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Item-5E MemoCity of Southlake, Texas MEMORANDUM November 3, 2004 TO: Billy Campbell, City Manager FROM: Rick Black, Director of Public Safety (Ext. 2421) SUBJECT: Authorize the City Manager to enter into a Lease Agreement for ten police traffic motorcycles between Dallas Harley- Davidson and the City of Southlake. Action Requested: City Council approval of a two (2) year lease agreement for ten police traffic motorcycles and related maintenance between Dallas Harley- Davidson and the City of Southlake. Background Information: The City of Southlake Department of Public Safety utilizes ten Harley - Davidson motorcycles for traffic enforcement and response to accidents and other calls for service. Detailed cost analysis has shown that it is more cost effective to lease these vehicles with maintenance included than to purchase and maintain them internally. Dallas Harley- Davidson was the only bidder because of the inclusion of maintenance in the agreement. Financial Considerations: This lease agreement provides a fee of $350.00 per month per motorcycle for a total of $42,000.00 for the year 2005 and $375.00 per month per motorcycle for a total of $45,000 for the year 2006. Funds were budgeted for this expense for the year 2005. Funds for the year 2006 expense have not been budgeted. Financial Impact: There is a $42,000 financial impact annually for the year 2005 and $45,000 for the year 2006. This is significantly less than the cost of purchasing and maintaining motorcycles. Small increases are likely in future years but typical increases are less than five percent annually. Citizen Input/ Board Review: No citizen input has been received. Not subject to any Board review. Legal Review: This agreement has been reviewed and approved by City Attorney Debra Drayovitch. Alternatives: Purchase price for these motorcycles is $17,500 each with standard equipment. Most police agencies replace motorcycles after three years or 45,000 miles prior to large expenditures for overhauls. After the first year warranty, maintenance averages $2,200 annually for a three year cost of ownership of $219,000 or $608 per month per motorcycle. Billy Campbell November 3, 2004 Page 2 Supporting Documents: Staff Recommendation: Lease Agreement with Dallas Harley- Davidson. Approve the Lease Agreement for leasing ten motorcycles from Dallas Harley - Davidson at the November 9, 2004 City Council meeting. RB /mrp