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HomeMy WebLinkAboutItem 5i. Approve the Sole Source purchase of a 2022 Pierce Arrow Type 1 Pumping Fire Engine to replace Engine No. 4 Item 5i Department: Fire Cost Center: 402-5008 For Agenda of: 8/15/2023 Placement: Consent Estimated Time: N/A FROM: Todd Tuggle, Fire Chief Prepared By: Nicole Vert, Administrative Analyst SUBJECT: APPROVE THE SOLE SOURCE PURCHASE OF FIRE ENGINE 4 RECOMMENDATION Approve the sole source purchase of a 2022 Pierce Arrow Type 1 Pumping Fire Engine in the amount of $881,584.76. POLICY CONTEXT 1. The recommended actions are consistent with the City of San Luis Obispo’s Municipal Code, Section 3.24.060 - Sole Source purchasing. The Municipal Code states that regular bid procedures can be waived when the item(s) to be purchased can be obtained from only one vendor or supplier, and when supplies or equipment have been uniformly adopted in the city or otherwise when standardized. (SLMC § 3.24.060(C)(D)). 2. This action is considered a purchase of goods and in compliance with the City of San Luis Obispo’s Municipal Code 3.24.080, which requires Council approval for any purchase in excess of $200,000. DISCUSSION Emergency vehicles are a vital part of the service delivery for the City of San Luis Obispo Fire Department. A fire engine pumper (“fire engine”) has a standard lifespan of 10,000 hours and is staffed with emergency response personnel, tools, and equipment to provide all-hazards emergency services, Through the utilization of an internal apparatus committee, staff developed fire engine specifications that were used to build the pricing for the replacement of Engine 4, a 2014 Pierce Arrow XT Type 1 Pumper. The specifications considered the community’s unique features and sought the best overall fire engine to complement the existing apparatus fleet. The specifications also align with the most recently purchased fire engine, Engine 3, with minor modifications based on experience. The new fire engine provides the same capabilities as the previous engine but with improved safety, efficiency, and reliability resulting in less cost and time associated with repair and maintenance. Page 211 of 261 Item 5i Background Accelerated Replacement As part of the FY 2021-22 Fourth-Quarter Financial Report (Year-End) to Council, staff recommended the acceleration of Engine 4 replacement to ensure a sustainable reserve engine fleet. The replacement was scheduled for FY 2024 -25; however, the current reserve engine has been encountering a higher than an expected number of mechanical issues that jeopardize the availability of a reliable reserve apparatus over the next several years. Additionally, the City is not immune to the supply shortages brought on by the COVID 19 pandemic. Many fleet replacements have been delayed and commitment letters are being issued to ensure delivery from vendors as far out as 18 months in the future. This engine is immediately available through Pierce, which is the City’s standard for fire engines. Council approved this recommendation and funded the replacement. In order to avoid a nearly $60,000 increase, the City authorized a purchase order for the replacement engine in October and Council approval is necessary to finalize the purchase. Sole Source Purchase Recommended Staff recommends a sole source purchase award to South Coast Fire Equipment in the amount of $881,584.76 for the purchase of a 2022 Pierce Arrow Type 1 Pumping Fire Engine. City purchasing regulations allow for sole source purchases when supplies or equipment in use have been uniformly adopted by the City or otherwise standardized. The Pierce fire engine has been the standard apparatus for the City of San Luis Obispo for the last quarter century. South Coast Fire Equipment, the sole provider of Pierce engines in this region (Attachment B), provided the purchasing quote (Attachment C) for the pumper. The quote was good through October 31, 2022, if allowed to expire, without issuing a purchase order the cost would increase by at least 7% or nearly $60,000. The Fire Department has made significant parts, equ ipment, and training investment in maintaining Pierce-manufactured apparatus. Fire fleet already has an inventory of spare parts, filters, and maintenance items specific to the Pierce fire apparatus platform. Additionally, the Fire Department’s Fire Vehicle Mechanic is specially trained to provide maintenance to Pierce manufactured fire apparatus. Previous Council or Advisory Body Action On October 4, 2022, the City Council approved Resolution No. 11367 (2022 Series) authorizing unassigned Local Revenue Measure Fund Balance be allocated to the accelerated replacement of Fire Pumper (Engine 4). On August 21, 2018, the City Council authorized the sole source purchase of a 2018 Pierce Arrow PUC Type 1 Fire Engine. Page 212 of 261 Item 5i Public Engagement This item is a consent item for the August 15, 2023, City Council meeting and will follow all required postings and notifications. The public will have an opportunity to comment on this item at or before the meeting. CONCURRENCE The Finance Department concurs with the Fire Department’s request to sole source the new engine using the current quote from South Coast Fire Equipment. Additionally, after consultation with the previous Finance Director and the fact that the price will increase exponentially, staff was advised that a City Manager Report should be routed to execute a purchase order for the fire engine replacement. This was due to the October 4, 2022 appropriation of needed funding by Council, and the significant cost increases that would be incurred by delaying the issuance of a purchase order. Staff included the details of the purchase commitment in the 1st quarter report that was presented to Council on November 15, 2022. Staff was advised to return to Council with a consent item to affirm this purchase at the next available meeting after the City Manager’s Report approved the purchase (Attachment A). ENVIRONMENTAL REVIEW The California Environmental Quality Act does not apply to the recommended action in this report, because the action does not constitute a “Project” under CEQA Guidelines Sec. 15378. FISCAL IMPACT Budgeted: Yes Budget Year: 2022-23 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $900,000 $881,584.76 $18,415.24 $ State Federal Fees Other: Total $900,000 $881,584.76 $18,415.24 $ Page 213 of 261 Item 5i Council approved advancing the funding for the new engine on October 4, 2022 with Resolution No. 11367 (2022 Series) appropriating unassigned Local Revenue Measure Fund Balance to the accelerated purchase of the new engine. With the appropriated $900,000, the purchase of the engine is fully funded and will not need any financing. The remaining $18,415.24 budget for the a pparatus replacement is needed to fully outfit the vehicle with the necessary communications and agency-specific equipment. Pierce Manufacturing pricing and the corresponding quote from South Coast expired on October 31, 2022 due to the manufacturer's annual price adjustments. Had we allowed quote to expire without committing to a purchase the engine would have increased the cost of the engine by a minimum of $60,000, due to a scheduled 7% cost increase. Anecdotally, SLOFD has confirmed with surrounding agencies that the pricing for similar apparatus now exceeds $1 million. ALTERNATIVES Deny the sole source purchase. This action is not recommended by staff as the funds are approved as part of the budget amendment. Pierce engines, the City’s standard fire engine, is only available through South Coast Fire Equipment that covers the west coast territory. ATTACHMENTS A - City Manager Report - Engine 4 Accelerated Purchase B - Sole Source Verification C - South Coast Quote Page 214 of 261 City of San Luis Obispo, City Manager Report Final City Manager Approval Approver Name Date Approved City Administration GH for DJ 10/25/22 Reviewer Routing List Reviewer Name Date Reviewed Finance NH 10/25/2022 Date: FROM: Keith Aggson, Fire Chief KAA 10/25/2022 PREPARED BY: Nicole Vert, Administrative Analyst SUBJECT: Purchase of Fire Engine RECOMMENDATION 1. Approve the sole source purchase of a 2022 Pierce Arrow Type 1 Pumping Fire Engine in the amount of $881,584.76 and return to Council with a consent item to affirm the purchase at the next available meeting. DISCUSSION Emergency vehicles are a vital part of the service delivery for the City of San Luis Obispo Fire Department. A fire engine pumper (“fire engine”) is staffed with emergency response personnel, tools, and equipment to provide all-hazards emergency services. Through the utilization of an internal apparatus committee, staff developed fire engine specifications that were used to build the pricing for the replacement of Engine 4, a 2014 Pierce Arrow XT Type 1 Pumper. The specifications considered the community’s unique features and sought the best overall fire engine to complement the existing apparatus fleet. The specifications also align with the most recently purchased fire engine, Engine 3 with minor modifications based on experience. The new fire engine provides the same capabilities as the previous engine but with improved safety, efficiency, and reliability resulting in less cost and time associated with repair and maintenance. Background Accelerated Replacement As part of the FY 2021-22 Fourth-Quarter Financial Report (Year-End) F to Council, staff recommended the acceleration of Engine 4 replacement to ensure a sustainable reserve engine fleet. The replacement was currently scheduled for FY 2024-25; however, the aged reserve engine Page 215 of 261 Authorization to sole source purchase Pierce Arrow Fire Engine Page 2 has been encountering more than an expected number of mechanical issues which jeopardizes the availability of a reliable reserve apparatus over the next several years. Additionally, the City is not immune to the supply shortages brought on by the COVID 19 pandemic. Many fleet replacements have been delayed and commitment letters issued to secure delivery up to 18 months in the future. This engine is immediately available through Pierce which is the City’s standard for fire engines. Council approved this recommendation and funded the replacement. Sole Source Purchase Recommended Staff recommends a sole source purchase award to South Coast Fire Equipment in the amount of $881,584.76 for the purchase of a 2022 Pierce Arrow Type 1 Pumping Fire Engine. City purchasing guidelines allow for sole source when supplies or equipment in use have been uniformly adopted by the City or otherwise standardized. The Pierce fire engine has been the standard apparatus for the City of San Luis Obispo for the last quarter century. South Coast Fire Equipment, the sole provider of Pierce engines in this region, is providing the purchasing quote (Attachment A) for the pumper at the base price reflective of a nationally utilized cooperative purchasing agreement. Used as a pricing standard throughout the fire service, this master contract is commonly known as the HGAC, or Houston Galveston Area Council Cooperative Purchasing Agreement. While the City is not purchasing through HGAC, the City’s price for this apparatus is the same as this cooperative purchasing agreement. The quote is only good through October 31, 2022 and the cost is expected to increase by 7%. The Fire Department has made significant parts, equipment, and training investment in maintaining Pierce-manufactured apparatus. Fire fleet already has an inventory of spare parts, filters, and maintenance items specific to the Pierce fire apparatus platform. Additionally, the Fire Department’s Fire Vehicle Mechanic is specially trained to provide maintenance to Pierce manufactured fire apparatus. Staff will return to Council with a consent item to affirm this purchase at the next available meeting. CONCURRENCES The Finance Department concurs with the Fire Department staff to sole source the new engine using the current quote from South Coast Fire Equipment. Additionally, after consultation with the Finance Director and the fact that the price will increase exponentially, staff was advised that a City Manager Report should be routed to execute a purchase order for the fire engine replacement. This was due to the October 4, 2022, appropriation of needed funding by Council, and the significant cost increases that would be incurred by delaying the issuance of a purchase order. Staff will include the details of the purchase commitment in the 1st quarter report that will be presented to Council on November 15, 2022. FISCAL IMPACT Council approved advancing the funding for the new engine on October 4, 2022,, by appropriating unassigned Local Revenue Measure Fund Balance to the accelerated purchase of the new engine. With the appropriated $900,000, the purchase of the engine is currently fully funded and will not need any financing. Page 216 of 261 Authorization to sole source purchase Pierce Arrow Fire Engine Page 3 Pierce Manufacturer pricing and the corresponding quote from South Coast expire on October 31, 2022, due to the manufacturer's annual price adjustments. Allowing the current quote to expire would increase the cost of the engine by a minimum $60,000, due to a scheduled 7% cost increase. Additionally, South Coast is providing a 100% prepayment discount of $36,000. Due to the availability of the funding, staff recommends the full prepayment of the fire engine purchase. Equipment Replacement Fund Project Costs Adopted Budget (FY 2022-23)900,000.00$ Base Unit Cost 847,343.00$ 100% Prepayment Discount (36,700.00)$ Adjusted Base Unit Cost 810,643.00$ Sales Tax (8.75%)70,931.26$ California Tire Fee 10.50$ Cost From Dealer 881,584.76$ Internal Vehicle Assembly Cost 18,415.24$ Total Vehicle/Project Cost 900,000.00$ ALTERNATIVES Deny the sole source purchase. Staff does not recommend this as the funds are approved as part of the budget amendment. Delaying the purchase will jeopardize the reliability of the Fire Department’s reserve apparatus fleet and likely result in significant replacement cost increases due to current market conditions. Pierce engines, the City’s standard fire engine, is only available through South Coast Fire Equipment that covers the west coast territory. ATTACHMENTS A - SLO City Type-1 to Fleet B - Sole Source Approval Memo Page 217 of 261 Page 218 of 261 Page 219 of 261 Page 220 of 261 Page 221 of 261 Page 222 of 261