Placement: Consent Agenda
Action Requested: Motion / Vote
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Approve Extension of the Alternate Vehicle Purchasing Plan for an Additional Fiscal Year.
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Submitted By: Alaina Knofla, Acting Procurement Manager, Procurement Management Division (PMD).
Strategic Plan Link: The City's Goal of a high-performing city government organization.
Executive Summary (General Business): Due to ongoing supply chain challenges in the automotive industry, an extension of the alternate vehicle purchasing plan, approved by Council last year, is requested for an additional fiscal year.
Presentation Information: N/A.
Staff Recommendation: Move that the Council waive the bidding, per City Code of Ordinances, Section 35.08(c), good cause shown, and approve extension of the Vehicle Purchasing Plan for an additional fiscal year (FY 25/26).
Alternate Recommendations:
1. Move that the Council amend the recommendation and approve extension of the Vehicle Purchasing Plan as amended.
2. Move that the Council not approve and/or provide staff with direction.
Background: Since the supply chain interruptions of 2020, purchasing and acquiring vehicles has been challenging in many instances. Lead times and availability for new vehicles were at an all-time low approximately 3 years ago. Delivery ETA’s surged to nearly a year from order to delivery, and the windows to order vehicles were merely weeks, and in some instances, days. To minimize some of the delays and inability to place orders for vehicles, Facilities and PMD created a flexible Vehicle Purchase Plan that was initially approved by Council on June 12, 2023. This Plan allowed for the purchasing of vehicles through local (first priority) and statewide dealerships outside of the currently approved cooperative contracts, so long as the vehicles are priced within 10% of the contract pricing (up or down).
Issues/Analysis: The Vehicle Purchase Plan continues to be an effective tool to mitigate sourcing challenges. Several dozen vehicles have been acquired for various City Departments using this Plan over the past two years. Over the past six months, the new vehicle market has demonstrated a modest but steady recovery. Manufacturer production levels have normalized for most light-duty vehicles, and order windows have largely returned to pre-2020 norms. However, delivery times for custom or fleet-built vehicles remain extended, often between four to seven months. In addition, dealer inventories are still constrained for certain vehicle classes due to continued microchip shortages and shifting manufacturer priorities toward higher-margin consumer models. Market analysts project that while supply chain pressures will continue to ease into mid-2026, pricing volatility and constrained availability may persist, especially for specialized fleet vehicles. Given the ongoing stabilization in the vehicle market, but with key uncertainties still present, it is recommended that the flexible Vehicle Purchase Plan be extended for an additional year, Fiscal Year 2025-26. This extension will maintain the flexibility departments need to source vehicles strategically and responsively. Continuing the Plan positions the City to better navigate emerging challenges in the automotive sector, including potential supply disruptions, pricing shifts, or regulatory changes that could impact fleet procurement.
Financial Information: Budgeted funds for vehicle purchases will be utilized.
Special Consideration: N/A.
Location of Project: N/A.
Attachments: Vehicle Purchasing Plan Memo.
NOTE: All of the listed items in the “Attachment” section above are in the custody of the City Clerk. Any item(s) not provided in City Council packets are available upon request from the City Clerk.
Internal Reference Number: 25150-01.
Legal Sufficiency Review: Reviewed by Alyssa Lunin, Senior Deputy City Attorney. Approved as to Legal form and sufficiency by Richard Berrios, City Attorney.