town.

The Sedona City Council approved a master equity lease agreement and related maintenance agreement with Enterprise Fleet Management subject to final review by the City Attorney Robert Pickels. The vote came during its Tuesday, April 9, meeting.

Sedona 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. Older vehicles generally have higher fuel and maintenance costs, fewer safety features and tend to be unreliable.

Lease cycles for most vehicles are typically 60 months. At the end of the lease cycle, the city will have the option to continue using the vehicle in the citywide fleet or can exchange the equity in the vehicle for a new replacement vehicle in a renewed lease — likely at a lower cost due to equity transfer.

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 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 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• Increases employee safety by enabling the city to replace outdated vehicles sooner rather than later, consistent with vehicle replacement best practices.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 more expeditiously while reducing maintenance costs.

Last month, 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 is the city would be starting with the fleet of 28 vehicles first and then evaluate the police cars later, Finance Director Cherie Wright said during a March 12 council meeting.

Warren said the city can utilize 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. And 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, the city 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.

Ron Eland can be reached at 282-7795, ext. 122 or by email at reland@larsonnewspapers.com