CITY OF PACIFICA
COUNCIL AGENDA SUMMARY REPORT
11/28/2022
1 SUBJECT:
Purchase of City Vehicles from Vehicle Replacement Fund 72 RECOMMENDED ACTION:
Approve the Following Actions Related to City Vehicle Purchases:
1) Approve Purchase of City Vehicles from Vehicle Replacement Fund 72 for $1,922,000, including a 3% cost escalation factor for a total of $1,979,660. 2) Adopt the Resolution to Approve FY 22-23 budget amendment to:
• Appropriate $1,979,660 from the Vehicle Replacement Fund 72 for purchase of City vehicles.
• Transfer $500,000 from Wastewater Fund 18 to the Vehicle Replacement Fund 72 for purchases related to Wastewater Operations.
STAFF CONTACT:
Lisa Petersen, P.E.- Director of Public Works
(650) 730-4948
[email protected]
BACKGROUND/DISCUSSION:
The Vehicle Replacement Fund is a fund the City has had in place for many years dedicated to replacement of old and/or high-mileage City vehicles. Due to the City of Pacifica’s longstanding operating budget challenges, vehicle replacements have been historically underfunded, resulting in a vehicle fleet that is significantly out of alignment with best practices for operational efficiency and safety. Instead of funding an appropriate level of annual vehicle replacement funds allocated from each department’s operating budget, the City has been forced to utilize one-time funding sources to augment a small amount of annual operating funding in order to replace the most urgently needed vehicles in recent years. For example, here’s a list of recent (since 2019) priority vehicle replacements with notes on why the original vehicle was replaced for fire, police (PD), engineering (ENG, and Field Services (FS) purchased through the Vehicle Replacement Fund 72:
Fire Pumper Truck $600k 2019 (age)
Fire Ford F 250 Crew Cab $50k 2019 (replaced Rescue Rig) Fire Tahoe SUV $50k 2020 (new vehicle)
5-PD Pursuit Ford Utility $250k 2020 (high milage/maintenance) PD Pursuit Tahoe $69k 2022 (high mileage/maintenance)
PD Motorcycle $38k 2021 (age/high mileage)
PD Ford Utility Vehicle 2022 (high mileage)
ENG Prius $34k 2022 (age/rusted)
2-FS Ford F350 $85k 2020 (age/rusted)
FS Asphalt Truck $200k 2020 (age/rusted)
Pacifica City Council 2
November 28, 2022
In addition to these vehicles, four other vehicles for Field Services/Engineering are on order but have not been received and include three trucks and one Prius. The vehicles being replaced average 17.5 years and are rusted and high maintenance. Wastewater purchased 6 trucks during this time period with funding from the Enterprise Fund.
Since the inception of the Vehicle Replacement Fund in FY 2007-08, the vehicle replacement program was funded by annual allocation-based contributions from the General Fund, Wastewater Operating and Streets Funds. Due to ongoing financial challenges, the General Fund contribution to the fund was based on an allocation between the Police, Fire, Public Works and PB&R departments and was also gradually reduced over the years from $238,743 in FY2007-08 to $165,162 in FY 2019-20, until it stopped for budgetary reasons in FY 2020-21.
With adoption of the FY 22-23 budget, an ongoing annual contribution of $100,000 to the Vehicle Replacement Fund (Fund 72) was resumed.
For the FY 21-22 Budget, Council approved a $982,800 expense from Fund 72, including depreciation expense and a transfer of $356k to the Motor Pool Operating Fund (Fund 71) to cover overages on vehicle repairs due to the aging fleet. The remaining funds went towards vehicle replacements. With the help of a consultant, staff has been developing a Comprehensive Fleet Replacement Assessment Schedule (Schedule) for determining purchases of needed 2023 City vehicles and delayed a recommendation during the FY 22-23 budget process for purchase of City vehicles until the Schedule was finalized. The current available fund balance in the Vehicle Replacement Fund 72 is $2,203,400.
Comprehensive Fleet Replacement Assessment Schedule
Staff recently hired Management Partners (now Baker Tilly), a government consultant, to come up with a process to identify several needs related to vehicle replacements based on best practices including timing for City vehicle replacement purchases and yearly contributions needed to the Vehicle Replacement Fund 72 to allow for vehicle purchases when needed.
Management Partners had previously worked on a 2019 study for Public Works that helped to identify needs in the City’s Motor Pool section.
Management Partners prepared a 15-year Comprehensive Fleet Replacement Schedule to assist the City with managing fleet purchases, costs, contributions, and cash flow needed for Fund 72 for eventual replacement of the City’s 117 vehicles. Of these vehicles, more than half (58%) have been in service for 10 or fewer years and more than a third (35%) are 16 years or older. (Attachment 1).
Management Partners developed the fleet replacement schedule using a point system that considers age, utilization, maintenance/repair costs, reliability, and downtime. When a vehicle reaches 28 points or more, it becomes a candidate for replacement. Based on the Schedule, 54 City vehicles are either overdue for replacement or need to be replaced in 2023. The total cost of these needed replacements is estimated at $4,451,640. Except for police patrol vehicles that are replaced at 3 years due to high mileage, use and maintenance needs, the majority of the City’s vehicles are shown in the Schedule to be replaced between 10 to12 years as a best practice. The Schedule developed by Management Partners also provides the yearly contributions needed for Vehicle Replacement Fund 72 to support necessary City vehicle purchases. Starting in year 2023, the contribution is $1,085,728 and the final contribution needed in year 2038 for the fifteen (15) year Schedule is $1,639,113. As noted above, there have been no or limited contributions to Fund 72 in recent years and the balance in Fund 72 is $2,203,400.
Recommended Vehicle Replacements for 2023
The City does not have the funding to complete all of the 54 vehicle purchases recommended Pacifica City Council 3
November 28, 2022
by the Management Partners replacement Schedule. Therefore, staff is delaying purchase of a number of vehicles recommended for replacement and has added longer times for replacement of these vehicles in the Schedule. This will push out costs and require higher yearly contributions or one-time payments to Fund 72 to account for the delay of these purchases.
Staff has developed the below list of vehicles that are considered critical for replacement in 2023 as shown below with approximate costs and notes regarding the reason for replacement:
Public Works
Wastewater Vac Con to replace 10-year-old Vac Con-$625k (age/repair issues) Field Services 10-yard dump truck to replace 30-year-old dump truck-$226k (age/repair issues) Field Services JD Backhoe to replace 2012 model-$200k (age/used daily) Field Services Longhorn trailer to replace 20-year-old trailer-$35k (age/deterioration) Field Services mid-size trailer to replace 20-year-old trailer-$30k (age/deterioration) Field Services large area mower to replace 17-year-old mower-$80k (age/high hours) Field Services small mower to replace 17-year-old mower-$50k (age/high hours) Toolcat Skid Steer to replace 19-year-old Bobcat Skid Steer-$65k (age/high hours) Police Department
ATV to replace 17-year-old Yamaha Rhino -$32k (age/replacement parts not available) Durango to replace 10-year-old Ford Fusion-$56k (high mileage) Durango to replace 17-year-old Crown Victoria-$56k (age/high mileage) F150 Responder to replace 17-year-old F150-$86k (age/off road vehicle) 4-Police Utility Explorers to replace high mileage 2018 models-$295k (high mileage/maintenance issues/one totaled in accident)
Ford Escape/Explorer for new CSO position -$50k (new position) Upfit 2023 Tahoe - $30K (required additions)
Upfit 2023 Durango - $6K (required additions)
The age of the vehicles and/or high-mileage and usage necessitate replacement of these vehicles, and one of the PD Utility Explorers was totaled in an accident. The vehicles are needed for the Police and Public Works Departments to complete work tasks related to their duties. Without the necessary police pursuit vehicles, police may not be able to respond in a timely manner to emergency calls. These vehicles are driven on average 24/7 (used for different shifts) and are high mileage. It is anticipated that these vehicles will be over a year out to receive, which will put them over the 100k mileage range. Vehicles in this category break frequently (transmissions, water pumps and other repairs have already been made) and are not available for use when needed or can break down during critical officer pursuits. It is considered best practice to replace these vehicles prior to reaching this high mileage level or officers may not have vehicles they can use for urgent calls as they may be out for service. It is important to note that police vehicles idle frequently, and this idling also adds additional wear and tear on the vehicles beyond what the odometers display increasing reliability issues. Two 17-year-old and one 10-year-old police vehicle are also recommended for replacement due to the vehicle age and condition and parts for the 17-year-old police ATV that is used for beach incidents and rescue are no longer available for purchase. Additionally, the new Community Service Officer (CSO) position for management of the Oversized Vehicle (OSV) parking program requires a vehicle. Currently, the Police Department has two full-time CSO positions, one is working in records due to a staffing shortage there, but when both are back working in patrol one would not have a vehicle to use. There is also a part-time CSO position that would need to share these vehicles. The positions are necessary to enforcement of the OSV ordinance and other parking enforcement throughout the City.
Public works equipment is used to manage storm events and complete daily necessary maintenance and help prevent sanitary system overflows. For the Public Works Department to function effectively, the purchase of these vehicles is required. The Wastewater Vac Con is Pacifica City Council 4
November 28, 2022
used for cleaning sewer lines that helps prevent Sanitary System Overflows (SSOs). Over the last year the Vac Con has broken down on many occasions causing critical maintenance work to be delayed that can cause SSOs. The remaining seven public works equipment purchases requested have an average age of 19 years. Equipment at this end-of-life age requires constant maintenance and is often out of service when needed. Additionally, overload on Motor Pool staff to repair equipment of this age that breaks down often slows other critical fleet repairs and can cause operation budget overruns due to needed repairs exceeding expectations for a typical repair year.
Staff locked in rates for the vehicle purchases for the police pursuit and utility vehicles and the Wastewater Vac Con. It is anticipated that if the vehicles are not purchased now, vehicle prices for these purchases could increase as much as 20% over the next year. Time frames for receiving the vehicles is approximately a year out due to supply chain issues at dealerships.
The total costs of these vehicles will be approximately $1,979,660 (including 3% cost escalation) and will come from the Fund 72 available fund balance and a one-time contribution from the Wastewater Enterprise Fund related to the anticipated staff salary savings and vehicle replacement funding accounted for by the new rate increase. It will be important for the City to identify in the future an on-going revenue stream to account for the necessary yearly contributions needed to the Vehicle Replacement Fund 72 for General Fund supported vehicle replacements to allow for continued replacement of these City vehicles.
Electric Vehicles (EVs)
The City has hybrid vehicles in the fleet that can run on electric power for use in areas that are conducive for this type of vehicle. Availabilitly of electric cars have increased over the years with the technology beginning to be applied toward pickup trucks and SUVs. However, current demand for electric vehicles is keeping costs high and extending purchase lead times. Police vehicles must be certified for police use and pursuit rated by the manufacturer to protect the public and officers when driving at high speeds and staff is not aware of an electric vehicle that meets these requirements. Although some testing of EVs is starting for police use, data is still being collected and needs to be evaluated. Decisions on which vehicles to purchase for police use by the City’s Police Department are based on published annual testing/driving reports that are provided by the Michigan State Police and Los Angeles Sheriff’s Department and these reports currently have no EV’s listed. Staff will continue to monitor the testing of police vehicles as reports related to this are developed.
Public Works equipment, such as dump trucks and backhoes, has not expanded into the EV market at this time. Public Works does look to purchase smaller equipment (as available) that is battery powered such as blowers, however the equipment’s capability must meet with the department’s operation needs. The equipment recommended for purchase in this report has been evaluated and requires gas operation.
To implement an EV fleet, the City would need to install infrastructure to support the fleet at the City’s facilities. This would have to include the ability to charge vehicles during prolonged power outages, such as the three-day PSPS event in 2019 and other less lengthy outages during recent large storm events. The cost for this change would be significant and funding would need to be identified for the work.
Recommendation
The City Manager is recommending the Council approve the purchase of City vehicles for $1,979,600, including a 3% cost escalation, and amend the City’s FY 22-23 budget to appropriate this amount in the Vehicle Replacement Fund to show the entire purchase amount in Fund 72. In addition, it is recommended Council approve a budget transfer from Wastewater Fund 18 to the Vehicle Replacement Fund 72 to cover the portion of the purchase related to necessary Wastewater equipment.
Pacifica City Council 5
November 28, 2022
GOALS AND WORK PLAN:
• “Stewardship of City Infrastructure” - Public Works is responsible for repairing and replacing City infrastructure. Replacement of past-useful-life equipment will allow staff to work continuously and efficiently to complete necessary infrastructure repairs. • “Maintaining a Safe Community” - The Police Department needs functioning vehicles to respond to emergencies and protect people and properties. Public Works needs working equipment to respond to emergency weather events and other emergency situations.
Alternative Action:
Council may choose to not move forward with the vehicle purchases or only purchase certain vehicles. This is not recommended as these vehicles are critical to providing police and public works maintenance services to the community. Staff may be unable to provide critical police response or public works maintenance and emergency sewer/storm response without the needed vehicles. Delaying vehicles will also increase costs and the time when staff receives the vehicles as vehicle costs are increasing rapidly and receipt of vehicles upon purchase is currently 12 months out or more.
FISCAL IMPACT:
The majority of funds for the vehicle purchases are coming from the City’s Vehicle Replacement Fund 72 available fund balance. Below is the Source and Use of Funds for the vehicle replacements. Included in the Source of Funds is a one-time transfer from the Wastewater Enterprise fund related to anticipated salary cost savings of $300,000 due to vacancies and already budgeted allocation of $200,000 that was included in the recent rate increase for needed vehicle replacements. A budget transfer from Wastewater Fund 18 to the Vehicle Replacement Fund 72 of $500,000 is required for the purchase of the Wastewater Vac Con.
The PD Utility Explorer totaled in the accident is anticipated to be reimbursed by insurance and when this money is received Fund 72 will be reimbursed for this cost.
Total Source of Funds
Vehicle Replacement Fund 72 $ 2,203,400
One-time Transfer from the Wastewater
Fund 18
$ 500,000
Insurance Refund for PD Utility Explorer $ 75,000
Total Source of Funds $ 2,778,400
Total Vehicle Cost
Police Vehicles $ 611,000
Public Works Field Services Vehicles $ 686,000
Public Works Wastewater Vehicle $ 625,000
3% Cost Escalation $ 57,660
Total Use of Funds $1,979,660
Estimated End Balance - Fund 72 $ 798,740
ORIGINATED BY:
Pacifica City Council 6
November 28, 2022
Public Works
ATTACHMENT LIST:
Attachment 1_Vehicle Report(PDF)
Pacifica City Council 7
November 28, 2022
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PACIFICA AMENDING THE FISCAL YEAR 2022-2023 ANNUAL OPERATING AND CAPITAL BUDGET TO INCLUDE
THE PURCHASE OF CITY VEHICLES
WHEREAS, the City Council of the City of Pacifica has held public hearings on June 27, 2022, and June 27, 2022, for consideration and adoption of the Recommended FY 2022-23 Operating and Capital Budget; and
WHEREAS, staff delayed requesting a budget expense from Fund 72 during the FY 22-23 budget process as a Comprehensive Fleet Replacement Schedule (Schedule) was being developed through a consultant; and
WHEREAS, the Comprehensive Fleet Replacement Schedule is now complete and provides recommendations for fleet replacements; and
WHEREAS, the City desires to purchase vehicles from the Vehicle Replacement Fund 72 for immediate urgent needs; and
WHEREAS, sufficient funds are available in the Vehicle Replacement Fund 72 for this purpose;
NOW, THEREFORE, THE CITY COUNCIL HEREBY RESOLVES:
The City Council of the City of Pacifica hereby approves the purchase of City Vehicles from the Vehicle Replacement Fund 72 for a total of up to $1,979,660 including a 3% cost escalation factor, and amends FY 2022-23 budget to appropriate $1,979,660 from the Vehicle Replacement Fund available fund balance and transfer $500,000 from the Wastewater Fund 18 to the Vehicle Replacement Fund 72 for vehicle equipment purchases related to wastewater operations.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Pacifica, California, held on the 28th day of November 2022.
AYES, Councilmembers:
NOES, Councilmembers:
ABSENT, Councilmembers:
ABSTAIN, Councilmembers:
Mary Bier, Mayor
ATTEST: APPROVED AS TO FORM:
______________________________ ______________________________ Sarah Coffey, City Clerk Michelle Kenyon, City Attorney