HomeMy WebLinkAbout11/18/2003, C2 - FLEET MANAGEMENT POLICY REVISIONS \� I
council M..ti °D 11 ,g a
j Agenda Report ®N , e
C ITY O F SAN LU IS OBISPO
FROM: Michael D. McCluskey, Public Works Directorr\-
Prepared By: David Elliott,Administrative Services Manager
SUBJECT: FLEET MANAGEMENT POLICY REVISIONS
CAO RECOMMENDATION
Adopt a resolution amending Financial Management Manual Section 405 regarding fleet
management
DISCUSSION
On April 4, 2000 the Council adopted Resolution No. 9036, which substantially updated Financial
Management Manual Section 405 regarding fleet management. Since then five approved
exceptions to fleet management policies have become standard practice:
1. Typically buying new vs. used vehicles and equipment
2. Using a broker when buying used vehicles
3. Using only mileage targets for replacement of patrol units
4. Reducing the age target for buses from 15 years to 12 years
5. Specifying red base paint for fire emergency response units
These five significant changes should now be codified to ensure conformity between policy and
practice. In addition, several minor changes should be made for clarity and readability.
Typically Buying New vs. Used Vehicles and Equipment. Existing policy, in place since 1990,
states that "when buying general-purpose vehicles (sedans, station wagons, minivans, sport utility
vehicles, and pickup trucks with less than one ton payload), the preferred procedure will be to buy
used vehicles." This policy was founded on the conventional wisdom that because most of a
vehicle's price depreciation occurs in the first year or two of its service life, buying a late model
used vehicle makes more economic sense than buying a new vehicle. In general that approach
might work for most buyers, but it did not work for the City. Why not? First, the sources the City
could trust for used vehicles dealt in rental vehicles and vehicles coming off of leases. Typically
these vehicles were loaded with options neither needed nor desired by the City. Consequently,
prices tended to be higher (sometimes much higher) than prices for new vehicles more modestly
equipped. Also, because it was difficult to write specifications around used vehicles, it was nearly
impossible to inject meaningful competition into the procurement process.
Beginning in 2001, the City began replacing most vehicles and equipment items through
cooperative procurements, either using State of California Multiple Award Schedule (CMAS)
contracts or "piggybacking" onto contracts from other public agencies. With cooperative
procurements a public agency secures competitively bid prices and makes them available to other
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Council Agenda Report—Fleet Management Policy Revisions
Page 2
agencies. This process has had two benefits: 1) the City has paid much less for its vehicles and 2)
the procurement process has been significantly streamlined. For these reasons, the fleet
management policy should in general favor buying new vehicles. The only exception is police
administrative sedans, which need to have higher trim levels so that they can be used when needed
for undercover work.
Using a Broker when Buying Used Vehicles. (This policy revision will apply most often to
procurements of police administrative sedans.) Although existing policy is to buy used vehicles
through dealers who sell used rental vehicles for major rental companies, in the past there were
two disadvantages with this procedure: 1) prices tended to be at the high end of the retail range,
above what is commonly referred to as "high blue book" value and 2) long-term reliability was
dubious because of the effects of multiple drivers and hard rental service.
To avoid these problems and, particularly, to find vehicles in excellent overall condition with
relatively low mileage and reasonable prices, starting in 2002 the City began using local auto
brokers to find suitable vehicles at auction. This approach avoids high dealer markups and
allows purchases of vehicles from leased corporate fleets. Such vehicles are usually in better
shape than rental vehicles because they have typically had only one driver and have been subject
to strict lease conditions regarding condition and mileage at the end of the lease. Consequently,
the fleet management policy should specify that brokers, rather than dealers, be used when
buying used vehicles.
Using Only Mileage Targets for Replacement of Patrol Units. Existing policy states that police
patrol vehicles should be replaced at 3 years or 100,000 miles and that police patrol motorcycles
should be replaced at 3 years or 25,000 miles. This policy evolved into the practice of replacing one
third of the patrol fleet each year in order to stabilize average fleet age and minimize large year-to-
year variations in maintenance cost. Under this policy, patrol sedans were being replaced after
accumulating on average a little over 80,000 miles. While this approach was successful and
appropriate for the first three procurement cycles, by the fourth cycle the patrol sedans were not
accumulating enough mileage to warrant replacing one third of the fleet each year.
During preparation of the 2003-05 Financial Plan, Police and Public Works came up with a more
workable procedure: replace patrol sedans in the first fiscal year after they reach 80,000 miles,
regardless of age, and replace patrol motorcycles in the first fiscal year after they reach 25,000
miles, regardless of age. Projections based on current usage show that with this procedure patrol
sedans will end up with an average of 89,100 miles accumulated, while patrol motorcycles will
average 27,200 miles. This change will typically extend the replacement time from three years to a
little over four years.
Reducing the Age Target for Buses from 15 Years to 12 Years. The existing 15-year age target for
transit buses was established in the early 1980's,when the City first started acquiring buses for SLO
Transit. In the 1990's the City became eligible to receive Federal Transit Administration (FTA)
grants for its bus acquisitions and replacements. Because FTA regulations set the service life of
transit buses at 12 years, it makes sense for City policy to conform to this standard. Although it
might be feasible to operate buses longer than 12 years,it is often advantageous to replace them in
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Council Agenda Report—Fleet Management Policy Revisions
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order to take advantage of new technology and gain better economy, reliability, and emissions
control.
Specifying Red Base Paint for Fire Emergency Response Units. The existing policy states that fire
emergency response units will be painted lime green. Since then the Council has approved painting
these units red. This revision brings the Financial Management Manual into conformity with
adopted procedures.
FISCAL IMPACT
There is no direct fiscal impact associated with the proposed revisions.
ATTACHMENTS:
Resolution(with amended Section 405 of the Financial Management Manual)
I:\_Council Agenda Reports\2003 agenda reports\Administrative Services(Elliott)\Fleet Management Policy Revisions.DOC
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RESOLUTION NO. (2003 Series)
A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO
AMENDING SECTION 405 OF THE FINANCIAL MANAGEMENT MANUAL
REGARDING FLEET MANAGEMENT
WHEREAS,the City's fleet represents a significant investment in the tools needed to deliver
day-to-day services;and
WHEREAS,the Council wants to minimize fleet operation and maintenance costs; and
WHEREAS, the Council wants to avoid unnecessary capital outlays for fleet expansion and
replacement; and
WHEREAS,the Council wants to improve fleet safety, utility; reliability, and economy; and
WHEREAS,the Council wants to maintain a positive image for the City; and
WHEREAS, the Council wants to encourage responsible use of City vehicles and equipment;
BE IT RESOLVED by the Council of the City of San Luis Obispo to adopt the amended
Section 405 of the Financial Management Manual attached and to rescind Resolution No. 9036 (2000
Series).
Upon motion of , seconded by
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing resolution was adopted this day of . 2003.
ATTEST:
David F. Romero, Mayor
Lee Price, City Clerk
APPROVED AS TO FORM:
Jona owell, City Attorney
1
Section 405
FLEET MANAGEMENT
TABLE OF CONTENTS
OVERVIEW
A. Purpose and Objectives 1
B. Responsibilities 2
POLICIES
C. Maintaining Proper Fleet Size 4
D. Buying New Versus Used 5
E. Alternative-Fuel Units 6
F. Age and Mileage Targets Before Replacement 7
G. Equipping and Marking Newly-Acquired Units 9
PROCEDURES
Budgeting
H. Budgeting for Vehicles or Equipment 10
Purchasing
I. Buying New Units Through a Cooperative Purchasing Contract 11
J. Buying New Vehicles or Equipment Through an Invitation for Bids 12
K. Buying Used Vehicles 13
Surplus Vehicles and Equipment
L. Disposing of Surplus Vehicles and Equipment 14
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Section 405-A: Overview
PURPOSE AND OBJECTIVES
1. Purpose
The City's fleet represents a significant investment in the tools needed to deliver day-to-
day services. This section of the Financial Management Manual outlines responsibilities,
policies, and procedures for managing the City's fleet according to established objectives.
2. Objectives
a. Minimize fleet operation and maintenance costs. Typically, operation and
maintenance costs increase as vehicles and equipment get older and accumulate
more miles.
b. Avoid unnecessary capital outlays for fleet expansion and replacement
Expanding the fleet or replacing an existing unit may not make sense if the unit is
used only sparingly.
C. Improve fleet safety, utility, reliability and economy. Newer vehicles usually
incorporate more advanced technology such as airbags, anti-lock braking systems,
and engines that burn cleaner, last longer, and use less fuel. New equipment
usually incorporates technology that improves the productivity and safety of
equipment operators. Also, newer units are naturally more reliable.
d. Maintain a positive image for the City. Operating older vehicles and equipment
can sometimes indicate cost-consciousness, but if the units are unsightly or noisy
it can reflect lack of care and concern. Also, stylish features with marginal utility
may project an inappropriate image of luxury or extravagance.
e. Encourage responsible use of City vehicles and equipment Conscientious use
of City vehicles and equipment can improve safety and reduce liability.
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Section 405-13: Overview
RESPONSIBILITIES
1. City Administrative Officer Responsibilities
a. Oversee the acquisition, operation, and disposal of all City owned and leased
vehicles and equipment.
b. Amend fleet management policies and procedures as required to accomplish
adopted fleet management objectives.
2. Department Head Responsibilities
a. Ensure fleet management policies and procedures are followed.
b. Budget for fleet replacements and additions.
3. Fire Fleet Coordinator Responsibilities
a. Manage the acquisition and disposal of all units assigned to the Fire Fleet. The
Fire Fleet includes all vehicles specially designed and equipped for fire, medical,
and other emergency response. Because these vehicles require unique service and
repair capability,the Fire Fleet is kept separate from other City units.
b. Service and repair all units assigned to the Fire Fleet.
C. Manage inventories of the fuel, oil, tires and replacement parts needed for all units
assigned to the Fire Fleet.
d. Document the maintenance history and cost, the fuel use, and the accumulated
mileage (or hours) for each unit assigned to the Fire Fleet.
e. Identify units to be disposed of.
4. Transit Fleet Coordinator Responsibilities
a. Manage the acquisition and disposal of all units assigned to the Transit Fleet. The
Transit Fleet includes buses and service vehicles used by the City's transit service
contractor. Because such contractors prefer to service and repair the vehicles they
operate, the Transit Fleet is kept separate from other City units.
b. Oversee the maintenance and operation of the Transit Fleet that are performed by
the transit service'contractor.
C. Identify units to be disposed of.
5. General Fleet Coordinator Responsibilities
a. Manage the acquisition and disposal of all units not assigned to the Fire or Transit
Fleet.
b. Service and repair all.units not assigned to the Fire or Transit Fleet.
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Fleet Management—Responsibilities
C. Manage inventories of the fuel, oil, tires, and replacement parts needed for all
units not assigned to the Fire or Transit Fleet.
d. Document the maintenance history and cost, the fuel use, and the accumulated
mileage(or hours) for each unit not assigned to the Fire or Transit Fleet.
e. Identify units items to be disposed of.
6. Vehicle and Equipment Operator Responsibilities
a. Exercise good judgment.
b. Consult a supervisor or the fleet coordinator if any operator responsibilities are
not clear..
C. Use City units only for conducting City business unless 1) a vehicle has been
approved as a part of compensation or 2) personal use of a vehicle has been
specifically approved by the City Administrative Officer.
d. Arrange for emergency repairs whenever consulting with the fleet coordinator
would be impractical. Pay for emergency repairs by either using a City credit
card or paying for the repair and submitting receipts for reimbursement.
e. Wash and vacuum units periodically to maintain .appearance and prevent
premature deterioration of surfaces and materials. Use City-owned washing
facilities if available. If City-owned washing facilities are not available, use a
commercial car wash. Use commercial waxing and detailing services only with
prior approval of the fleet coordinator.
f. Pay for any parking fees and tolls required while on City business. Submit
receipts for reimbursement.
g. Pay any traffic and parking fines incurred. These payments are not reimbursable..
h. Carry a valid California driver license.
i. Obey all traffic laws.
j. Drive defensively.
k. Use turn signals.
1. Use seat belts and ensure all occupants the use seat belts.
in. In case of accident,follow instructions included in the accident folder.
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Section 405-0: Policies
MAINTAINING PROPER FLEET SIZE
1. The number of units in the fleet should not exceed the minimum number of units needed
to effectively conduct City business.
2. When budgeting for fleet replacements of , average annual mileage or hours should be
calculated for each unit to be replaced. If average annual use appears to be much lower
than the average annual use within the same vehicle or equipment category, the following
options should be considered instead of replacement:
a. Using a vehicle assigned to a convenient vehicle pool
b. Occasionally borrowing equipment from another program
C. Renting a vehicle or equipment item for a limited period of time with City
Administrative Officer approval
d. Reimbursing an employee for occasional use of a privately-owned personal
vehicle with department head approval
Occasional use of a privately-owned personal vehicle for City business should be the
last option considered, because it conflicts with City policies encouraging City
employees to use alternative transportation for commuting.
3. When use of a privately-owned personal vehicle is authorized for City business,
reimbursement will be made at the current Internal Revenue Service rate allowed for
business use of vehicles. Consistent with the IRS calculation of this rate, the per mile
reimbursement rate will reflect all costs associated with operating a vehicle, including,
but not limited to, depreciation, lease payments, maintenance, repairs, fuel, oil, insurance,
and vehicle registration fees.
4. Replacement of units will not be used as a strategy to expand the fleet. When a unit is
replaced, it will expeditiously be declared surplus and be disposed of, unless a) it is
assigned to backup service according to adopted allowances for such assignment or b) the
City Administrative Officer approves temporary retention and use not to exceed 180
days.
5. Section 906 of the City Charter requires City Council approval for sale of City personal
property with a value greater than one hundred dollars. To efficiently implement this
provision, the Director of Finance & Information Technology will be authorized to a)
declare replaced units as surplus whenever the Council has previously approved
replacement through the budget process or other Council action and b) dispose of surplus
units by sale, auction, trade-in, or other disposal method according to City policies and
procedures.
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Section 405-D: Policies
BUYING NEW VERSUS USED
1. To ensure reliability and value, the City should generally purchase new vehicles and
equipment when replacements are needed.
I Exception.. One standing exception to this policy will be that the City will purchase used
general-purpose police sedans.. Police Department has found that it needs general-
purpose sedans that:
a. Are not typically specified for government fleet use and have modest exterior trim
levels so the sedans do not stand out as stripped-down government vehicles. This
is important because these cars are often pressed into service for detective or
undercover work.
b. Have large interior capacities with plenty of seat width and legroom in the rear.
This is important because these cars must occasionally respond to emergencies
carrying four fully equipped patrol officers.
C. Have comfort features like electrically powered, fully adjustable driver seats, tilt
steering wheels, and cruise control. This is important because these cars are often
driven long distances out of town for training and investigation activities.
To meet these three criteria and keep replacement budgets reasonable,the City should
buy used vehicles to replace general-purpose police sedans. This procedure is common
practice in California cities when replacing similar police vehicles.
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Section 405-E: Policies
ALTERNATIVE-FUEL UNITS
1. The City should incorporate alternative-fuel units into its fleets when such units:
a. Will produce less air pollution and use less fossil fuel than comparable
conventional-fuel units.
b. Will not compromise fleet safety, utility and reliability.
C. Can be fueled or recharged locally.
d. Can be serviced economically and locally.
e. Have an acquisition cost that is less than 120 percent of the cost of comparable
conventional-fuel units.
f. Have a projected maintenance cost that is less than 120 percent of the cost of
comparable conventional-fuel units.
2. Age and mileage targets before replacement will not apply to alternative-fuel units.
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Section 405-F: Policies
AGE AND MILEAGE TARGETS BEFORE REPLACEMENT
1. The following table shows the age and mileage expected from City units in front-line
operation before replacement or assignment to backup service:
Years
Allowed in
Age Backup
Vehicle or Equipment Category in Years Mileage Service
Police Patrol Vehicles — 80,000 ---
Police Patrol Motorcycles — 25,000 ---
Fire Pumper Trucks 16 -- 4
Fire Aerial Ladder Trucks 20 4
Other Fire Trucks 10 --- -
Police Sedans 7 80,000
All Other Sedans 10 80,000 —
Station Wagons 10 80,000 ---
Passenger Vans 10 80,000 ---
Utility Vehicles 11 90,000
Pickup Trucks(under 1 ton) 11 90,000 -
Light Trucks(under I ton) 12 100,000 ---
Medium Trucks(1 to 2 tons) 12 60,000 ---
Heavy Trucks(over 2 tons) 12 60,000
Utility Scooters 6 30,000 —
Street Sweepers 5 60,000 5
Vacuum Flusher Trucks 8 60,000 ---
Trailers 18 ___ _
Construction Equipment 17 ---
Buses 12
Mowers 15 ---
Boats 21 _ --
Other Portable Equipment 15 --- —
2. For units bought used, the age and mileage targets apply to age and mileage since new,
rather than age and mileage since acquired by the City.
3. Age and mileage standards will be periodically reviewed and may be adjusted because of
improvements in technology or maintenance practices.
4. In order to maintain the high level of reliability required for front-line emergency
response vehicles, police patrol units should be replaced when they reach their mileage
targets. For the same reason, fire safety units should be replaced when they reach their
age targets.
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5. For non-safety units, the age and mileage targets are only guidelines. Units in
exceptional condition with low-cost repair histories may continue in service beyond
expected age and mileage targets at the discretion of the fleet coordinator. On the other
hand, units may be recommended for replacement before expected age and mileage
targets are reached if there are problems with irreparable damage, high maintenance cost,
unreliability,unsafe components, or technological obsolescence.
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Section 405-G: Policies
EQUIPPING AND MARKING NEWLY-ACQUIRED UNITS
1. Unless it is impractical or unsafe, the fleet coordinator will equip each unit with the
following articles:
a. First aid kit
b. Fire extinguisher
C. Flares
d. Flashlight
e. Blanket
f. Litter bag
g. Vehicle registration forms
h. Proof of insurance
2. Accident folder that includes an incident report form, an information exchange card, and
witness information cards
3. General-purpose sedans, station wagons and passenger vans do not require any special
markings. However, these vehicles must be identified as belonging to the City of San
Luis Obispo through such means as a license plate holder or window decal.
4. Utility vehicles, pickup trucks and, special purpose units will be marked with the current
standard City logo and logo colors on each side and the City identification number on the
tailgate or other conspicuous area.
5. Police patrol vehicles and patrol motorcycles will be marked so that they will be
immediately recognizable as City public safety vehicles. Patrol vehicles will be painted
base white and will have markings that include the standard City logo in black and gold
on the left and right front doors and a black stripe on each side.
6. Emergency response units in the Fire Fleet will be painted base red and marked with a
City logo, "City of San Luis Obispo Fire Department", and a white stripe on each side.
Other Fire Fleet units will be painted base white with a red stripe and identified as "City
of San Luis Obispo Fire Department". General-purpose sedans in the Fire Fleet will be
marked as described in paragraph 3.
7. Transit Fleet vehicles will be marked with a distinctive striping scheme that includes the
term "SLO Transit". Any changes to Transit Fleet markings should be recommended by
the Mass Transportation Committee and approved by the City Council.
8. The City Administrative Officer must approve any deviations from the provisions of
paragraphs 3 through 6 and any additional special markings on any units.
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Section 405-H: Procedures
BUDGETING FOR FLEET ADDITIONS AND REPLACEMENTS
1. To Budget for Fleet Additions
a. Prepare a Capital Improvement Plan project request for each unit to be added.
Group similar units within one operating program into a single request. The
City's budget policies will apply to all such requests.
2. To Budget for Fleet Replacements
a. Examine units that are near or beyond age and mileage targets. Recommend
replacement if justified by maintenance history, overall condition, value, and
obsolescence.
b. Prepare a Capital Improvement Plan project request for each unit to be replaced.
Group similar units within one operating program into a single request. Include
the following minimum information for each unit to be replaced-
City identification number(e.g., 9405)
• Model year(e.g., 1995),make (e.g., Ford), and model (e.g., F-350)
• Description (e.g., one-ton truck)
• Assigned department(e.g., Public Works)
• Assigned program(e.g., Signal and.Light Maintenance)
• Acquisition year(e.g., 1994-95)
• Acquisition price
• Recommended replacement.,year(e.g., 2000-01)
• Estimated total replacement price (including the price of additional equipment
such as radios and installation for new or transferred equipment)
• Itemization of total replacement price (including base price, price of special
equipment, price of special equipment installation, and five percent price
contingency)
• Estimated surplus value
• Basis of estimated surplus value (e.g.,blue book, previous auction proceeds)
• Current odometer or hourmeter reading
• Projected odometer or hourmeter reading at replacement
• Maintenance cost since acquisition
• Maintenance cost in the last full fiscal year
• Justification for replacement before age or mileage targets
• Justification for replacement with other than a like unit
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Section 405-I: Procedures
BUYING NEW UNITS
Through a Cooperative Purchasing Contract
Note: Sedans, trucks, utility vehicles, and some construction equipment should generally be
acquired new through State of California Multiple Award Schedule(CHAS) contracts.
Construction equipment may sometimes be acquired new through `piggyback"purchases,
where other local agencies have conducted competitive procurements and made those
contracts available to the City.
1. Obtain a copy of the purchasing contract that extends contract prices to other government
agencies.
2. Ensure that the specified unit along with options is appropriate for the intended use.
3. Solicit a few informal oral quotations from other dealers to ensure that the contract price
is competitive.
4. Include only those options needed to meet work requirements and typical comfort needs.
Avoid options like fancy wheels or leather upholstery that might be perceived as
luxurious or extravagant, even if there is no difference in price compared to ordinary
options.
5. Specify the exterior paint color to be white. Specify another color (preferably solid and
non-metallic) if it will demonstrably improve safety, enhance utility, or reduce cost.
6. Prepare a purchase order to the contract dealer. Depending on the cost; submit a Council
Agenda Report or CAO Report requesting approval of the purchase order.
1. Receive the unit and examine it for defects and conformance to specifications. If
satisfactory, mark the dealer's invoice `-`okay to pay", initial it, and forward it to
Accounting with a copy of the purchase order. Note: CMAS contracts often include
substantial cash discounts for payment within a stated period of time. For this reason,
invoices should be processed promptly to earn such discounts.
R. Forward any title documents to Accounting.
9. Pay any State of California CMAS invoices and charge the appropriate project account.
The State assesses a nominal service charge—typically one percent of the base price—for
CMAS procurements. Invoices for these service charges usually arrive two or three
months after the procurement.
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Section 405-J: Procedures
BUYING NEW UNITS
Through an Invitation for Bids
Note: Where appropriate vehicles and equipment are not available through cooperative
purchasing contracts, they should be acquired new through invitations for bids.
1. Use the standard invitation for bids(IFB)template to create the specification.
2. In Section A (Description of Work), list the dimensions, capacities, ratings and options
that will adequately describe the unit needed for the intended use. Avoid describing a
unit available from only one manufacturer.
3. Include only those options needed to meet work requirements and typical comfort needs.
Avoid options like fancy wheels or leather upholstery that might be perceived as
luxurious or extravagant, even if there is no difference in price compared to ordinary
options.
4. Specify the exterior paint color to be white. Specify another color (preferably solid and
non-metallic) if it will demonstrably improve safety, enhance utility, or reduce cost.
5. If the unit will be picked up at the dealer or delivered by common carrier, eliminate
insurance requirements from Section B (General Terms and Conditions) and eliminate
Section E (Insurance Requirements) from the specification.
6. Eliminate the contract requirements from Section B (General Terms and Conditions).
Eliminate Section D (Form of Agreement) from the specification.
7. In Section C (Special Terms and Conditions), change language about awarding a contract
to language about issuing a purchase order.
8. Depending on estimated cost; submit a CAO Report or Council Agenda Report
requesting authorization to invite bids. If a Council Agenda Report is submitted, request
that the City Administrative Officer be authorized to award a purchase order if the cost is
within budget.
9. Advertise for bids.
10. Open bids.
11. Prepare a purchase order to the successful bidder. Submit a CAO Report requesting
approval of the purchase order.
12. Forward the purchase order to Accounting.
13. Receive the unit and examine it for defects and conformance to specifications. If
satisfactory, mark the dealer's invoice "okay to pay", initial it, and forward it to
Accounting with a copy of the purchase order.
14. Forward any title documents to Accounting.
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Section 405-K: Procedures
BUYING USED VEHICLES
Note: Although the City's past policy has been to buy used vehicles through dealers who sell
used rental vehicles for major rental companies, there have been two disadvantages with using
this procedure: 1)prices have tended to be at the high end of the retail range, above what is
commonly referred to as "high blue book"value and Z) long.-term reliability has been dubious
because of the effects of multiple drivers and hard rental service.
To avoid these problems and,particularly, to find vehicles in excellent overall condition with
relatively low mileage and reasonable prices, the City should use local auto brokers to find
suitable vehicles at auction. This approach avoids high dealer markups and allows purchases
of vehicles from leased corporate fleets. Such vehicles are.usually in better shape than rental
vehicles because they have typically had only one driver and have been subject to strict lease
conditions regarding condition and mileage at the end of the lease.
1. Depending on estimated cost, submit a CAO Report or Council Agenda Report
requesting authorization to buy a used vehicle.
2. Search for a vehicle through brokers who buy and sell vehicles that have been returned
after leases on them have expired.
3. Select a late model, low mileage vehicle that appears to be in excellent overall condition.
Consider only vehicles with options needed to meet work requirements and typical
comfort needs. Avoid vehicles with options like fancy wheels or leather upholstery that
might be perceived as luxurious or extravagant, even if there is no difference in price
compared to ordinary options.
4. Perform a technical inspection to confirm the vehicle is in excellent condition.
5. Negotiate a purchase price, including an extended warranty as appropriate,to be included
in a written buyers order from the dealer.
6. Prepare a payment voucher and submit a CAO Report for approval..
7. Forward the payment voucher to Accounting.
8. Receive the vehicle and examine it for defects and conformance to the buyers order. If
satisfactory, pick up the check from Accounting and pay thebroker.
9. Forward any title documents to Accounting.
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Section 405-L: Procedures
DISPOSING OF SURPLUS UNITS
1. When a unit is replaced or otherwise permanently removed from service, report to
Accounting that it is surplus and available for sale.
2. Include in each such report the following information for each unit reported:
• City identification number(e.g., 8901)
• Vehicle identification number(VIN)
• License number
• Model year(e.g.,1995), make (e.g., Ford), and model (e.g., F-350)
• Description(e.g., one-ton truck)
• Assigned department(e.g., Public Works)
• Assigned program(e.g., Signal and Light Maintenance)
• Acquisition year(e.g., 1994-95)
• Estimated surplus value
• Basis of estimated surplus value(e.g.,blue book, previous auction proceeds)
• Current odometer or hourmeter reading
• Justification for replacement
• Current location
• Authorization to surplus (e.g., budget document that authorized replacement or
other Council authorization to replace or dispose of the unit)
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