October 18, 2022, Item #12
DATE:
TO:
FROM:
CONTACT:
SUBJECT:
Summary:
AGENDA RE PQ RT City of Poway
October 18, 2022
Honorable Mayor and Mem-~~vf the City Council
Jeff Chumbley, Fire Chief U
Brian Mitchell, Deputy Fire Chief
(858) 668-4462 or [email protected]
CITY COUNCIL
Replacement of Two Type 1 Fire Engines and Appropriation of Funds Annually, as part of the City's Capital Replacement program, the City collects "rent" to be used to cover the eventual replacement costs of City vehicles and equipment. The Capital Replacement Budget includes funding for the purchase and replacement of two aging Type 1 fire engines. The two fire engines will be placed into frontline service at Fire Stations 2 and 3. It is recommended the City Council approve the purchase of two Type 1 fire engines to be manufactured by South Coast Fire Equipm~nt, Inc. The total estimated purchase price for the vehicles, sales tax, performance bond, California tire fee, and documentation fees are $1,912,659.82 as outlined in Attachment B. This price includes a prepayment discount of $85,120 and an additional discount of $10,000 for the purchase of two fire engines. The request for funds to replace the fire engines does not include upfit cost for communication equipment installation. This is due to the need to expedite the purchase of the apparatus to avoid a 6% cost increase on November 1, 2022. The purchase of the fire engines prior to November 1, 2022, will avoid a cost increase of $119,999.26. Funds for the installation of communication equipment will be funded through the normal budgeting process. Due to demand, as well as supply chain issues, it is anticipated the City will not receive delivery of the vehicles until 2025.
Recommended Action:
It is recommended the City Council adopt a resolution appropriating funds for the purchase two Type 1 fire engines for a total estimated cost of $1,912,659.82 and authorize the City Manager to execute any necessary documents.
Discussion:
The City currently maintains three frontline and two reserve Type 1 fire engines. The City's vehicle maintenance program plans for fire engines to be operated in frontline service for 15 years. The current frontline fire engines were constructed in 2006, 2010, and 2014. The current 2006 fire engine has already exceeded its recommended frontline use. Replacement of the 2010 fire engine will meet the City's vehicle maintenance program 15 year recommended frontline use due to the extended build 1 of 5
October 18, 2022, Item #12
time of three years. The current reserve fire engines were both constructed in 2002 and are utilized to support the frontline apparatus during maintenance and repairs, with the added capabilities of upstaffing resources during significant fire weather events. The current reserve apparatus will be replaced by the 2006 and 2010 frontline fire engines. Maintaining the scheduled service life of the City's fleet of emergency vehicles ensures emergency response readiness and minimizes the impact of scheduled vehicle maintenance activities and unplanned repairs. In 2010 and 2014, the City purchased Type 1 fire engines from Southcoast Fire Equipment Inc. using the specifications of the existing fleet. These fire engines have performed well. Standardization of apparatus streamlines maintenance and repair efforts and maximizes training and operational efficiencies for firefighting personnel.
After careful evaluation of various purchasing options and pricing, staff determined it is in the best interest of the City not to proceed with its own formal bid process and recommends the formal bidding procedures are waived for the following reasons:
1. The City has been purchasing Pierce fire apparatus from Southcoast Fire Equipment Inc. (the primary vendor for Pierce) for over 15 years, historically using other agencies' cooperative agreements that were competitively bid, which has allowed the Fire Department to achieve maintenance and operational efficiencies as previously described;
2. The requirement of Poway Municipal Code Chapter 3.28 to formally bid this purchase will not likely result in a lower price given staffs historical experience; and
3. Entering into a contract with Southcoast Fire Equipment Inc. prior to November 1, 2022, will save Poway resident tax dollars through cost avoidance (i.e., not becoming subject to the 6% increase, as well as future unknown increases).
Environmental Review:
This action is not subject to California Environmental Quality Act.
Fiscal Impact:
In an ongoing effort to maximize frontline use of existing assets, the Fiscal Year 2022-23 did not include funds to replace a Type 1 fire engine. However, given the extended lead time to build the vehicle and the price increase of 6% (i.e., $119,999.26) on November 1, 2022, the purchase is being recommended now. A second Type 1 fire engine not currently due for replacement is also being recommended for replacement now due to additional projected cost increases and the three-year lead time to get the Type 1 fire engines. If the City waits to purchase the second Type 1 fire engine, it is projected to cost between $180,000 and $225,000 more. The projected cost increases outstrip the interest earning ability of the City. Therefore, avoiding the cost increases provides the most benefit to the City.
The total cost of two Type 1 fire engines is $1,912,659.82. A total of $1,347,935.74 has been collected in replacement rental charges for two Type 1 fire engines. An additional $564,724.08 is requested to fund the difference. When sufficient funds have not been set aside through the City's asset management replacement charges, the requesting department funds the difference. This helps ensure the financial sustainability of the replacement funds. Future years' asset management replacement charges will be based on the new purchase price and will begin being collected next year.
As such, staff requests Council authorization to appropriate $1,347,935.74 to 115010-61040 (Capital Equipment Replacement -Autos & Trucks) and $564,724.08 to 501050-61040 (Fire Suppression - 2 of 5
October 18, 2022, Item #12
Autos & Trucks), $1,912,659.82 in total, for the purchase of two Type 1 fire engines. Funding is available in the Capital Replacement Equipment Fund (Fund 6110) and General Fund Unassigned Fund Balance (Fund 1000) for the purchase of the Type 1 fire engines.
Public Notification:
None.
Attachments:
A. Resolution
B. South Coast Fire Equipment, Inc. Quote to the City of Poway Reviewed/Approved By:
Assistant City Manager
3 of 5
Reviewed By:
Alan Fenstermacher
City Attorney
Approved By:
Ch(!/!~
City Manager
October 18, 2022, Item #12
RESOLUTION NO. 22-
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
POWAY, CALIFORNIA, AUTHORIZING THE CITY MANAGER TO
EXECUTE A PURCHASE AGREEMENT FOR TWO NEW TYPE 1
FIRE ENGINES AND AN APPROPRIATION OF FUNDS
WHEREAS, the City proactively plans for the replacement of two Type 1 fire engines by setting aside monies in the Capital Replacement Equipment Fund (Fund 6110) each year; WHEREAS, the purchase of two Type 1 fire engines from South Coast Fire Equipment, Inc. prior to November 1, 2022 will result in a 6% savings totaling approximately $119,999.26; WHEREAS, the cost of the two Type 1 fire engines is approximately $1,912,659.82, inclusive of the discount;
WHEREAS, a total of $1,347,935.74 is available in the Capital Replacement Equipment Fund (Fund 6110) for the purchase of two Type 1 fire engines; which is $564,724.08 less than required due to equipment costs increasing faster than projected; WHEREAS, the City ensures the financial sustainability of the Capital Replacement Fund by having the department fund the difference.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Poway as follows:
SECTION 1: The City Council authorizes an appropriation of $1,347,935.74 to the Capital Equipment Replacement account 115010-61040 and $564,724.08, from the General Fund Unassigned Fund Balance (Fund 1000), to the Fire Suppression account 501050-61040 for the purchase of two Type 1 fire engines.
PASSED, ADOPTED AND APPROVED at a Regular Meeting of the City Council of the City of Poway, California on the 18th day of October, 2022 by the following vote, to wit:
AYES:
NOES:
ABSENT:
DISQUALIFIED:
Steve Vaus, Mayor
ATTEST:
Carrie Gallagher, City Clerk
4 ofS ATTACHMENT A
October 18, 2022, Item #12
SOUT~OAST
CITY OF POWAY FIRE DEPARTMENT
100% Pre-Payment Option
September 28, 2022
If a 100% pre-payment were made at contract signing, the following discount would be applied to the final invoice:
Each Extension
Two ( 2 ) Arrow XT Pierce's Ultimate Configuration
(PUC) per the enclosed proposal for
delivery sum of $ 926,933.00 $ 1,853,866.00
100% Prepayment Discount $ (42,560.00) $ (85,120.00)
APPARATUS COST $ 884,373.00 $ 1,768,746.00
Sales Tax@ 7.750% $ 68,538.91 $ 137,077.82
Performance Bond $ 2,404.00 $ 4,808.00
Consortium Fee HGAC Fee $ 2,000.00 $ 2,000.00
California Tire Fee $ 14.00 $ 28.00
TOTAL PREPAY PURCHASE PRICE $ 957,329.91 $ 1,912,659.82 Less 100% pre-payment at Contract Signing $ 957,329.91 $ 1,912,659.82 BALANCE DUE AT DELIVERY $0.00 $0.00
! 100% PRE-PAYMENT biscoON1 SHOWN ABOVE Is AVAILABLE IN two WAYS:
a) If your department makes a 100% cash pre-payment at contract signing. b) If your department signs up for a lease-purchase with Pierce Financial Solutions. This would require no money down and no payments for one (1) year if desired. * Discount for the 100% pre-payment option includes discounts for the chassis, interest, aerial (if applicable), and flooring charges.
* Any item added after this option is elected will come at additional cost and will be added to the final invoice.
5 ofS ATTACHMENT B