May 9, 2006

SUBJECT:                   Extension of an Existing Lease of Three Electric Vehicles for the Pool Car Fleet (F0503-66)

REPORT IN BRIEF

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

BACKGROUND

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 15% of passenger cars/light trucks operated by the City. 

During the past six years, the City has leased Toyota RAV4 electric vehicles from Toyota Motor Sales USA.  This contract was awarded by Council on February 29, 2000 (RTC 00-074) for a three-year period.  Two extensions to this contract have also been awarded by Council:  one one-year extension on May 11, 2004 (RTC-04-163) and another one-year extension on April 26, 2005 (RCT-05-119).

If the vehicles and the battery and charging 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.

DISCUSSION

Since the vehicles and the battery systems are in good condition on these three vehicles, staff recommends that the lease period be extended by an additional year.  Along with low emissions, these three 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.

FISCAL IMPACT

Costs already incurred for the original agreement and two one-year extensions has been $120,376.  Cost for this additional one-year extension will be $11,691, bringing the total contract amount to $132,067.  Funds are available in Fleet Replacement Equipment Account 020700.

RECOMMENDATION

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 $11,691, for three electric vehicles, brining the total six-year contract amount to $132,067.

Prepared by:

Elaine Wesely

Purchasing Officer

Reviewed by:

Mary J. Bradley

Director, Finance

Reviewed by:

Marvin Rose

Director, Public Works

Approved by:

Amy Chan

City Manager

Attachments

A.       Lease Amendment and Extension Agreement (.pdf)