Department of Financial Management
411 West Ocean Boulevard, 6th Floor
Long Beach, CA 90802
562-570-6425
May 2, 2023
HONORABLE MAYOR AND CITY COUNCIL
City of Long Beach
California
RECOMMENDATION:
Adopt a Resolution authorizing the City Manager, or designee, to execute a contract, and any necessary documents including any necessary subsequent amendments, with Haaker Equipment Company, of La Verne, CA, for the purchase of 14 CNG-fueled Elgin Pelican Street Sweepers , with related equipment and accessories, on the same terms and conditions afforded to Sourcewell, in a total amount not to exceed $7,569,333, inclusive of taxes and fees; and, Authorize the City Manager, or designee, to execute a lease-purchase agreement, and related financing documents, with Banc of America Public Capital Corp, of San Francisco, CA, for the financing of street sweepers, payable over a five-year period at an interest rate to be determined when the agreement is executed. (Citywide)
DISCUSSION
City Council approval is requested to enter into a contract with Haaker Equipment Company (Haaker), for the purchase and delivery of 14 CNG-fueled, Elgin Pelican Street Sweepers, for use by the Public Works (PW) Department, and execute a lease-purchase agreement through the City of Long Beach’s (City) Master Lease Agreement with Banc of America Public Capital Corp (BAPCC), for the financing of street sweepers payable over a five-year period.
The Environmental Services Bureau of the PW Department is replacing 14 Elgin Pelican CNG street sweepers that are currently lease-financed and are due to be replaced in Fiscal Years (FY) 2023 and 2024. The current sweepers are nearing the end of their useful lifecycle , with the last remaining lease payment scheduled to be completed in September 2024. The first of the new sweepers w ill be delivered October 2024 .
Purchasing the replacement units now will minimize repair downtime and ensure the lowest net operational costs for the City.
Elgin Pelican broom sweepers make up the majority of the City’s street sweeper fleet and have proven most effective at clearing large, heavier debris such as leaf fall, common in many of Long Beach’s heavily tree-lined streets. The three-wheel model requested has a smaller overall footprint and is more maneuverable, which assists in complete and more rapid cleaning of smaller streets and alleyways.
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HONORABLE MAYOR AND CITY COUNCIL
May 2, 2023
The Fleet Services Bureau of the Department of Financial Management researched procurement options for purchase of CNG-fueled street sweepers and discovered other agencies had completed an open, fair, transparent, and competitive procurement process. The City reviewed the cooperative agreement options and determined that the contract between Sourcewell and Elgin Sweeper Company, through their local distributor, Haaker Equipment Company, provided the best value to the City. Elgin Pelican was selected based on their competitive pricing, best overall quality , and selection of equipment/product offering s to meet the needs of cooperative members and other governmental authorities.
City Charter Section 1802 provides an alternative procurement method by permitting the City to purchase or otherwise obtain services, supplies, mater ials, equipment, and labor using existing contracts from other governmental agencies. This alternative procurement method can save time and reduce costs through economies of scale by purchasing under existing contracts from other government agencies on a v oluntary and selective basis , when authorized by a Resolution adopted by the City Council.
This matter was reviewed by Deputy City Attorney Anita Lakhani on April 13 , 2023, Purchasing Agent Michelle Wilson on April 3, 2023, and by Revenue Management Officer Geraldine Alejo on April 17, 2023.
SUSTAINABILITY
The City is a recognized leader in the use of alternative fuels , having been named the number two municipal Green Fleet in the nation by the National Association of Fleet Administrators (NAFA) in 2022. The City is embracing zero-emission vehicles (ZEVs) as quickly as they become available (along with funding and infrastructure support). The fleet includes 81 ZEVs (including its first fully electric pickup) and 90 plug-in hybrids.
Zero-emission sweepers are not yet generally available on the market; however, these street sweepers are powered by renewable compressed natural gas fuel and are in full compliance with local Air Quality Management District regulations, significantly reducing particulate matter and toxic emissions from fuel combustion.
TIMING CONSIDERATIONS
City Council action to adopt a Resolution and award a contract concurrently is requested on May 2, 2023, to ensure the contract is in place expeditiously.
FISCAL IMPACT
The total purchase price of the street sweepers will not exceed $7,569,333. Based on an indicative interest of 3.86 percent on March 13, 2023 , the total amount for the lease - purchase agreement with BAPCC is estimated at $8,335,385, which includes principal, interest, and escrow fees. This equates to approximately $ 1,667,077 in annual debt service costs for the five-year life of the financing. The annual debt service cost increase
HONORABLE MAYOR AND CITY COUNCIL
May 2, 2023
from the current lease -purchase agreement to the new lease -purchase agreement is estimated at $542,631. This amount is subject to change and will be finalized when the agreement is executed. The annual debt service cost increase will be included in the FY 24 Fleet Services Memorandum of Understanding (MOU) , and will be billed through charges to the General Fund Group in the Public Works Department. The annual maintenance and fuel for these units is estimated at $195,517. There is no on -going annual cost increase anticipated for the maintenance and fuel associated with the new units. These costs will continue to be billed to the General Fund Group in the Public Works Department through the Fleet S ervices MOU process. This recommendation has no staffing impact beyond the normal budgeted scope of duties and is consistent with City Council Priorities. There is no local job impact associated with this recommendation.
SUGGESTED ACTION:
Approve recommendation.
Respectfully submitted,
KEVIN RIPER
DIRECTOR OF FINANCIAL MANAGEMENT
ATTACHMENT - RESOLUTION
APPROVED:
THOMAS B. MODICA
CITY MANAGER
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OFFICE OF THE CITY ATTORNEY
DAWN MCINTOSH, City Attorney
411 West Ocean Boulevard, 9th Floor
Long Beach, CA 90802-4664
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF LONG BEACH AUTHORIZING THE CITY
MANAGER TO EXECUTE AN AGREEMENT WITH HAAKER
EQUIPMENT COMPANY OF LA VERNE, CA TO
PURCHASE FOURTEEN CNG-FUELED ELGIN PELICAN
STREET SWEEPERS , THROUGH THEIR CONTRACT
WITH SOURCEWELL IN AN AMOUNT NOT TO EXCEED
$7,569,333, INCLUDING TAXES AND FEES
WHEREAS, the Charter of the City of Long Beach (the “City”), Section 1802, permits the City to purchase services, supplies, materials, equipment and labor with other government agencies by purchasing under their contracts on a voluntary and selective basis when authorized by resolution; and
WHEREAS, the City desires to purchase fourteen (14) CNG-fueled Elgin Pelican Street Sweepers, with related equipment and accessories (“Street Sweepers”); and
WHEREAS, Sourcewell has a Contract with Haaker Equipment Company (“Haaker”) for the purchase of Street Sweepers, Contract No. RFP #093021 (“Sourcewell Contract”); and
WHEREAS, the City’s participation in the Sourcewell Contract will facilitate the City’s ability to purchase these Street Sweepers as well as provide considerable cost benefits to the City; and
WHEREAS, if the City had to utilize a formal bid process rather than participate in the Sourcewell Contract, considerably more funds would be required; NOW, THEREFORE, the City Council of the City of Long Beach resolves as follows:
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OFFICE OF THE CITY ATTORNEY
DAWN MCINTOSH, City Attorney
411 West Ocean Boulevard, 9th Floor
Long Beach, CA 90802-4664
Section 1. The above recitals are true and correct and are incorporated herein by this reference.
Section 2. The City Manager or designee is hereby authorized to enter an agreement with Haaker Equipment Company to purchase fourteen (14) CNG-fueled Elgin Pelican Street Sweepers, with related equipment and accessories , of the same type and kind identified in the Sourcewell Contract except as modified by mutual agre ement of the City and Haaker, and the purchase by the City shall be on the same terms and conditions afforded to Sourcewell in an amount not to exceed Seven Million Five Hundred Sixty Nine Thousand Three Hundred Thirty Three Dollars ($7,569,333) including taxes and fees.
Section 3. This resolution shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this resolution.
I hereby certify that the foregoing resolution was adopted by the City Council of the City of Long Beach at its meeting of _________________________, 2023, by the following vote:
Ayes: Councilmembers:
Noes: Councilmembers:
Absent: Councilmembers:
City Clerk