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W A T E R E N E R G Y L I F E <br />RIVERSIDE PUBLIC UTILITIES <br />P <br />UB LIC UTILITIES Board Memorandum <br />BOARD OF PUBLIC UTILITIES DATE: JULY 10, 2023 <br />SUBJECT: AMEND SIX LEASE AGREEMENTS WITH ALTEC CAPITAL SERVICES, LLC. <br />FOR AN ESTIMATED PROJECTED EXPENDITURE OF $454,852.26 UPON <br />DELIVERY OF REPLACEMENT VEHICLES <br />ISSUE: <br />Consider approving amendments to six existing Lease Agreements with Altec Capital Services, <br />LLC to reduce monthly payments upon delivery of replacement vehicles. <br />RECOMMENDATION: <br />That the Board of Public Utilities approve amendments to six existing Lease Agreements with <br />Altec Capital Services, LLC. of Birmingham, Alabama, saving 10% on vehicles exceeding 12 - <br />month delivery for an estimated expenditure of $454,852.26, upon delivery of replacement <br />vehicles. <br />BACKGROUND: <br />Riverside Public Utilities (RPU) uses a variety of vehicles to enable crews to maintain a reliable <br />electric service to its customers. These vehicles need to be in safe, operable condition and <br />compliant with state and local emissions regulations. To ensure operating efficiency, employee <br />productivity, and public safety, vehicles that are reaching the end of their economic and useful life <br />need to be replaced. <br />On December 12, 2014, the Board of Public Utilities approved nine lease agreements with Altec <br />Capital Services, LLC. (Altec) for the term of seven years at a monthly cost of $50,410.32. Under <br />the terms of the Lease, the City of Riverside (City) could continue to lease the vehicles at the end <br />of their lease term as needed. These nine vehicles have reached their Lease maturity date but <br />are still in use by the City. Altec has agreed to amend the original Lease Agreement with an <br />extension for a minimum term of 12 months, at a 10% reduction of each monthly payment, <br />effective immediately upon execution. Three of the nine leased vehicles will remain under the <br />original lease term as they are expected to be replaced within 12 months. <br />On February 27, 2023 and April 4, 2023, the Board of Public Utilities and City Council, <br />respectively, approved the purchase of 12 vehicles from Altec to replace the Altec vehicles that <br />are at the end of their original seven year lease. Build time after purchase takes approximately <br />nine months to two years, due to supply chain constraints. Six of those vehicles' build time is over <br />