Loading...
HomeMy WebLinkAbout10 - BA-019 - Replacement of Fire Engines� 2EW ART O U ,.� S e.� d c�FOa+ Council Agenda Item No. 10 November 28, 2000 TO: Mayor and City Council FROM: General Services Director SUBJECT: Replacement of Fire Engines Recommendations Approve the purchase of three fire engines from American LaFrance at a total cost of $957,424 and the transfer of $873,049 from General Fund Unappropriated Reserves to the Equipment Replacement Fund. ($84,375 is already included in the current budget, as a one -year payment towards a fire engine replacement.) With this transfer, all Reserve Funds policy requirements are still being met. Executive Summary In accordance with the standing City Vehicle /Equipment Replacement Guidelines (Council Policy F -9), the City Council approved the purchase of one fire engine last fiscal year, but, for a variety of reasons, that transaction was not completed. Per Policy F -9, another fire engine is scheduled for replacement this fiscal year. Regarding the purchase of a third engine, we have a 22- year -old reserve ladder truck that is no longer safe to operate and should be disposed of In addition, the fire engine we are acquiring in conjunction with the Newport Coast annexation does not meet City standards in several respects. We strongly recommend procuring a new unit for that service as well. The existing unit will be used as one of our reserve engines. Sometimes vehicle purchases have been financed, usually through a lease purchase agreement, and sometimes the City has paid cash (usually depending on the price of the vehicle). We will not know which will be the most advantageous for us until just before the purchase action is finalized. In either case, we recommend that the entire amount needed be placed in the Equipment Replacement Fund. If we end up borrowing the money instead of paying cash, the rest of this money will then earn interest while it remains in that Fund, thereby helping to offset vehicle purchase expenses. C: \windows\ TEMP\ Coaucil- ReplacementFimPumper1116a.doc _I_ Background The City operates a fleet of eight fire engines ranging in age from four to twenty years. In addition, there are three ladder trucks in the City inventory. Council Policy F -9 (City Vehicles /Equipment Replacement Guidelines) provides for the replacement of fire engines after 15 years of frontline service and 20 years if the vehicles were carried on in a reserve service status. A listing of all fire engines and fire trucks with a replacement schedule that complies with Policy F -9 is attached. Council authorized the lease /purchase replacement of Unit 2417 (a 1980 fire engine) in Fiscal Year (FY) 99 -00 at a total cost of $379,500 paid over five years, and an additional fire engine (replacement for Unit 243 1) in FY 00 -01 at a cost of $421,875 paid over five years. Funding for the 1980 engine was not carried forward into the FY 00 -01 budget, so at the present time, staff has the Council authority to purchase only a single fire engine. The City's current fire equipment was purchased from a variety of manufacturers, which makes maintenance costs more difficult and expensive. In an attempt to standardize the City's fire engine model and associated equipment, the Fire and General Services Departments have jointly conducted extensive research in the past year to identify the quality, availability, and costs associated with various fire engine models. Staff efforts have also addressed concerns regarding increases in fire engine costs. Discussion Staff recommends that two of the oldest fire engines (1980 and 1988 models) and the oldest fire truck (a 1978 model) be replaced in the next 12 months due to the growing maintenance costs of aging equipment, obsolescence of operating systems, the need for fire engine commonality of equipment both for firefighters and fire engine mechanics, and the necessity to upgrade the fire engine dedicated to the annexed area of the Newport Coast. This recommendation includes the single fire engine authorized for purchase in the current budget. The last fire engine purchased by the City was in 1996 at a cost of $348,145. The total cost of each of the three fire engines proposed for purchase in this report is $319,141. Purchase Justification The replacement of the first two fire engines has been previously approved by the Council based on need and the Council replacement policy. C:\ windows\ TEMP \Cowcil- ReplacmentFirePumperl l l6a.doc -2- As noted above, the third replacement fire engine is also needed due to the poor operating condition of the 1978 American LaFrance ladder truck and for the enhanced fire protection of Newport Coast. The 1978 ladder truck, our only reserve ladder truck, has become virtually inoperable over the past two years. It has failed to pass its annual ladder inspection, rendering it unsafe to use for aerial operations, and continues to create maintenance difficulties for our heavy equipment mechanics. Under the F9 policy, it would be replaced in 2003. Regarding Newport Coast, the four oldest fire engines (1980, 1982, 1985, and 1988 models) cannot adequately traverse the steep terrain of the area. The County fire engine due to be transferred to the City with the annexation of Newport Coast has had numerous mechanical problems. If the Council approves the additional fire engine purchases, the County unit will be placed in reserve and one of the three new engines will be assigned to the Newport Coast fire station upon the City annexation of the area. Additional reasons for fire engine replacement which apply to all three purchases include: the increased use of fire engines that now accompany all paramedic calls, out of County use of City fire engines to fight regional fires, wherein our older units cannot maintain freeway speeds in convoy with other fire engines; and the necessity to shorten the service life of fire engines to ensure technical currency. Selection of Manufacturer To address concerns with previous equipment purchases, staff researched the quality, availability, and costs associated with the purchase of fire engines in an effort to standardize the model and associated equipment as well as reduce unit costs. Emphasis by staff in the research for a new fire engine has been on purchasing less expensive units that will be retained fewer years than provided for in current City Council policy. An engine can become technically obsolete in 7 to 10 years in the current development of fire engine technology. Proposals for trade -in alternatives were also researched to lower the overall cost of the purchase while maintaining a more frequent replacement schedule. By replacing the engines in a shorter time frame, a higher resale value is obtained for the used engines, thereby lowering the overall costs of the engines. Performance specifications in regards to lease terms, buy -back options, availability of service facility, and delivery times were developed by the Fire Department staff and reviewed by the General Services Department staff. The City specifications were then forwarded to a select group of three fire engine manufacturers: American LaFrance, Pierce, and Emergency One, in an informal request for bids and purchase options. The three vendors were selected based on the quality and reputation of their product and the fact that each company builds the entire fire engine rather than subcontracting out portions. Each company submitted informal bids per City vehicle specifications. Current fire engine models of the three manufacturers were evaluated thoroughly by staff. The CHwindows \TEM P\Counci l- ReplacemenffimPumMI 116a.doc .3- fire engine manufacturers also evaluated the trade -in value of the four oldest fire engines prior to submitting informal bids. American LaFrance best meets the City's performance and maintenance factors such as fire engine turning radius and maneuverability, availability of a custom low profile cab that will fit into all fire stations, and finally, a more comprehensive warranty program than the two other. manufacturers. In addition, American LaFrance was the only manufacturer that offered an optional buy back program that would permit the City to replace obsolete fire engines more readily. As a matter of information, the oldest City fire apparatus is a 1978 American LaFrance ladder truck. Staff recommends the purchase of three American LaFrance fire engines at a total cost of $319,141 each based on value, performance, maintainability, and technical support. This is a significantly lower price than had been used for budgeting in Fiscal Years 99 -00 ($379,500) and 00 -01 ($421,875). The amount includes sales tax, finance charges, two factory visits for City staff to monitor fire engine construction, trade -in value of two engines, and a volume discount. A trade -in allowance would be accepted for Units 2403 and 2417 ($41,000 total for both units) as part of the purchase agreement. The third engine to be replaced will be either retained in reserve, possibly as a replacement for the oldest fire truck (1978 American LaFrance Ladder Truck), or disposed of at a general auction. If the Council approves the fire engine purchases, the three engines would be built and could be in service by July 1, 2001. Financial Considerations The total cost of the three fire engines is $957,424. Funds in the amount of $84,375 that are currently budgeted in the Equipment Replacement Fund for the first annual payment of one fire engine would be used towards this purchase. Therefore, a budget amendment in the amount of $873,049 is necessary to fund the balance of the proposed purchase. Payment is not due until the fire engines are delivered. Although the City could pay cash for this equipment, doing so may not be the best course of action. As a general rule, we are able to arrange financing at a lower interest rate than the current rate of return on our investments. This situation changes from time to time, so the decision to finance any equipment purchase needs to be made on a case by case basis. However, even if we decide to borrow the money for the purchase, we still recommend that the full amount required be set aside for that purpose in the Equipment Replacement Fund at the time the purchase is approved. The proposed Budget Amendment and Fund Transfer for $873,049 has been prepared with that in mind. C.\ windows\ TEMP\Co mcil- ReplacemenlFirePomperl 116a.doc 4- Staff will continue to assess the most advantageous method of final payment such as lease - purchase or outright purchase based on interest rates, availability of cash assets, etc., approximately 30 days prior to the delivery of the units. Finally, staff will be evaluating changes to the fire apparatus replacement policy (Council Policy F -9) during the annual Council policy review in January 2001. Very respectfully, David E. Niederhaus Attachments: (A) Fire Engine and Pumper Data Sheet and Replacement Schedule (B) Proposed Budget Amendment C\ windows %TEMPICoo cil- RePlacemenffimPunper1116a,doc .5. Fire Department Equipment List Repl. Year * Denotes units to be traded in. Prepared by General Services Department 11/20/2000 Current per Council Unit No. Year Make Miles Policy F9 Pumpers 2417 *1980 Mack Pumper 99,639 2000 2431 1982 Mack Pumper 106,176 2002 2402 1985 Mack Pumper 89,368 2005 2403 *1988 Mack Pumper 41,587 2008 2405 1989 Federal Pumper 88,357 2009 2401 1991 Federal Hush Pumper 51,046 2011 2406 1995 Saulsbury Pumper 25,952 2015 2404 1996 Saulsbury Pumper 24,652 2016 Ladder Trucks 2414 1978 American LaFrance Ladder Truck 99,462 2003 2433 1994 Simon-LTI Ladder Truck 37,763 2019 2462 1997 Simon-LTI Ladder Truck 19,860 2022 * Denotes units to be traded in. Prepared by General Services Department 11/20/2000 CITY OF NEWPORT BEACH REQUESTS FOR FUNDS Date November 14, 2000 TO: Administrative Services Director FROM: General Services Director SUBJECT: Requestfor Funds Request for additional funds, $873,449 Funds are not available in the current budget. Additional appropriation to the account number noted below is requested: Equipment Maintenance — Purchasing (Division 61201 6120 -9100 Rolling Equipment $873,049 The funds are needed for the lease costs on three fire pumpers. General Services Director Approved: City Manager Administrative Services Director City of Newport Beach BUDGET AMENDMENT 2000 -01 EFFECT ON BUDGETARY FUND BALANCE: Description Division Increase Revenue Estimates X Account Increase Expenditure Appropriations 9100 Rolling Equipment Division Transfer Budget Appropriations SOURCE: Account Number from existing budget appropriations Number from additional estimated revenues X from unappropriated fund balance EXPLANATION: NO. BA- 019 AMOUNT: E873,049.00 Increase in Budgetary Fund Balance AND X Decrease in Budgetary Fund Balance No effect on Budgetary Fund Balance This budget amendment is requested to provide for the following: To increase expenditure appropriations for the purchase of three new fire engines. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Account 010 3605 REVENUE ESTIMATES (3601) Fund /Division Account EXPENDITURE APPROPRIATIONS (3603) Amount Debit Description General Fund Balance $873,049.00 ` Description Division Number Account Number Signed: Signed: Credit $873,049.00 /111-d0 - aCi Date Signed: City Council Approval: City Clerk Date v Description Division Number 6120 Equipment Maintenance - Purchasing Account Number 9100 Rolling Equipment Division Number Account Number Division Number Account Number Division Number Account Number Signed: Signed: Credit $873,049.00 /111-d0 - aCi Date Signed: City Council Approval: City Clerk Date v