May 11, 2004

SUBJECT: Extension of an Existing Lease of Five Electric Vehicles for the Pool Car Fleet (F0304-68)

Approval is requested for a one-year extension of an existing lease with Toyota Motor Sales USA, Inc., of Torrance for five Toyota RAV4 electric vehicles for the Department of Public Works Fleet Maintenance Division.

The City of Sunnyvale Alternative Fuels Project was approved by the Sunnyvale City Council in 1994 for the purpose of introducing alternative fuel vehicles into the City’s fleet to improve air quality and reduce the City’s dependence on foreign oil products. Several alternative fuel vehicles have been introduced into the City fleet over the past ten years and now represent 16% of passenger cars/light trucks operated by the City.

During the past three years, the City has leased five Toyota RAV4 electric vehicles from Toyota Motor Sales USA. This contract was awarded by Council on February 29, 2000 (RTC 00-074).

Since Toyota is responsible for maintaining/replacing the unique (and expensive) battery pack used to power their electric vehicles, a standard three-year lease is used as a base to address the lower end of battery life. The vehicles are periodically inspected by Toyota at their expense to address problems and evaluate condition of the vehicle.

If the vehicles and the battery systems are in good condition, Toyota offers to extend the lease term by one year. If the battery system fails in that year, the vehicle is returned to Toyota with balance of lease payments refunded to the City.

Since the vehicles and the battery systems are in good condition, staff recommends that the lease period be extended by one year. Along with low emissions, these five vehicles have proven to be very reliable and economical to operate. The Toyota RAV4 vehicles are well suited for their intended purpose of providing local (100 mile driving range) trips and have been well received by City staff.

Staff has determined that the continued lease of the City’s alternative fuel vehicle fleet is in the City’s best interest. Staff, therefore, recommends extending the lease from April 22, 2004, through April 22, 2005.

Cost to the City for all five vehicles under the original three-year lease agreement was $89,200. Cost for the one-year extension will be $19,485, making a total cost of $108,685 for a four-year lease of four alternative fuel vehicles. Funds are available in Fleet Replacement Equipment Account 020700.

It is recommended that Council authorize a one-year extension of an existing lease with Toyota Motor Sales USA, Inc., in substantially the same form as the attached Lease Amendment and Extension Agreement and in the amount of $19,485 for five electric vehicles.

Prepared by:


Elaine Wesely
Purchasing Officer

Reviewed by:


Mary Bradley
Director, Finance

Reviewed by:


Marvin Rose
Director, Public Works

Approved by:


Amy Chan
City Manager

1. Lease Amendment and Extension Agreement (.pdf Format)
2. Original Lease Agreement (.pdf Format)