City Council Memorandum
TO: HONORABLE MAYOR AND CITY COUNCIL DATE: FEBRUARY 14, 2023 FROM: POLICE DEPARTMENT WARDS: ALL
SUBJECT: SUPPORT BY THE HOUR AGREEMENT FOR COMPLETE ENGINE MAINTENANCE WITH SAFRAN HELICOPTER ENGINES USA, INC. FOR TWO SAFRAN HELICOPTER GAS TURBINE ARRIEL 2D ENGINES FOR A TERM BEGINNING UPON RECEIPT OF THE TWO AIRBUS H125 HELICOPTERS AND ENDING DECEMBER 31, 2028, IN THE AMOUNT OF $2,079,330 PLUS A 10% CHANGE ORDER AUTHORITY FOR A TOTAL AMOUNT OF $2,287,263 ISSUES:
Approve the Support by the Hour Agreement for Complete Engine Maintenance with Safran Helicopter Engines USA, Inc., of Grand Prairie, Texas, for two Safran helicopter gas turbine arriel 2D engines for a term beginning upon receipt of the two Airbus H125 Helicopters and ending December 31, 2028, in the amount of $2,079,330 plus a 10% change order authority for a total amount of $2,287,263.
RECOMMENDATIONS:
That the City Council:
Approve the Support by the Hour Agreement for Complete Engine Maintenance with Safran Helicopter Engines USA, Inc., of Grand Prairie, Texas, for two Safran helicopter gas turbine arriel 2D engines for a term beginning upon receipt of the two Airbus H125 Helicopters and ending December 31, 2028, in the amount of $2,079,330; Authorize change order authority in the amount of 10%, or $207,933, in the event that each of the new Airbus H125 Helicopters reach more than 800 hours of flight time per year or 1200 cycles per year; and Authorize the City Manager, or designee, to execute the Support by the Hour Agreement for complete engine maintenance with Safran Helicopter Engines USA, Inc. including making any minor and non-substantial changes.
BACKGROUND:
On November 16, 2021, the City Council unanimously voted to approve the purchase of two Airbus H125 Helicopters in the estimated amount of $10,777,070 plus applicable tax from Measure Z funds utilizing capital lease financing. On December 14, 2021, the City Council approved the Purchasing Agreement and a purchase order with Airbus Helicopters, Inc. of Grand Prairie Texas, in the amount of $10,137,070 plus tax.
The Police Department anticipates taking possession of the two Airbus H125 Helicopters between March and June of 2023. The Helicopters will require routine maintenance as required by the Federal Aviation Administration (FAA). Maintenance is based on the number of hours each helicopter is flown. Among other regularly scheduled maintenance, each helicopter is required to undergo a minor engine overhaul once they reach 2500 flight hours and a major engine overhaul once they reach 5000 flight hours. It is anticipated that the H125 helicopters will reach these milestones within the term of the proposed Support by the Hour Agreement (Agreement).
DISCUSSION:
Safran Helicopter Engines USA, Inc. (Safran) is the manufacturer of the engines used in the two Airbus H125 helicopters purchased by the City of Riverside. Safran offers a complete engine maintenance service program for the helicopter engines. In accordance with the program, the City of Riverside would pay a fixed cost per flight hour and a fixed cost per cycle for each helicopter and in return Safran would cover all repair and maintenance service parts and labor costs. This includes the minor overhaul of each engine, which is an estimated cost $600,000 per engine and the major overhaul of each engine, which is an estimated cost of $700,000 per engine. These costs are estimates and are based on recent services completed for other local agencies. The program would also cover any unexpected maintenance or repairs required for the helicopters over the program term. The overhaul costs alone would equal approximately $2.6 million.
Over the term of the proposed Agreement, the total cost of the program would be approximately $2,200,909.52 and is based on an average of 800 hours per helicopter per year and 1200 cycles per helicopter per year. The estimated cost is broken down as follows:
Description
FY22-23
FY23-24
FY24-25
FY25-26
FY26-27
FY27-28
FY28-29
Helicopter 1
$46,804
$145,531
$183,493
$188,997
$194,668
$200,508
$101,735
Helicopter 2
$11,701
$142,518
$177,467
$188,998
$194,667
$200,508
$101,735
Sub Total:
$2,079,330
10% Change Order Authority
$207,933
Total:
$2,287,263
The cost may vary as the City will be invoiced based on actual flight hours and cycles. Therefore, the Department is requesting a 10% change order authority in the event that either or both helicopters fly more than 800 hours per year or cycle more than 1200 times per year causing the program cost to increase.
Upon expiration or early termination of the Agreement, the Department can either leave any remaining funds with Safran, whereby, Safran will continue to perform repairs and maintenance on the helicopters until all funds are exhausted or the Department can request the balance be returned at a prorated rate as described in Appendix F of the Agreement.
For these reasons, the City has determined that Safran Helicopter Engines USA meets the requirements of Purchasing Resolution 23914, Section 702 (e) Acquisition of Services, which states that, “Competitive Procurement through the Informal Procurement or Formal Procurement process shall not be required in any of the following circumstances: ….(e) When the Procurement consists of services needed for the replacement parts for the City’s vehicles and aviation units and other motorized Fleet related equipment”.
The Purchasing Manger concurs that the recommended action is compliant with the Purchasing Resolution 23914, Section 702 (e).
STRATEGIC PLAN ALIGNMENT:
This item contributes to Strategic Priority No. 2 Community Well-Being and Goal No. 2.6 - Strengthen community preparedness for emergencies to ensure effective response and recovery.
This item aligns with EACH of the five Cross-Cutting Threads as follows:
Community Trust – The proposed Agreement will ensure the two new Airbus H125 helicopters meet all FAA maintenance requirements and supports the RPD Aviation Units primary purpose to provide aerial support for ground operations in observing, preventing, and interdicting criminal activity. It will provide a more reliable aerial support and will serve the public interest, benefit the City’s diverse community, and result in greater public good.
Equity – The RPD provides public safety services to all residents in the City of Riverside with the support of the Aviation Unit. The proposed Agreement will help to ensure that the helicopters remain consistently in use and guarantee more timely and reliable aerial support to every member of the community when needed.
Fiscal Responsibility – The proposed Agreement will regulate maintenance costs for the two Airbus H125 helicopter engines and help the City avoid unexpected and large costs that can be associated with maintenance and repair of the helicopter engines.
Innovation – The proposed Agreement will ensure the helicopters remain consistently in use which will allow RPD to be inventive and timely in meeting the community’s changing needs by providing the Aviation Unit with more reliable aerial support.
Sustainability & Resiliency – The proposed Agreement will ensure the new helicopter engines are properly maintained and will keep maintenance costs within budget allowing RPD to better meet the needs of the present without compromising the needs of the future.
FISCAL IMPACT:
The total fiscal impact of this action is $2,079,330 over a term of the contract beginning upon delivery of the two Airbus H125 Helicopters and ending on December 31, 2028, and a 10% change order authority in the amount of $207,933. Sufficient funds for both helicopters for FY 2022/23 in the estimated amount, not to exceed, $58,504.90 are budgeted and available in the General Fund, Police Aviation, Non-Stock Inventory Account No. 3120000-424210. Funds for future fiscal years will be budgeted during the budget development process for those fiscal years.
Prepared by: Larry V. Gonzalez, Chief of Police
Certified as to
availability of funds: Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/City Treasurer Approved by: Mike Futrell, City Manager
Approved as to form: Phaedra A. Norton, City Attorney
Attachment: Support by the Hour Agreement
Helicopter Engine Maintenance ProgramPage 1