City Council
Staff Report
From: City Manager
Report Type: CONSENT CALENDAR
Lead Department: Public Works
Meeting Date: March 3, 2025
Report #:2408-3343
TITLE
Approval of a Purchase Order with Professional Sales and Service, L.C. in the Not-to-Exceed Amount of $429,213, Including an Approximate 5% Contingency in the Amount of $20,439 for Unforeseen Price Increases, for the Purchase of a 2024 Chevrolet G4500 Type III Ambulance Utilizing a Cooperative Purchase Agreement, Funded by Capital Improvement Program Project VR-23000; CEQA Status –Not a Project
RECOMMENDATION
Staff recommends that Council approve and authorize the City Manager or their designee to execute a purchase order with Professional Sales and Service, L.C. in the Not-to-Exceed Amount of $429,213, including an approximate 5% contingency in the amount of $20,439 for unforeseen price increases, for the purchase of a 2024 Chevrolet G4500 Type III Ambulance utilizing cooperative purchase agreement number 122123 between REV Group, Inc. and Sourcewell, a cooperative purchasing agency serving government and not-for-profit organizations.
BACKGROUND
The Vehicle and Equipment Use, Maintenance, and Replacement policy section 4-1 provides for the on-going replacement of City fleet vehicles and equipment. Replacements are scheduled using guidelines based on age, mileage accumulation, and obsolescence. Policy 4-1 prescribes a replacement interval for ambulances of five years or 85,000 miles.
The City’s ambulance fleet consists of six ambulances. The Fire Department operates three full- time ambulances at Fire Stations 1, 2, and 4 and supports them with three reserve ambulances at the same locations. This minimizes the downtime when a frontline ambulance needs repair or regular scheduled maintenance. It also allows the department to upstaff any of the three reserve ambulances for special events.
The purchase of this gasoline-engine vehicle was initially approved by Council on November 28,
2022 under the Fiscal Year 2023 Scheduled Vehicle and Equipment Replacement Capital Improvement Program project VR-230001. Following additional internal discussion regarding the City's broader fleet electrification goals, staff postponed the purchase of this vehicle to allow time for additional research into the feasibility, availability, and performance of electric- powered ambulances.
ANALYSIS
The Fire Department has researched the current state of electric ambulance technology and availability and concluded that none of the three major domestic ambulance providers have begun the transition to electric vehicles (EVs). Each of these providers expressed a desire to electrify their fleets and acknowledged the potential benefits of such transition while agreeing that current options for electric ambulances do not meet industry standards.
Fire Department’s research concluded that while the industry is moving towards more sustainable options, the unique demands of ambulance services — particularly those related to vehicle range, weight, and power for critical life-saving equipment — present significant challenges that remain unsolved. These challenges have not been satisfactorily addressed by the current market offerings, requiring Fire Department to continue monitoring advancements in EV technology while seeking immediate solutions to maintain Fire Department’s fleet reliability and service levels. Although the direction is promising, the mainstream industry adoption of EV ambulances, given the current technology limitations, appears to be approximately three years away.
After Fire Department presented its findings, staff determined to proceed with purchasing the original gasoline engine ambulance previously approved by Council. Once the purchase order is placed with the vendor, staff anticipates a 16-month lead-time to procure and fully outfit the new ambulance before it can be placed into service.
The current ambulance, Unit 6047, a 2012 Chevrolet G4500 M67, has surpassed its recommended lifecycle, both in age and mileage, with 96,390 miles on the odometer. Over its 13-year service period, the City has incurred significant maintenance costs, totaling approximately $229,130 in repair parts and labor. These expenses, coupled with the vehicle's age and high mileage, have led to increased downtime and reduced reliability, which is critical for emergency response services. Additionally, the Fire Department has experienced a 5.6% increase in ambulance transport calls between Fiscal Year 2022 and the estimated number of calls for service in Fiscal Year 2025, further straining the aging fleet. Replacing Unit 6047 is essential to maintain the City's emergency response capabilities, ensure fleet reliability, and reduce ongoing maintenance costs associated with an outdated vehicle. 1 City Council, November 28, 2022; Agenda Item #7; SR#14702, https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/public-services/fleet/staff-report-14702.pdf Procurement Process
Section 2.30.360 (j) of the Palo Alto Municipal Code allows the use of cooperative purchasing agreements in lieu of conducting a competitive solicitation. Bids (quotes) for this purchase were obtained through Sourcewell (formerly known as the National Joint Powers Alliance), which is a cooperative purchasing agency serving government, higher education, K-12 education, not- for- profit, tribal government, and other public agencies.
The City requested an updated quote from Professional Sales and Service, L.C. on October 30, 2024. The quote was received on October 30, 2024 (Attachment A). Staff recommends that Council approve the purchase order with Professional Sales and Service, L.C. (Attachment B) for the 2024 Chevy G4500 Type III ambulance described in this report via the cooperative purchase agreement with Sourcewell2. The purchase order version provided in Attachment B has been reduced for printing purposes and is not the full contract with all exhibits.
FISCAL/RESOURCE IMPACT
Funding to replace this ambulance has been collected over the life of the vehicle through the annual vehicle replacement allocation charged to the Fire Department. The funding for this replacement was approved as part of the Fiscal Year 2023 Adopted Capital Budget and is available in the Fiscal Year 2023 Scheduled Vehicle and Equipment Replacement Capital Improvement Program project (VR-23000). The two-year pause in placing an order for this ambulance has resulted in a price increase of $51,387. Though the updated quote of the ambulance ($429,213) is 13.6% higher than the original quote ($377,826), the use of contingency when planning the annual budgets for vehicle replacement fund has allowed enough funding in VR-23000 to absorb this price increase.
Approval of the 5% contingency is important given continuing uncertainty in pricing. The contingency allows staff to proceed with the purchase without having to return to Council for authorization in the event of a minor price increase.
STAKEHOLDER ENGAGEMENT
Requests for vehicle replacements are presented to the Fleet Review Committee (FRC) for approval. FRC approved the replacement of this vehicle through the scheduled five-year replacement review as part of the development of the Fiscal Year 2023 Capital Budget.
2 Cooperative Purchase Agreement with Sourcewell and Professional Sales and Service, L.C.; https://www.cityofpaloalto.org/files/assets/public/v/1/public-works/public-services/contracts/rev-group-contract- 122123.pdf
ENVIRONMENTAL REVIEW
Council action on this item is not a project as defined by CEQA because the purchase of a new fleet vehicle is a continuing administrative or maintenance activity. CEQA Guidelines section 15378(b)(2).
ATTACHMENTS
Attachment A: Quote
Attachment B: Purchase Order
APPROVED BY:
Brad Eggleston, Director Public Works/City Engineer