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Home My WebLink AboutItem 5h. Authorization to issue letters of intent for vehicle purchases and a Sewer Hydro Cleaner Item 5h Department: Public Works Cost Center: 5008 For Agenda of: 11/16/2021 Placement: Consent Estimated Time: N/A FROM: Matt Horn, Public Works Director Prepared By: Greg Cruce, Deputy Director of Maintenance Operations; Dave Hix, Deputy Director of Wastewater; Aleah Bergam, Utilities Business Manager SUBJECT: AUTHORIZATION TO ISSUE LETTERS OF INTENT FOR VEHICLE PURCHASES AND APPROVE PURCHASE OF SEWER HYDRO CLEANER RECOMMENDATION 1. Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, authorizing staff to issue Letters of Intent for Vehicle Purchases” with budget appropriation in future Fiscal Years due to length of estimated manufacturing times; and 2. Authorize staff to move forward with the purchase of a Sewer Hydro Cleaner from Haaker Equipment Company, using the Sourcewell Cooperative Purchasing Agreement; and 3. Adopt a Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, amending the FY 2021-22 Budget Appropriation” to authorize the budget appropriation of $495,000 from the City’s Sewer Fund working capital balance into the FY 2021-22 budget. DISCUSSION Background Letters of Intent for Vehicle Purchases Due to the pandemic, global supply chains have been severely impacted, which has resulted in unprecedented lead times for parts and equipment. Current vehicle builds are taking up to 12 months to deliver once a contract is signed. Staff is recommending Council authorize staff to issue “letters of intent” for vehicle purchases approved in the 2021-23 Financial Plan (Attachment A). Attachment B includes a list of vehicles that could qualify for pre-authorization via this process. Should the supply chain conditions remain the same one year from now, staff will return to Council to provide a recommendation on how to handle the purchase of vehicles scheduled outside of the two-year Financial Plan. Page 71 of 387 Item 5h Sewer Hydro Cleaner The Wastewater Collection Program (WWC) within the Utilities Department is responsible for maintenance and operation of the City’s wastewater collection system. The Wastewater Collection program utilizes Hydro Cleaner Trucks to scour and vacuum sewer lines, maintain lift stations, perform hydro excavations for repairs and respond to spills. The Hydro Cleaners are essential for the maintenance and operation of the system and to comply with the State regulations. The Wastewater Collection Program operates two Hydro Cleaner trucks that are dedicated to the sewer system. Truck 0718 is scheduled for replacement in year two (FY 22-23) of the 2021-23 Financial Plan. Beginning in January 2022, the older of the two trucks, 0718, will be severely limited in its operational time due to the emissions requirements from the California Air Resources Board (CARB). These requirements limit 0718’s operating hours to a maximum of 200 hours a year, resulting in only one Hydro Cleaner being available for day-to-day maintenance activities. If the newer, CARB compliant, Hydro Cleaner is down for maintenance or repairs for an extended period of time, City staff will have to severely minimize critical maintenance activities and reserve 0718 for response to spills and emergencies. Having two fully operating Hydro Cleaners is essential to the compliant and efficient operation of the City’s Wastewater Collection System. The manufacturing and delivery of Sewer Hydro Cleaning Trucks have also been affected by the supply chain issues, with current builds taking up to approximately 12 months to deliver once a contract is signed. Staff is recommending Council appropriate $495,000 from the City’s Sewer Fund working capital balance into the FY 2021-22 budget to begin the process now of purchasing the Sewer Hydro Cleaner in FY 2021-22 instead of FY 2022-23. The Sewer Fund has approximately $18.7 million in unreserved working capital to advance the vehicle purchase. Attachment C will appropriate a budget of $495,000 for the Hydro Cleaner Vehicle from the Sewer Fund’s working capital balance. Advancing the funding will allow the City to take delivery of the equipment should the manufacture have the ability to deliver the unit sooner than anticipated. Sourcewell Cooperative Purchasing Agreement Haaker Equipment Company represents the Vactor brand of Hydro Cleaners which staff have thoroughly vetted for its ability to meet the Wastewater Collection section’s needs, its ease of use, effectiveness of cleaning and vacuuming technology and durability. The City’s Fleet Maintenance supervisor believes the Vactor Hydro Cleaner to be an excellent Hydro Cleaner with responsive service support from Haaker Equipment Company. The proposal provided by Haaker Equipment Company for this equipment was quoted using the Sourcewell Cooperative Purchasing Agreement, which guarantees municipal agencies competitive bids on proposed equipment. The discount for the Sourcewell contract is listed as $9,661. Page 72 of 387 Item 5h Previous Council or Advisory Body Action On June 1, 2021 Council approved a resolution approving the 2021-23 Financial Plan and Fiscal Year 2021-22 Budget (R-11251). The Sewer Hydro Cleaner was identified in the 2021-23 Financial Plan and budgeted for replacement in 2022-23. Policy Context As set forth in the City Charter, the Council may amend or supplement the budget at any time after its adoption by majority vote of the Council members. Staff was unable to solicit three bids for this equipment due the manufacturer only having only one representative in this region of the state. However, the quote provided was priced using a cooperative purchasing agreement which complies with the City’s P urchasing Policy. Public Engagement Public comment on the item can be provided to the City Council through written correspondence prior to the meeting and through public testimony at the meeting. CONCURRENCE The Finance Department and Utilities Department concur with this report. ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended actions in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: No Budget Year: 2021-22 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ $ $ $ State Federal Fees Sewer Fund $495,000 Total $495,000 $ $ Authorizing Letters of Intent for Purchase Page 73 of 387 Item 5h The City prepares a two-year Financial Plan and appropriates a one‐year budget. The Capital Improvement Plan within looks at a five-year window for projects and IT and fleet replacements. Approving this request will obligate the City, and Council to commit the budget for these vehicles and proceed with the appropriation when the Budget Supplement is reviewed for approval in June 2022. This action does not advance the funding but commits the appropriation ahead of the traditional budget schedule. Sewer Hydro Cleaner Vehicle In the 2021-23 Financial Plan $475,000 was identified for the purchase of a Sewer Hydro Cleaner vehicle (Project #1000521-03) in year two. The manufacturer’s quote for this vehicle is $484,300.72. Staff is recommending that $20,000 be added to the budget of this project, and the full budget be appropriated now. The Sewer Fund has approximately $18.7 million in unreserved working capital to advance the vehicle purchase. Attachment C will appropriate a budget of $495,000 for the Hydro Cleaner Vehicle from the Sewer Fund’s working capital balance. ALTERNATIVES 1. Do not authorize staff to submit letters of intent for vehicle purchases. Council could choose to wait for the fiscal year that the vehicles have been budgeted before ordering. Not authorizing letters of intent will likely result in many important vehicles being delayed by up to a year, with subsequent inefficiencies because of vehicle age, additional maintenance, and regulatory requirements. Waiting may also result in possible higher purchase costs. 2. Do not authorize the budget appropriation to advance the Sewer Hydro Cleaner vehicle purchase. This is not recommended as having two operating Hydro Cleaners is essential to the compliant and efficient operation of the City’s Wastewater Collection System. ATTACHMENTS A – Draft Resolution authorizing Staff to issue Letters of Intent for Vehicle Purchases B – Vehicles Budgeted in FY 2022-23 C – Draft Resolution amending the FY 2021-22 Budget Appropriations Page 74 of 387 R ______ RESOLUTION NO. _____ (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING STAFF TO ISSUE LETTERS OF INTENT FOR VEHICLE PURCHASES WHEREAS, in accordance with the San Luis Obispo City Charter Section 802, the City Manager submitted the 2021-23 Financial Plan to Council for its review and consideration on June 1, 2021; and WHEREAS, on June 1, 2021, the Council adopted Resolution No. 11251 (2021 Series), which approved and appropriated the 2021-22 budget allocation including operating, debt service, and capital improvement plan budget; and WHEREAS, the budget for FY 2022-23 has not yet been appropriated; and WHEREAS, the budget for FY 2022-23 includes a list of Fleet replacement; and WHEREAS, current estimates for vehicle delivery range from six to eleven months from initial bid acceptance; and WHEREAS, if staff waits until July 1, 2022 to order vehicles that were budgeted in FY 2022-23, the City will likely not receive the vehicle until the following fiscal year; and WHEREAS, maintaining the City’s fleet is essential to operating programs that ensure the City of San Luis Obispo’s residents are healthy and safe. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: Page 75 of 387 Resolution No. _____ (2021 Series) Page 2 R ______ SECTION 1. Council authorizes staff to submit letters of intent for vehicle purchases with estimated delivery times in the Fiscal Year the budget is planned to be appropriated. Upon motion of ___________, seconded by ____________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2021. ___________________________ Mayor Erica A. Stewart ATTEST: _________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: _________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk Page 76 of 387 Attachment B – Vehicles Budgeted in FY 2022-23 Project Funding source FY 2022-23 Planned Budget 1000554-04 - Fire Heavy Duty Truck (Type 3 Wildland) LRM G20 $415,000 1000554-05 - Fire Compact Truck LRM G20 $50,000 1000553-01 - Police Patrol Hybrid SUV (2 Vehicles per Year)) LRM G20 $130,000 1000553-03 - Police Motorcycles LRM G20 $40,000 1000553-05 - Police Investigations SUV LRM G20 $65,000 1000518-01 - Building & Safety SUV (#0129, <> Chevy Bolt EV) Capital Outlay $37,000 1000520-09 - Parking 1/2 ton Pickup (0813) Parking Fund $55,000 1000520-17 - Parking Scooters (1403,1404 Go-4's) Parking Fund $75,000 1000521-15 - Water Distribution Trailer (0235) Water Fund $15,000 1000521-03 - Sewer Hydrocleaner (0718) Sewer Fund $475,000 1000521-04 - Sewer WWCL Tilt-Trailer (0616) Sewer Fund $30,000 1000521-17 - Whale Rock Trailer (0417) Whale Rock Fund $15,000 1000520-14 - Facilities Maintenance 3/4 ton Pickup with Utility Bed (0612) LRM G20 $60,000 1000520-05 - Park Maintenance Tractor (0218) LRM G20 $75,000 1000520-10 - Parks Maintenance Trailers (0007, 9405) LRM G20 $10,000 1000520-11 - Parks Maintenance Trailer (9915) LRM G20 $8,000 1000520-16 - Parks Maintenance Trailer (0320) LRM G20 $15,000 1000519-06 - Parks and Recreation Minivan (0802) LRM G20 $48,000 1000519-09 - Parks and Rec Ranger Truck, F350 HD Towing LRM G20 $55,000 1000505-01 - Bus Replacements with EV Transit Fund $1,910,000 1000518-02 - Building & Safety SUV (NEW <> Chevy Bolt EV) Capital Outlay $37,000 Page 77 of 387 Page 78 of 387 R ______ RESOLUTION NO. _____ (2021 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AMENDING THE FY 2021-22 BUDGET APPROPRIATION WHEREAS, in accordance with the San Luis Obispo City Charter Section 802, the City Manager submitted the 2021-23 Financial Plan to Council for its review and consideration on June 1, 2021; and WHEREAS, on June 1, 2021, the Council adopted Resolution No. 11251 (2021 Series), which approved the Financial Plan and appropriated the 2021-22 budget allocation including operating, debt service, and capital improvement plan budget; and WHEREAS, the budget for FY 2022-23 includes the purchase of a Sewer Hydro Cleaner vehicle (Project #1000521-03); and WHEREAS, beginning in January 2022, the older of the City’s two Sewer Hydro Cleaner trucks, 0718, will be severely limited in its operational time due to the emissions requirements from the California Air Resources Board (CARB); and WHEREAS, the manufacturer’s quote for this vehicle is higher than the $475,000 identified in the Financial Plan for the vehicle purchase; and WHEREAS, having two operating Hydro Cleaners is essential to the compliant and efficient operation of the City’s Wastewater Collection System. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: Page 79 of 387 Resolution No. _____ (2021 Series) Page 2 R ______ SECTION 1. The 2021-22 budget will be amended to appropriate $495,000 of the City’s Sewer Fund working capital balance into operating budget and advance the Sewer Hydro Cleaner vehicle (Project #1000521-03) purchase to FY 2021-22. SECTION 2. The 2022-23 Supplement will be adjusted to reflect the advancement of the purchase by eliminating the fleet replacement from the budget request. Upon motion of ________________, seconded by _______________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _____________________ 2021. ___________________________ Mayor Erica A. Stewart ATTEST: ________________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ________________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk Page 80 of 387