CC Resolution 13166 - Extend Existing Master Equity Lease Agreement with Enterprise Fleet Management RESOLUTION NO. 13166
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CAMPBELL AUTHORIZING: 1) AN
EXTENSION OF THE EXISTING MASTER EQUITY LEASE AGREEMENT WITH ENTERPRISE
FLEET MANAGEMENT; 2) THE ISSUANCE OF A PURCHASE ORDER WITH ENTERPRISE, IN
THE AMOUNT OF $193,000, FOR LEASING EXPENDITURES IN FY 2024/25, AS
PROGRAMMED IN THE PUBLIC WORKS —VEHICLE AND EQUIPMENT MAINTENANCE
OPERATING BUDGET; 3) THE ISSUANCE OF SUBSEQUENT PURCHASE ORDERS OVER
FOUR ADDITIONAL YEARS, IN THE TOTAL AMOUNT OF UP TO $928,000, FOR LEASING
COSTS TO BE INCURRED EACH YEAR DURING THE FIVE-YEAR PERIOD ; AND 4) THE CITY
MANAGER TO EXECUTE THE INDIVIDUAL LEASE AGREEMENTS FOR ADDITIONAL
VEHICLES REPLACED THROUGH ENTERPRISE AND AS SPECIFIED IN CAMPBELL
MUNICIPAL CODE SECTION 3.20.100
WHEREAS, the Public Works Department — Fleet Division maintains approximately 85 vehicles
utilized for various citywide operations; and
WHEREAS, significant price increases across the automotive industry have posed challenges for
the City's traditional procurement practice of purchasing fleet vehicles outright for its inventory
expansion and replacement needs; and
WHEREAS, in 2020, staff proposed to enter into a Master Equity Lease Agreement with Enterprise
Fleet Management Inc. (Enterprise) to facilitate access to newer fleet vehicles by way of various
leasing options; and
WHEREAS, each vehicle could be leased over a five-year (60-month) term and would accrue a
substantial residual value (equity) that would then be available for the City to use on current (or
future) vehicle purchases and/or leases upon their re-sale; and
WHEREAS, on November 17, 2020, the City Council adopted Resolution No. 12656, approving a
Master Equity Lease Agreement with Enterprise to replace the City's aging fleet vehicles over a five-
year period, in the amount of$57,930 for FY 2020/21, and a five-year total not to exceed $289,650;
and •
WHEREAS, as of May 2024, the City has issued monthly lease payments for 18 vehicles replaced
through the program's third year (FY 2023/24), which has exceeded the previous five-year total
($289,650) approved by the Council in 2020; and
WHEREAS, upon delivery of the five replacement vehicles, the City's annual leasing costs will
increase to approximately $193,000 for FY 2024/25, and to $300,000 in FY 2025/26; and
WHEREAS, a significant portion of these annual leasing costs will be offset by their reduced fueling
and maintenance expenses (approximately$70,000 annually) and the vacancy of the Fleet Mechanic
Supervisor position whose funds will remain programmed in the Operating Budget while the position
is re-evaluated; and
WHEREAS, after leasing expenditures peak in FY 2025/26, the following year, FY 2026/27, will mark
the beginning of the City's cost-recovery phase when approximately $120,000 in equity will be
received that year when the nine vehicles leased from FY 2021/22 are returned and re-sold by
Enterprise; and
WHEREAS, with more equity to be received over subsequent years, staff recommends applying
those funds to supplement the City's current leases and the acquisition of additional replacement
vehicles; and
WHEREAS, based on staff's proposed replacement schedule, and the equity to be applied over
future years, the City's annual leasing costs for the next five (5) years.are estimated as follows:
$193,000 (FY 2024/25), $300,000 (FY 2025/26), $150,000 (FY 2026/27), $120,000 (FY 2027/28),
and $165,000 (FY 2028/29); and
WHEREAS, staff recommends an extension of the existing Master Equity Lease Agreement with
Enterprise for the acquisition of additional replacement vehicles and to facilitate the City's application
of the equity to be received during that cost-recovery phase; and
WHEREAS, staff requests that the City Council also authorize the issuance of a purchase order, in
the amount of $193,000, for those costs incurred during FY 2024/25, and the subsequent issuance
of additional purchase orders over the next five years, for a total of up to $928,000; and
WHEREAS, sufficient funds in the amount of$193,000 will be available for those costs in FY 2024/25
upon the approval of the Proposed Operating Budget for FY 2024/25; and
WHEREAS, staff will also program the amounts needed for the four additional years into the City's
Operating Budget to ensure sufficient funds are available for the City's annual leasing costs and
related expenditures.
NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of Campbell hereby
authorize: 1) an extension of, the existing Master Equity Lease Agreement with Enterprise Fleet
Management for the replacement of City vehicles; 2) the issuance of a purchase order with
Enterprise, in the amount of$193,000, for all leasing expenditures incurred through FY 2024/25, and
as programmed in the Public Works—Vehicle and Equipment Maintenance Operating Budget for FY
2024/2025; 3) the issuance of subsequent purchase orders over four additional years, in the total
amount of up to $928,000, for leasing costs to be incurred each year during that five-year period;
and 4) the City Manager to execute the individual lease agreements for additional vehicles replaced
through Enterprise and as specified in Campbell Municipal Code Section 3.20.100.
PASSED AND ADOPTED this 4th day of June, 2024, by the following roll call vote:
AYES: Councilmembers: Bybee, Furtado, Scozzola, Lopez, Landry
NOES: Councilmembers: None
ABSENT: Councilmembers: None
APPROVED:
riVA/n
Susan M. Landry, ayor
ATTEST:
C ite 1I' f
Andrea Sand , City Clerk
:110. 41
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•
AMENDMENT TO MASTER EQUITY LEASE AGREEMENT
THIS AMENDMENT("Amendment")dated this day of. , 2024 is attached to, and made a
part of, the MASTER EQUITY LEASE AGREEMENT entered into on the 25th day of November 2020
("Agreement") by and between Enterprise FM Trust, a Delaware statutory trust ("Lessor") and City of
Campbell ("Lessee"). This Amendment is made for good and valuable consideration, the receipt of which
is hereby acknowledged by the parties.
Section 9(c)of the Master Equity Lease Agreement is amended to read as follows:
Except in the event of the negligence or willful misconduct of Servicer or any other agent of Lessor, none of Lessor,
Servicer or any other agent of Lessor will be liable to Lessee for any liability, claim, loss, damage(direct, incidental or
consequential) or expense of any kind or nature, caused directly or indirectly, by any Vehicle or any inadequacy of
any Vehicle for any purpose or any defect(latent or patent) in any Vehicle or the use or maintenance of any Vehicle
or any repair, servicing or adjustment of or to any Vehicle, or any delay in providing or failure to provide any Vehicle,
or any interruption or loss of service or use of any Vehicle, or any loss of business or any damage whatsoever and
however caused. In addition, none of Lesor, Servicer or any other agent of Lessor will have any liability to Lessee
under this Agreement or under any order authorization form executed by Lessee if Lessor is unable to locate or
purchase a Vehicle ordered by Lessee or for any delay in delivery of any Vehicle ordered by Lessee.
Section 10 of the Master Equity Lease Agreement is amended to read as follows:
Lessee assumes and agrees to bear the entire risk of loss of, theft of, damage to or destruction of any Vehicle from
any cause whatsoever ("Casualty Occurrence"), except for such loss, damage or destruction caused by the
negligence or intentional misconduct of Servicer or any other agent of Lessor. In the event of a Casualty Occurrence
to a Vehicle, Lessee shall give Lessor prompt notice of the Casualty Occurrence and thereafter will place the
applicable Vehicle in good repair, condition and working order; provided, however, that if the applicable Vehicle is
determined by Lessor to be lost, stolen, destroyed or damaged beyond repair(a"Totaled Vehicle"), Lessee agrees to
pay Lessor no later than the date thirty(30)days after the date of the Casualty Occurrence the amounts owed under
Sections 3(b) and 3(c)with respect to such Totaled Vehicle. Upon such payment, this Agreement will terminate with
respect to such Totaled Vehicle.
•
Section 12 of the Master Equity Lease Agreement is amended to read as follows:
Except in the event of the negligence or willful misconduct of Servicer or any other agent of Lessor, to the extent
permitted by state law, Lessee agrees to defend and indemnify Lessor, Servicer, any other agent of Lessor and their
• respective successors and assigns from and against any and all losses, damages, liabilities, suits, claims, demands,
costs and expenses (including, without limitation, reasonable attorneys' fees and expenses) which Lessor, Servicer,
any other agent of Lessor or any of their respective successors or assigns may incur by reason of Lessee's breach or
violation of, or failure to observe or perform, any term, provision or covenant of this Agreement, or as a result of any
loss, damage, theft or destruction of any Vehicle or related to or arising out of or in connection with the use, operation
or condition of any Vehicle. The provisions of this Section 12 shall survive any expiration or termination of this
Agreement. Nothing herein shall be deemed to affect the rights, privileges, and immunities of Lessee and the
foregoing indemnity provision is not intended to be a waiver of any sovereign immunity afforded to Lessee pursuant
to the law.
Section 14, second paragraph of the Master Equity Lease Agreement is amended to read as follows:
Upon the occurrence of any Event of Default, Lessor, with written notice to Lessee, will have the right to exercise
concurrently or separately (and without any election of remedies being deemed made), the following remedies: (a)
Lessor may demand and receive immediate possession of any or all of the Vehicles from Lessee, without releasing
Lessee from its obligations under this Agreement; if Lessee fails to surrender possession of the Vehicles to Lessor on
default (or termination or expiration of the Term), Lessor, Servicer, any other agent of Lessor and any of Lessor's
independent contractors shall have the right to enter upon any premises where the Vehicles may be located and to
remove and repossess the Vehicles; (b) Lessor may enforce performance by Lessee of its obligations under this
Agreement; (c) Lessor may recover damages and expenses sustained by Lessor, Servicer, any other agent of Lessor
or any of their respective successors or assigns by reason of Lessee's default including, to the extent permitted by
applicable law, all costs and expenses, including court costs and reasonable attorneys' fees and expenses, incurred
by Lessor, Servicer, any other agent of Lessor or any of their respective successors or assigns in attempting or
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FLEET MANAGEMENT
effecting enforcement of Lessor's rights under this Agreement (whether or not litigation is commenced) and/or in
connection with bankruptcy or insolvency proceedings; (d) upon written notice to Lessee, Lessor may terminate
Lessee's rights under this Agreement; (e)with respect to each Vehicle, Lessor may recover from Lessee all amounts
owed by Lessee under Sections 3(b) and 3(c) of this Agreement (and, if Lessor does not recover possession of a
Vehicle, (i) the estimated wholesale value of such Vehicle for purposes of Section 3(c) shall be deemed to be$0.00
and (ii) the calculations described in the first two sentences of Section 3(c) shall be made without giving effect to
clause (ii) in each such sentence); and/or(f) Lessor may exercise any other right or remedy which may be available
to Lessor under the Uniform Commercial Code, any other applicable law or in equity.A termination of this Agreement
shall occur only upon written notice by Lessor to Lessee. Any termination shall not affect Lessee's obligation to pay
all amounts due for periods prior to the effective date of such termination or Lessee's obligation to pay any
indemnities under this Agreement. All remedies of Lessor under this Agreement or at law or in equity are cumulative.
Section 15, first paragraph of the Master Equity Lease Agreement is amended to read as follows:
Lessor may from time to time assign, pledge or transfer this Agreement and/or any or all of its rights and obligations
under this Agreement to any person or entity. Lessor will provide written notification in the event of a non-financial
assignment. Lessee agrees, upon notice of any such assignment, pledge or transfer of any amounts due or to
become due to Lessor under this Agreement to pay all such amounts to such assignee, pledgee or transferee. Any
such assignee, pledgee or transferee of any rights or obligations of Lessor under this Agreement will have all of the
rights and obligations that have been assigned to it. Lessee's rights and interest in and to the Vehicles are and will
continue at all times to be subject and subordinate in all respects to any assignment, pledge or transfer now or
hereafter executed by Lessor with or in favor of any such assignee, pledgee or transferee, provided that Lessee shall
have the right of quiet enjoyment of the Vehicles so long as no Event of Default under this Agreement has occurred
and is continuing. Lessee acknowledges and agrees that the rights of any assignee, pledgee or transferee in and to
any amounts payable by the Lessee under any provisions of this Agreement shall be absolute and unconditional and.
shall not be subject to any abatement whatsoever, or to any defense, setoff, counterclaim or recoupment whatsoever,
whether by reason of any damage to or loss or destruction of any Vehicle or by reason of any defect in or failure of
title of the Lessor or interruption from whatsoever cause in the use, operation or possession of any Vehicle, or by
reason of any indebtedness or liability howsoever and whenever arising of the Lessor or any of its affiliates to the
Lessee or to any other person or entity, or for any other reason.
Section 17 of the Master Equity Lease Agreement is amended to read as follows:
Subject to the provisions of Section 15,this Agreement will be binding upon Lessee and its heirs, executors, personal
representatives, successors and assigns, and will inure to the benefit of Lessor, Servicer, any other agent of Lessor
and their respective successors and assigns. This Agreement will be governed by and construed in accordance with
the substantive laws of the State of California(determined without reference to conflict of law principles).
All references in the Agreement and in the various Schedules and addenda to the Agreement and any other
references of similar import shall henceforth mean the Agreement as amended by this Amendment. Except to the
extent specifically amended by this Amendment, all of the terms, provisions, conditions, covenants, representations
and warranties contained in the Agreement shall be and remain in full force and effect and the same are hereby
ratified and confirmed.
IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment to Mastei- Equity Lease
Agreement as of the day and year first above written.
City of Campbell (Lessee) Enterprise FM Trust(Lessor)
By:Enterprise Fleet Management,Inc.,its attorney in fact
By By
Title: .Title:
•
Date Signed: Date Signed:
•
Replacement Vehicles Currently Under Lease with Enterprise(Years 1—4)
Year Est.Purchase Value Fiscal Year Months Left
(in current # Vehicle on Lease Est.Trade In(Equity)Value at End of Lease
Lease Cycle) (if purchased outright at time of lease) Lease Start (as of May 2024)
•
1 2021 Toyota Prius LE H/Back $28,000 21/22 24 $11,200.00
2 2021 Toyota Prius LE H/Back $28,000 21/22 24 $11,200,00
3 2021 Ford Ranger Supercab $27,000 21/22 24 $10,800.00
4 2021 Ford Ranger Supercab $27,000 21/22 25 $10,800,00
5 2021 Ford F-250 Supercab $45,000 21/22 25 $18,000.00
6 2021 Nissan Altima 4DR $28,000 21/22 25 $11,200,00
7 2021 Toyota Highlander $50,000 21/22 25 $12,500.00
8 2021 Ford F-250 Supercab $45,000 21/22 26 $18,000,00
9 2021 Chevy Colorado 4X4 $41,000 21/22 28 $16,400.00
10 2022 Ford Escape Se Hybrid $38,000 22/23 34 $15,200,00
11 2022 Subaru Ascent $55,000 22/23 39 $22,000,00
12 2022 Dodge Durango Pursuit $58,000 22/23 41 $23,000,00
2 13 2022 Ford Explorer $64,000 22/23 43 $25,600,00
14 2022 Ford Ranger XL Supercab $33;000 22/23 45 $13,200.00
15 2022 Ford Ranger XL Supercab $33,000 22/23 45 $13,200.00
16 2022 Ram 1500 Supercab $55,000 22/23 46 $22,000.00
3 17 2024 Ford F-250 Utility Bed $68,000 23/24 57 $27,200.00
18 2023 Chevy Tahoe $87,000 23/24 59 $34,800.00
19 2024 Ford F-350 Extended Cab $63,000 24/25 60 $25,200,00
4 20 2024 Ford F-350 Extended Cab $63,000 24/25 60 $25,200,00
)vehiciss 1.b.received 21 2024 Ford F-250 Utility Bed $68,000 24/25 60 $27,200.00
JunelJuly 2024)
22 2024 Honda Odessey $45,000 24/25 60 $18,000.00
23 2024 Ford F-350 Utility Bed $63,000 24/25 60 $25,200,00