HomeMy WebLinkAboutItem 6f. Authorize the Fire Department to purchase a Type I Fire Engine Item 6f
Department: Fire
Cost Center: 8506
For Agenda of: 4/15/2025
Placement: Consent
Estimated Time: N/A
FROM: Todd Tuggle, Fire Chief
Prepared By: Nicole Vert, Business Analyst
SUBJECT: AUTHORIZE THE FIRE DEPARTMENT TO ISSUE A PURCHASE ORDER
FOR A TYPE 1 FIRE ENGINE
RECOMMENDATION
1. Issue a purchase order (PO) and seek financing for a sole source purchase of a Type
I Fire Engine in the amount of $1,244,287.76; and
2. Authorize the City Manager to execute the purchase documents.
POLICY CONTEXT
The recommended actions are consistent with the City of San Luis Obispo’s Municipal
Code, Section 3.24.060- Sole source purchasing. The policy 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.
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 f or any purchase in
excess of $200,000.
DISCUSSION
Due to the growth of the City and resulting increased demand for emergency services, an
agreement was made with the developers of Avila Ranch to build a temporary Fire Station
in the development. This partnership ensures that fire protection and emergency
response capabilities keep pace with the City’s expansion. The City’s responsibility for
the station is to purchase a new engine and staff and equip the station.
While the build of the new station is over 2 years away, the lead time for a new engine
from order date to delivery is currently 45-51 months, necessitating placing the order now.
Page 705 of 987
Item 6f
Background
Emergency vehicles are a vital part of the service delivery for the City of San Luis Obispo
Fire Department. The Type-1 fire engine is a critical piece of equipment for rapid response
to all emergencies. 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 purchase of Engine 5.
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 4, with minor modifications
based on experience and evolving emission standards. The new fire apparatus provides
the same capabilities as previous engines but with improved safety, efficiency, and
reliability.
Sole Source Purchase Recommended
Staff recommends a sole source purchase award to South Coast Fire Equipment in the
amount of $1,244,287.76 for the purchase of a 2025 Pierce Enforcer Type 1 Engine Fire
Apparatus. 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 provided the purchasing quote (Attachment A) for the
apparatus as they are the sole provider of Pierce engines in this region (Attachment B).
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.
As discussed more fully in the sole source justification memo (see Attachment B), the
City’s Fire Department has standardized its engines (Pierce), and those engines can be
obtained from only vendor (South Coast Fire Equipment). Therefore, staff’s
recommendation is to dispense with the standard bid procedures of Chapter 3.24,
pursuant to Section 3.24.060(C) and 3.24.060(D), in making this purchase.
Previous Council or Advisory Body Action
On August 15, 2023, the City Council approved the sole source purchase of a Pierce
Arrow Type 1 Pumping Fire Engine.
Page 706 of 987
Item 6f
Public Engagement
This item is a consent item for the April 15, 2025, 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.
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: 2024-25
Funding Identified: Yes
Fiscal Analysis:
Funding
Sources
Total Budget
Available
Current
Funding
Request
Remaining
Balance
Annual
Ongoing
Cost
General Fund $150,000 $ $1,278,406 $285,746
State
Federal
Fees
Other:
Total $150,000 $ $1,278,406 $285,746
On June 6, 2024, Council approved the FY2024-25 supplemental budget allocating
$150,000 for the first lease payment toward the purchase of a new apparatus. The
purchase is on the CIP budget schedule for debt financing over five years through an
external lender to be repaid with interest. Staff will work with Finance to find the best offers
from a variety of lenders to secure most favorable terms. The $285,746 in the above table
represents the estimated annual lease payments for a five-year period, including both
interest and principal.
One option is Pierce’s finance partner, PNC Equipment Finance, who provided several
options in April 2024 (Attachment C). The quote was provided a year ago and interest
rates have been reduced since then; when updated terms are provided, it is expected
rates will be lower. Terms from PNC were a three-year payment option with annual
payments or a five-year payment option with annual payments. Payments would begin in
Year 2 for each, but interest would begin accruing from the start. The table below shows
what estimated payments would be if the interest rates offered are 4.69% and 4.66%.
Page 707 of 987
Item 6f
The total cost of the Engine would increase by $122,784.11 for a three-year term or
$184,445.70 for a five-year term. Should rates change prior to closing the amounts will
change, but rates are fixed at closing. The estimated delivery is not contingent on the
payment plan.
ALTERNATIVES
1. Deny the sole source purchase. Pierce engines, the City’s standard fire engine, is
only available through South Coast Fire Equipment that covers the west coast
territory.
2. Delay the purchase of Engine 5. Due to the long lead time from order placement to
delivery this could risk Station 5 opening without an apparatus.
ATTACHMENTS
A - South Coast Quote
B - Sole Source Memo
C - San Luis Obispo Engine Lease Options
Page 708 of 987
Extension
(1 )
1,144,163.00$
Sales Tax @ 8.750%100,114.26$
1,244,277.26$
Performance Bond -$
California Tire Fee 10.50$
Consortium Fee Not Applicable -$
1,244,287.76$
The above proposal price shall be valid until or extended in writing by South Coast Fire Equipment.
Said apparatus and equipment are to be built by the manfacturer and shipped in accordance with the
specifications hereto attached, delays due to strikes, war or international conflict, failures to obtain chassis,
materials, inability to obtain labor, supplies or manufacturing facilities, epidemics, acts of God, or causes
beyond our control not preventing, delivery would be 45-51 months after receipt of this order and
acceptance thereof at our office in Corona, California, and deliver to you at
PROPOSAL FOR FURNISHING FIRE APPARATUS
for final acceptance by South Coast Fire Equipment, Inc., at its corporate office in Corona, California,
Each
January 16, 2025
San Luis Obispo City
The undersigned is prepared to provide for you, our customer, upon an order being placed by you,
the apparatus and equipment herein named and for the following prices:
San Luis Obispo, CA 93401
2160 Santa Barbara Ave
One
. The buyer must make the payment
within 15 days to obtain the full discount. Payments not received with in the 15 days are subject to an
adjustment to the Total Purchase Price for the prepayment.
1,144,163.00$
Enforcer Type-1 Pierce Ultimate Configuration
Engine Fire Apparatus
100,114.26$
-$
TOTAL PURCHASE PRICE
-$
05/01/25
Payment Terms - Payment is due of the Total Purchase Price at time of delivery. Changes to the specifications
since the time of order can added to the Total Purchase Price or invoiced on a separate invoice. The final
sales tax amount will be determined at time of delivery based on the tax rate at that time. An increase or
decrease in cost will be reflected on the final invoice.
If the customer would desire to pay for the apparatus within 15 days of the purchase order being accepted the
APPARATUS COST WITH TAX
10.50$
Not Required
1,244,277.26$
1,244,287.76$
If the customer so desires to purchase the Product described in the Proposal and the attached specifications,
prior to the expiration date listed above, the Customer shall sign and return this proposal. The Customer can
then provide their choice of document for entering into the agreement by providing a Purchase Order, or
signing a Contract with South Coast Fire Equipment, 3150 Palisades Dr. Corona, CA 82878 as the seller.
San Luis Obispo
Total Purchase Price would be reduced to
The specifications herein contained shall form a part of the final contract and are subject to changes desired
by the purchaser, provided such alterations are interlined prior to the acceptance by the company of the order
to purchase, and provided such alterrations do not matterially affect the cost of the construction of the
apparaus
Page 709 of 987
The proposal for fire apparatus conforms with all Federal Department of Transportation (DOT) rules and
regulations in effect at the time of bid, and with all National Fire Protection Association (NFPA) guidelines
for Automotive Fire Apparatus as published at time of bid, except as modified by customer specifications
Any increased costs incurred by the first party because of future changes in or additoinas to said DOT or
NFPA standards will be passed along to the customer as an addition to the price set forth above. Unless
accepted within 30 days from the specified date, the right is reserved to withdraw this proposition.
Respectfully Submitted,
South Coast Fire Equipment, Inc.
Sales Representative Signature:____________________________________
Title:_______________ Date:____________________
I, ___________________ authorized representative of
________________________ agrees to purchase the
proposed product(s) and agree to the terms and conditions of
this proposal and the specifications hereto attached.
The Seller will document any such updated price for the customer's approval before proceeding and
provide an option to cancel the order without charge if the updated price is not accepted.
Bryden Newell
Force Majeure - South Coast Fire Equipment shall not be responsible nor deemed to be in default on
accountof delays in performance due to causes which are beyond the seller's and manufacturer's control and
make the seller's performance impracticable, including but not limited to wars, insurrections, strikes, riots, fires,
storms, floods, other acts of nature, explosions, earthquakes, accidents, any act of government, delays in
transportation, inability to obtain necessary labor supplies or manufacturing facilities, allocation regulations or
orders affecting materials, equipment, facilities or completed products, failure to obtain any required license or
certificates, acts of God or the public enemy or terrorisim, failure of transportation, epidemics, quarantine
restrictions, failure of vendors (due to causes similiar to those within the scope of the clause) to perform their
contracts or labor troubles causing cessation, slowdow, or interruption of work.
Cancellation/Termination. In the event this Agreement is cancelled or terminated by a party before
completion, South Coast Fire Equipment (SCFE) may charge a cancellation fee. The following charge
schedule based on costs incurred may be applied: (a) 10% of the Purchase Price after order is accepted and
entered by Manufacturer; (b) 20% of the Purchase Price after completion of approval drawings, and; (c) 30%
of the Purchase Price upon any material requisition. The cancellation fee will increase accordingly as costs are
incurred as the order progresses through engineering and into manufacturing. SCFE endeavors to mitigate any
such costs through the sale of such Product to another purchaser; however Customer shall remain liable for
the difference between the Purchase Price and, if applicable, the sale price obtained by SCFE upon sale of the
Product to another purchaser, plus any costs incurred by SCFE to conduct any such sale.
Due to global supply chain constraints, any delivery date contained herein is a good faith estimate as of the
date of this order/contract, and merely an approximation based on current information. Delivery updates will be
made available, and a final firm delivery date will be provided as soon as possible.
Persistent Inflationary Environment: If the Producer Price Index of Components for Manufacturing
(www.bls.gov Series ID: WPUID6112) ("PPI") has increased at a compounded annual growth rate of 5.0% or
more between the month Pierce accepts the order (Order Month") and a month 14 months prior to the then
predicted Ready For Pickup date ("Evalution Month"), then pricing may be updated in an amount equal to the
increase in PPI over 5.0% for each year or fractional year between the Order Month and the Evaluation Month.
Page 710 of 987
City of San Luis Obispo Sole Source Justification Form
Current Template Form
Click here to enter text.
The City of San Luis Obispo (SLO) policy is to solicit quotations or bids for purchases for tier two (2) through
five (5) price levels (See Purchasing Policy section 202A; 203A).
Under SLO Municipal Code 3.24.060, bid procedures may be waived and procurement obtained from a
single sole- source if it meets the criteria in Municipal Code 3.24.060. (See p. 2 for relevant criteria).
Staff must justify waiving the bid procedures in this form and tie the justification to one of the Municipal
Code subsections. (See p. 2 for relevant criteria)
The justification should provide enough detail so that anyone in the public with no background on the
purchase can understand the justification.
1. What is the product or service? Why is this product or service offered the only ‘sole-source’ that
meets the City’s requirements? Emergency vehicles are a vital part of the service delivery for the
City of San Luis Obispo Fire Department. The Type-1 fire engine is a critical piece of equipment for
rapid response to all emergencies. Per Muni Code 3.24.060D “When supplies or equipment has
been uniformly adopted in the city or otherwise standardized” bidding process is not required.
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.
2. Is the purchase an upgrade or addition to existing standardized equipment or systems? If so,
will the purchase of this product avoid “switching” costs? (e.g., additional training required;
data conversion; implementation of a new system; etc.)? This purchase is an addition to Fire
Department Fleet in preparation for new Station 5. This engine is as close to a replication of
recently ordered engines as the department could get with updates the vendor has made. There
will be no “switching” associated.
3. Is this a request for services by a contractor with unique and critical knowledge of standardized
City equipment, systems or programs? No
4. What is the quoted price for the product or service, and is it reasonable (based on other
products or services in the same field or based on historical pricing for the City for similar
products or services)?
Quoted price is $1,244,xxx and is in line with current costs of fire apparatus. South Coast is the
only authorized dealer for Pierce and the only dealer SLOFD can purchase a Pierce fire apparatus
from.
Page 711 of 987
Current Template Form
Requester: Date
_____Nicole Vert________________ _04/07/2025__
Approver: Date:
__________________________________ _____________
Page 712 of 987
Current Template Form
3.24.060 Bidding procedures—Use of not required when.
Purchase of those items listed in Section 3.24.010 shall be by bid procedures set forth in this chapter. Such
procedures may be dispensed with, at the discretion and judgment of the purchasing authority as to the
best interests of the city, as follows:
A. When the amount to be expended is less than the bid requirement amount which shall be
specified by resolution of the council;
B. When an emergency purchase is made to address a situation that creates an immediate and
serious need for equipment, supplies, or services that cannot be met through normal purchasing
procedures and where the lack of such equipment, supplies or services would seriously threaten the
functioning of city government, the preservation of property, or the health or safety of any person;
C. When the item(s) to be purchased can be obtained from only one vendor or supplier;
D. When supplies or equipment have been uniformly adopted in the city or otherwise standardized;
E. When the purchase will be made cooperatively with one, or more, other units of government, or
from a local dealer within the city limits that can provide the same brand, model and configuration of
item(s) identified in cooperative purchase agreement(s) at or below the cooperative purchasing net cost
within the same terms and conditions;
F. When reasonably necessary for the preservation or protection of public peace, health, safety or
welfare of persons or property; or
G. When, given the indeterminate nature of the city’s need, a request for proposal will result in a
more favorable and efficient comparison of supplies, equipment and/or services. (Ord. 1618 § 1 (Exh. A
(part)), 2015: Ord. 1608 § 1, 2014; Ord. 954 § 2 (part), 1983: prior code § 2950.6).
Page 713 of 987
Page 714 of 987
BBudgetaryy Pumperr Leasee Options April 2024
Page 715 of 987
PPiercee Financiall Solutions
Pierce and PNC Equipment Finance partner to
provide a tax-exempt municipal leasing program for
Pierce apparatus
Our team has financed > $1.5 billion of Pierce apparatus!
Page 716 of 987
PPiercee Programm Advantages
•Financing from PNC (3rd largest bank-owned leasing company in U.S.)
•Flexible payment structures to meet your budget requirements
•Industry’s most extensive lines of lease plans for fleet replacement
•Prepay program to lower payments and eliminate interest rate risk
•Deferred payment option to simplify budgeting
•$0 documentation fees
•Dedicated Account Executive to assist throughout entire process
Page 717 of 987
LLeasee Paymentt Protectionn
• San Luis Obispo payments have two layers of protection in the
event Pierce doesn’t deliver the apparatus:
1. Pierce Performance Bond
Ensures that the customer will receive the apparatus in accordance with the terms of
the contract agreement. Guarantees one year warranty will be performed.
2. PNC “Four Party Agreement” in lease contract
If Pierce fails to deliver Equipment, then Pierce shall pay to Lessee the Lessee’s
payments and the amount owed to PNC (the lease is refunded).
Page 718 of 987
BBudgetaryy Pumperr Leasee Purchasee Options
Pierce Apparatus: (1) Custom Pumper Date 3 Year Lease Purchase 5 Year Lease Purchase
Budgetary Cost: $1,100,000.00 April 2024 Order/Lease Start Order/Lease Start
Delivery: TBD April 2025 $409,162.66 $258,725.32
April 2026 $409,162.66 $258,725.32
*Rate as of April 2024 and is fixed at closing April 2027 $409,162.66 $258,725.32
April 2028 $258,725.32
April 2029 $258,725.32
Rates 5.69% 5.66%
Page 719 of 987
PROGRAM CONTACTS
Tom Whitmer,
Director of Business Development
twhitmer@piercemfg.com
(920) 267-1256
Kim Simon, Vice President
kim.simon@pnc.com
(614) 670-3994
Page 720 of 987