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HomeMy WebLinkAboutItem 5f. Authorize the Fire Department to issue a Purchase Order for a Tractor-Drawn Aerial ApparatusGt� Y O.o CouncilAgenda • • CIS � Department: 8 Cost Center: 8506 For Agenda of: 8/4/2026 Placement: Consent Estimated Time: N/A FROM: Randy Harris, Fire Chief Prepared By: Nicole Vert, Business Analyst Item 5f SUBJECT: AUTHORIZE THE FIRE DEPARTMENT TO ISSUE A PURCHASE ORDER FOR A TRACTOR -DRAWN AERIAL APPARATUS RECOMMENDATION 1. Issue a purchase order (PO) in the amount of $2,637,438.34 to South Coast Fire Equipment for a sole source purchase of a Type 1 Tractor Drawn Aerial Apparatus (TDA): and 2. Authorize the City Manager to execute the purchase documents; and, 3. Appropriate $1,000,000 from the Capital Projects Reserve Fund to support the replacement of Fire Truck 1; and, 4. Adopt a draft Resolution (Attachment A) entitled, "A Resolution of the City Council of the City of San Luis Obispo, California, Authorizing Appropriation of $1,000,000 from the Capital Reserve to support the Replacement of Fire Truck 1 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 for any purchase in excess of $200,000. The recommended actions to support the replacement of Fire Truck 1 are consistent with City Council's adopted Capital Improvement Plan (CIP) and Fund Balance and Reserve Policy. The Fund Balance and Reserve Policy, adopted in June 2021, provides guidelines for the Capital Projects Reserve Fund, which states: The City will maintain a committed reserve of 20% of the capital improvement plan budget from the Local Revenue Measure for the purposes of offsetting unanticipated cost increases, unforeseen conditions, and urgent unanticipated Page 93 of 1059 Item 5f projects to provide continued investment in infrastructure maintenance and enhancement, Use and allocations of funds from the Capital Projects Reserve Fund will be made to Capital Projects including Major Facility Replacement upon Council approval as necessary during any fiscal year. The proposed use of the Capital Projects Reserve Fund to support the replacement of Fire Truck 1 is consistent with this policy, as these funds would offset the unanticipated funding shortfall resulting from the denial of anticipated grant funding for a critical public safety asset. Furthermore, use of the Capital Projects Reserve Fund supports continued investment in essential infrastructure and helps maintain reliable emergency response service levels. Background Emergency vehicles are a vital part of the service delivery for the City of San Luis Obispo Fire Department. Truck 1 is a Tractor -Drawn Aerial (TDA) apparatus that is a fire truck equipped with a long aerial ladder used for rescues, accessing upper floors and roofs for rescues and fighting fires from elevated positions. Its aerial ladder can reach the City's multi -story buildings, including the County Government Center, Anderson Hotel and multiple buildings on the Cal Poly campus, beyond the safe reach of the portable ladders carried on fire engines. The TDA's unique two -driver steering system provides the ability to bend in the middle allowing for tight turns and exceptional maneuverability to safely navigate the City's narrow streets, tight intersections, and downtown areas while carrying the specialized equipment needed for complex emergencies. Truck 1 was purchased in 2010 with an expected lifespan of twenty years and 10,000 engine hours, which Truck 1 reached in 2023 and as a result the drive train began rapidly deteriorating. To extend its life to reach the expected twenty-year span, Truck 1 was refurbished in early 2025, receiving a new engine, transmission, water pump, and several other vital parts. This has greatly reduced the amount of time out of service for repairs and will allow the truck to reach replacement in 2030. The refurbishment did not extend the life of the truck beyond twenty years due to its other equipment, most importantly, the aerial ladder, which is reaching end of reliable life and will need to be removed from front line service. The lead time for a custom-built fire truck is 43 to 46 months necessitating the PO issuance and order placement now to ensure the Truck's arrival by 2030. Through the utilization of an internal apparatus committee, staff developed specifications that were used to build the pricing for the purchase of a replacement Truck 1. The specifications considered the community's unique features and sought the best overall fire truck to complement the existing apparatus fleet. The new fire apparatus will provide the same capabilities as previous engines but with improved safety, efficiency, and reliability. Page 94 of 1059 Item 5f Sole Source Purchase Recommended It is recommended that City Council authorize a sole source purchase contract to South Coast Fire Equipment in the amount of $2,637,438.37 for the purchase of a 2026 Pierce Enforcer Type 1 TDA. 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 apparatus has been the standard for the City of San Luis Obispo for the last quarter century. As discussed more fully in the sole source justification memo (see Attachment C), the City's Fire Department has standardized its apparatus (Pierce), and those apparatus can be obtained from only one 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. South Coast Fire Equipment provided the purchasing quote (Attachment B) for the apparatus as they are the sole provider of Pierce engines in this region (Attachment C). 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. Previous Council or Advisory Body Action On April 15, 2025, the City Council approved the sole source purchase of a Pierce Arrow Type 1 Pumping Fire Engine. Public Engagement This item is a consent item for the August 4, 2026 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 and Public Works Department concur with the Fire Department's recommendation to issue the PO and appropriate $1,000,000 from Capital Projects Reserve Fund. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended action in this report, because the action does not constitute a "Project" under CEQA guidelines Sec. 15378. Page 95 of 1059 Item 5f FISCAL IMPACT Budgeted: Yes Funding Identified: Yes Fiscal Analysis: Budget Year: 2026-27 Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost General Fund $ $ $ $ State Federal Fee Capital Reserves $3,212,229 $1,000,000 $2,212,229 $0 Total $3,212,229 $1,000,000 $2,212,229 $0 Funding for the purchase of replacement Truck 1 was initially programmed into the Capital Improvement Plan (CIP) beginning with the adoption of the 2025-2027 Financial Plan, debt financed over five years through an external lender to be repaid with interest. South Coast Fire Equipment provided a quote for $2,637,438.34. The new engine will require outfitting with new equipment including but not limited to cardiac monitor, hoses and fittings, extrication equipment and other items necessary for a front-line apparatus. The estimated cost of this equipment is $300,000. Staff propose two upfront payments of $1,000,000 from Capital Projects Reserve Fund now and $600,000 from Capital Outlay in FY 2028-29 before the arrival of Fire Truck 1, and debt financing the remaining $1,037,438.34. Fire staff will work with the Finance Department to find the best offers from a variety of lenders to secure most favorable terms. In November 2025 Council approved a lease agreement with JP Morgan to purchase a fire engine with an interest rate not to exceed 5%. Assuming similar terms for a new lease purchase agreement the debt service cost over a five-year term will be $137,226.13. The total cost of the truck with the equipment and debt service cost would be $3,074,664.47. Total Cost of Truck Purchase Truck Cos- $ 2,637,438.34 Debt Service Cost $ 137,226.13 Equipment Cos- $ 300,000.00 Total Cost $ 3,074,664.47 In December 2024, the Fire Department applied for a Federal Emergency Management Agency (FEMA) Assistance to Firefighter's grant requesting $1,000,000 assistance in the purchase of the replacement of Truck 1. Due to the timing of the grant coinciding with Page 96 of 1059 Item 5f development of the 2025-2027 Financial Plan, the budget for Truck 1's replacement included the requested grant award. Unfortunately, the City received notification in June 2026 that it was not awarded the grant. To offset this funding shortfall staff is requesting City Council approve the use of $1,000,000 from Capital Projects Reserve Fund. The PO will lock the price for the replacement truck at the quoted $2,637,438.34. The quote expires August 7, allowing the quote to expire will require the City to obtain updated pricing which will guarantee a price increase of no less than 1 %-2%, which could be an increase of as much as $52,748. The estimated delivery is not contingent on the payment plan. Staff will present the funding plan for the remaining budget with the 2027-2029 Financial Plan. Staff will also return to Council at a later date with a detailed lease agreement and request authorization to enter the agreement. Two risks to the planned purchase are present. While the quoted price will be fixed upon PO issuance, the agreement allows South Coast to increase the purchase price to the extent that the compound annual growth rate of the Producer Price Index of Components for Manufacturing exceeds 5%. This metric has exceeded the 5% contract threshold for the last five months and currently stands at 6.6%. Should this situation occur, the seller will document any updated price and provide an option to cancel the order without charge. Second, market interest rates at the time of borrowing could exceed staff's assumption. Interest rates are volatile and can be correlated with inflation rates. If either or both of these risks are realized, the total cost with interest may increase and staff may need to request additional appropriations. 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. Purchasing an apparatus from a different manufacturer would require additional operator and mechanic training, increase inventory requirements, and reduce operational consistency, resulting in increased overall costs. 2. Delay the purchase of Truck 1. Due to the long lead time from order placement to delivery, this alternative could risk not receiving delivery of replacement Truck 1 prior to the end of its useful life. ATTACHMENTS A - Draft Resolution B - South Coast Quote C -Sole Source Memo Page 97 of 1059 Page 98 of 1059 RESOLUTION NO. (2026 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, AUTHORIZING APPROPRIATION OF $1,000,000 FROM THE CAPITAL PROJECTS RESERVE FUND TO SUPPORT THE REPLACEMENT OF FIRE TRUCK 1 WHEREAS, the City of San Luis Obispo provides fire protection services, which includes equipment that must be replaced from time to time; and WHEREAS, the Fire Department operates an aerial ladder apparatus that is reaching the end of its reliable service life; and WHEREAS, to provide sufficient funding for the replacement purchase of a tractor drawn tiller apparatus and associated equipment purchase, staff recommends that the City Council approve the use of an additional $1,000,000 from the Capital Project Reserve Fund; and WHEREAS, a balance of $3,212,229 is currently available in the Capital Project Reserve Fund; and WHEREAS, Section 3.24.060(D) of the City of San Luis Obispo's Municipal Code authorizes an exception to competitive bidding when supplies or equipment have been uniformly adopted or otherwise standardized by the City; and WHEREAS, the Fire Department has standardized its front-line fire apparatus on the Pierce manufacturing platform and has made substantial investments in manufacturer -specific parts, maintenance equipment, mechanic training, and operational familiarity as documented by the sole source memo (Attachment C). NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: SECTION 1. The City Council authorizes the appropriation of $1,000,000 from the Capital Project Reserve Fund to the replacement of Fire Truck 1 project account 2000554 and approves the sole source purchase thereof. Upon motion of Council Member , and on the following roll call vote: AYES: NOES: ABSENT: , seconded by Council Member fl Page 99 of 1059 Resolution No. (2026 Series) Page 2 The foregoing resolution was adopted this day of 2026. 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 fl Page 100 of 1059 PROPOSAL FOR FURNISHING FIRE APPARATUS May 18, SOUTH8COAST City of Sanan Luis Obispo 2160 Santa Barbara Ave FIRE EQUIPMENT San Luis Obispo, CA 93401 The undersigned is prepared to provide for you, our customer, upon an order being placed by you, for final acceptance by South Coast Fire Equipment, Inc., at its corporate office in Corona, California, the apparatus and equipment herein named and for the following prices: Each Extension One ( 1 ) Pierce 107' Ascendant Tractor Drawn Aerial w/ a 1500 gpm pump on a Pierce Enforcer Chassis $ 2,425,221.00 $ 2,425,221.00 Sales Tax @ 8.750% $ 212,206.84 $ 212,206.84 APPARATUS COST WITH TAX $ 2,637,427.84 $ 2,637,427.84 Performance Bond Not Required $ - $ - California Tire Fee $ 10.50 $ 10.50 Consortium Fee Not Applicable $ - $ - TOTAL PURCHASE PRICE $ 2,637,438.34 $ 2,637,438.34 The above proposal price shall be valid until 08/01/26 or extended in writing by South Coast Fire Equipment. 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 92878 as the seller. 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 Total Purchase Price would be reduced to N/A . 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. 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 43-46 nths after receipt of this order and acceptance thereof at our office in Corona, California, and deliver to you at Ontario 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 apparatus Page 101 of 1059 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. 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. 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. Force Maieure - 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. 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, I, authorized representative of South Coast Fire Equipment, Inc. agrees to purchase the proposed product(s) and agree to the terms and conditions of this proposal and the specifications hereto attached. Bryden Newell Sales Representative Signature: Title: Date: Page 102 of 1059 ONT Y O.t r�IS 04 • of Sall Luis Obispo Sole Source Justification 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. (Seep. 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 tractor drawn apparatus 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. South Coast Fire Equipment is the sole provider of Pierce engines in this region. 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 not an upgrade or addition, but a replacement of an aging truck, the reliable life of which will end in 2030 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 $2,637,438.34 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 103 of 1059 Requester: Nicole Vert Approver[ ] Date Page 104 of 1059 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 105 of 1059 Page 106 of 1059