Staff Report
PREPARED BY: MATT MORLEY
Director of Parks and Public Works
Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director
110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832
www.losgatosca.gov
TOWN OF LOS GATOS
COUNCIL AGENDA REPORT
MEETING DATE: 09/19/2017
ITEM NO: 7
DATE: SEPTEMBER 7, 2017
TO: MAYOR AND TOWN COUNCIL
FROM: LAUREL PREVETTI, TOWN MANAGER
SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE FOUR REPLACEMENT
HYBRID SPORT UTILITY VEHICLES (SUVs) FROM FREEWAY TOYOTA IN AN
AMOUNT NOT TO EXCEED $121,437
RECOMMENDATION:
Authorize the Town Manager to purchase four replacement hybrid Sport Utility Vehicles (SUVs)
from Freeway Toyota in an amount not to exceed $121,437 (Attachment 1).
BACKGROUND:
As part of the Fiscal Year 2017/18 Operating Budget, the Equipment Replacement Fund was
approved, providing funds for replacement of high mileage or older vehicles that have reached
their replacement criteria or do not meet federal regulations for emissions.
The Town Vehicle and Equipment Acquisition and Replacement Policy (Attachment 2)
determines which assets should be replaced by evaluating predetermined age and/or mileage
criteria.
Fleet vehicle replacement purchases are reviewed annually through the Operating Budget and
approved as part of the budget process. These vehicles were not included in the identified
replacement schedule for this fiscal year, thus necessitating the associated budget adjustment.
DISCUSSION:
Four 2007 Ford Explorers, which have been assigned to the Community Development
Department (CDD), were originally scheduled for replacement by 2015, per the Town’s vehicle
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SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE FOUR REPLACEMENT
HYBRID SPORT UTILITY VEHICLES
SEPTEMBER 7, 2017
S:\COUNCIL REPORTS\2017\09-19-17\Puchase four SUVs\Staff Report - SUV Final.docx 9/14/2017 11:06 AM SH
DISCUSSION (cont’d):
replacement schedule. These vehicles were previously evaluated by the Parks and Public Works
Department by reviewing the maintenance records and performing in-depth inspections for
each vehicle, resulting in an extension to the replacement cycle through 2023 based on low
mileage and overall condition. The transmission in one vehicle has recently failed, needing
replacement and as the vehicles meet the replacement criteria, staff is now recommending
replacement to avoid costly repairs and to maximize resale value. Replacement now will
ensure reliable vehicles so that staff can continue to meet the needs of the community.
Staff is recommending replacement of all four vehicles with Toyota compact SUV all-wheel
drive hybrid platforms taking into consideration several factors, including uses for the vehicle,
the vehicle’s fuel consumption, and overall costs. Hybrid vehicles have a proven track record in
reduced long-term operational costs based on fuel savings at an estimated 34 miles per gallon
(mpg) city and 30 mpg highway rating.
When Town vehicles are added to the inventory, dollars are set aside for each vehicle on an
annual basis in alignment with the replacement schedule to allow for the accumulation of
funds. These funds are later utilized to replace the vehicles and appropriated through the
budget process as needed. In the case of these vehicles, staff had anticipated additional years
of service and now recommends replacement. This requires the transfer of funding within the
Vehicle Replacement Fund to allow for the purchase.
The cost for the recommended replacement vehicles is $121,437 (Attachment 1). The
accumulated funds in the Town’s Vehicle Replacement fund for these vehicles totaled
$113,403, meaning that total cost as requested exceeds the accumulated funds by $8,034. The
excess costs can be attributed to increased vehicle costs through price escalation and because
the recommended replacement vehicles are hybrid vehicles, which are more expensive than
regular gasoline vehicles. The addition of hybrid vehicles to grow the Town’s green fleet and
the availability of dollars in the Vehicle Replacement Fund to make up the required funding,
drives the staff recommendation.
The replaced vehicles will be sold at auction with a combined value estimated at $13,000.
These auction funds typically return to the vehicle replacement fund to address shortfalls. Staff
recommends utilizing these funds to fully fund the replacement, with any remaining excess
returning to the vehicle replacement fund.
In accordance with the Town’s Purchasing Policy, Section 7c (Cooperative Purchasing), this
purchase is based on a formal bid process completed by the State of California Department of
General Services, which allows for other municipalities to purchase vehicles using their formal
bid proposal documents (see Attachment 3).
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SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE FOUR REPLACEMENT
HYBRID SPORT UTILITY VEHICLES
SEPTEMBER 7, 2017
S:\COUNCIL REPORTS\2017\09-19-17\Puchase four SUVs\Staff Report - SUV Final.docx 9/14/2017 11:06 AM SH
CONCLUSION:
Staff recommends that the Town Council authorize the Town Manager to purchase four
replacement hybrid Sport Utility Vehicles (SUVs) from Freeway Toyota in an amount not to
exceed $121,437 (Attachment 1).
ALTERNATIVE:
Alternatively, the Town Council could direct staff to delay replacement of the vehicles. Staff
does not recommend this alternative because the current vehicles have reached the end of
their useful life.
FISCAL IMPACT:
Due to anticipated proceeds from salvage value of the replaced assets, staff anticipates no fiscal
impact on the fund balance of the Town’s Equipment Replacement Fund, as an adequate
source of funding has been accumulated. The total estimated balance of the Equipment
Replacement Fund is over $1.7 million.
ENVIRONMENTAL ASSESSMENT:
This is not a project defined under CEQA, and no further action is required.
Attachments:
1. Purchase Proposal.
2. Town Vehicle and Equipment Acquisition and Replacement Policy.
3. State of CA Department of General Services award to Freeway Toyota.