Item Coversheet

Item Number: 14.



MEETING DATE:  1/24/2017

DEPARTMENT:
HEALTH AND HUMAN SERVICES AGENCY

DEPT HEAD/DIRECTOR: James A. Rydingsword

AGENDA ITEM PREPARER: Mike Hodges

SBC DEPT FILE NUMBER: 130

SUBJECT:

HEALTH AND HUMAN SERVICES AGENCY - J. RYDINGSWORD

Approve agreement for the leasing and servicing of a 2017 Chevrolet Silverado 1500 for the HHSA Public Health Department in an amount of $621.90 per month.  Authorize the chair to sign the Equity Lease Agreement.   Authorize the CAO to sign any additional paperwork necessary for the order and delivery of the 2017 Chevrolet Silverado 1500.

SBC FILE NUMBER: 130



AGENDA SECTION:

CONSENT AGENDA

BACKGROUND/SUMMARY:

HHSA Public Health Services is charged with promoting and protecting the health and well-being of our community, accomplished through activities such as child passenger safety events, local health fairs, school outreach, flu clinics, Public Health Nurse home visits and emergency preparedness and response.  The division currently has one vehicle, a 2007 Chevrolet Uplander Van which has travelled 86,000 miles. The vehicle requires frequent repairs, has limited equipment hauling capacity and is reaching the end of its reliable transportation capabilities.

 

On December 1, 2015 this Board of Supervisor approved the Master Equity Lease Agreement, Amendment to Lease Agreement, Self-Insurance Addendum, and Maintenance Agreement with Enterprise Fleet Management (Attachment B).  HHSA began this vehicle leasing verses purchasing process in 2015 based on the average departmental usage of vehicles and the maintenance cost per mile associated with the vehicles over a 10 year period.  A fleet of leased 5 year vehicles will have lower mechanical expenses and greater retained equitable value than a fleet of purchased vehicles over 10 years.  The financial investments in a leased fleet will allow HHSA Public Health greater cash flow to maintain all transportation needs of the division.  Although this is not the recommended approach for every department or all vehicles throughout the County, this program would meet the operational and maintenance needs of HHSA Public Health.

 

During the Fiscal Year 2016-2017 budget creation and approval process, HHSA Public Health Division budgeted for the addition of a leased vehicle to satisfy the department’s program needs for transportation of equipment and personnel.  The approved Public Health FY16-17 budget has allocated $7,200 in fixed assets for the lease of a vehicle.  The selected lease agreement will be $3,110.15 in the current fiscal year 16/17 and $7,464.36 annually for additional years.  The selected lease was designed for five years, but can be re-evaluated annually for termination with no penalties.

 

During the selection process, staff evaluated six vehicles and determined the 2017 Chevrolet Silverado 1500 best satisfied all departmental requirements for a vehicle.   Staff considered the following leasing options: Lease rates, variable cost if a full service lease, Length of lease, Net present value calculation of the lease payments over the equipment’s lifetime, and Residual responsibility “is it yours or does it belong to the lessor?”

 

As mentioned previously, leasing the entire County fleet is not recommended.  Given different types of vehicles, such as those found in Public Works, Probation, and the Sheriff’s Office, this leasing program does not suit those needs.  However, other programs and departments may yield different recommendations.  HHSA Public Health staff concluded that the proposed leasing option is the most effective use of financial resources in providing the required transportation needs of the department.

 



BUDGETED:

Yes

SBC BUDGET LINE ITEM NUMBER:

224.80.2390.1000.650.301 Fixed Assets

CURRENT FY COST:

$3,110.15

STAFF RECOMMENDATION:

It is respectfully recommended that the Board of Supervisor:
1. Approve a Equity Lease Agreement with Enterprise FM Trust for the leasing and servicing of a 2017 Chevrolet Silverado 1500 in the amount of $621.90 per month; and

2. Authorize the Chair to sign the agreements; and
3. Authorize the CAO to sign any additional paperwork necessary for the order and delivery and lease of the Chevrolet Silverado 1500.




ADDITIONAL PERSONNEL:
No


BOARD ACTION RESULTS:

Supervisor Anthony Botelho pulled for discussion.  Approved per staff recommendation. (3/2 vote), Supervisor Jaime De La Cruz and Anthony Botelho voted no)
ATTACHMENTS:
DescriptionUpload DateType
Master Lease Agreement12/22/2016Standard Contract
Equity Lease Rate Quote - 2017 Chevrolet Silverado1/11/2017Contract