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Home My WebLink AboutC-3701 - Purchase of Two Lifeguard VehiclesC -3jc i CITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 10 April 27, 2004 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL By'iHE �L-iiY COUNCII FROM: General Services Department CITY OF NEWPORT BEA David E. Niederhaus, Director, 949 - 644 -3055 4p, dniederhaus @city.newport- beach.ca.us SUBJECT: Budget Amendment for the Purchase of Lifeguard Vehicles ISSUES: The existing Lifeguard Vehicle Sponsorship Agreement between the City and Chevrolet will expire on May 10, 2004. Should the City: (1) purchase seven of the thirteen vehicles operated under the agreement from General Motors and (2) purchase two additional vehicles from dealer stock through the normal City purchasing process? RECOMMENDATIONS: Authorize the purchase of seven vehicles from the General Motors Corporation at a cost of $179,050 and the purchase of two additional lifeguard vehicles at a cost of $50,000. Approve Budget Amendment BA , transferring $232,050 from unap- propriated Internal Service Fund reserves to the General Services Department Accounts 6120 -9100 and 6120 -9102 to fund the cost to purchase of the nine new vehicles and the transfer of equipment into four surplus City vehicles. DISCUSSION: The original lifeguard sponsorship agreement with the General Motors Corporation began in May, 1998 and expired on March 7, 2003. The original agreement provided the City with eleven Chevrolet vehicles (S -10 pickups and Blazer sport utility vehicles) for use on the beach. The units were replaced by Chevrolet at the midpoint of the agreement in 2000. As the administrator of the contract, the County of Los Angeles received a commission of $4,400 per year for the eleven vehicles. On March 11, 2003, the Council approved a new one -year lifeguard sponsorship agreement with Chevrolet administered by the State Parks Department. The City was Budget Amendment for the Phase of Lifeguard Vehicles April 27, 2004 Page 2 one of eight cities, along with the County of Orange and the State of California, to sign the agreement which provided for a total of 63 vehicles. The City received thirteen vehicles (eight S -10 pickups and five Tahoes) in April 2003. The total commission paid to the State for their use was $5,199 for the one year period for a total of thirteen units. The 2003 agreement gave Chevrolet the option to extend the agreement for three additional years at the end of the initial twelve month period. Chevrolet declined to do so, but did extend the agreement for two months from the scheduled March 10, 2004 expiration date. The current expiration date is May 10, 2004 and the vehicles must be either purchased at set prices from Chevrolet or returned to a local Chevrolet dealer by that date. The Fire Department has continued to pay monthly maintenance and replacement costs into the Internal Services Fund for the maintenance, upkeep, and ultimate replacement of these units since 1998. General Motors has provided coalition members proposed purchase costs for each unit. General Services and Fire Department staffs jointly evaluated various options for purchasing and replacing the vehicles, which included purchasing the 13 units currently being used, returning all the sponsored vehicles to Chevrolet, and purchasing new vehicles from various auto dealers through a normal bid process, or a combination of the two options. Ultimately, the decision was made to purchase only seven of the thirteen vehicles currently in service from Chevrolet. The vehicles to be purchased are 2003 model year vehicles, and are currently equipped with emergency lighting and radios which would need to be transferred to new vehicles if the vehicles were replaced. The remaining six vehicles will be returned to Chevrolet. Three of those are 2002 model year S -10 pickup trucks, which have already been in service on the beach for two years. Council Policy F -9 guidelines provide for beach vehicles to be replaced every four years. We believe the cost quoted by Chevrolet to purchase the vehicles is too high considering they would be due for replacement in late 2005. The three other vehicles being returned to Chevrolet are 2003 Tahoes. Staff is seeking approval to purchase two less expensive pickup trucks to replace two of the Tahoes, which will be a better fit for the users than the Tahoes currently assigned. Four of the replacement units will be surplus City vehicles that have been retained pending the outcome of lease negotiations, and equipment will be transferred to those units from vehicles being returned to Chevrolet. FISCAL IMPACT: The cost to purchase the nine vehicles will be as follows: Unit Year Model Purchase Price' 2817 2003 Tahoe LS $33,900 2819 2003 Tahoe LS $33,900 2821 2003 S -10 4x4 $22,250 • Budget Amendment for the Purse of Lifeguard Vehicles April 27, 2004 Page 3 2822 2003 S -10 4x4 $22,250 2823 2003 S -10 4x4 $22,250 2824 2003 S -10 4x4 $22,250 2525 2003 5 -10 4x4 $22,250 New 2004 Ext Cab Pickup 4x4 $24,000 New 2004 Ext Cab Pickup 4x4 $26,000 Total $229,050 'Prices include taxes There are sufficient appropriated funds in the Internal Service Fund for these purchases, and as previously stated, the Fire Department has made contributions for the eventual end of the sponsorship program, when we would be required to again purchase lifeguard vehicles. ENVIRONMENTAL REVIEW: This action requires no environmental review, as it is not a project pursuant to CEQA. SUMMARY: The General Services and Fire Department staffs have developed a plan for the necessary purchase and replacement of lifeguard vehicles given the end of the sponsorship program by Chevrolet. The purchase of the nine vehicles will allow Marine Safety operations to continue in a seamless fashion as the summer season commences, provided the attached budget amendment is approved prior to May 10. Prepared by: Y titj Mike Pisani Deputy General Services Director Attachments: Budget Amendment Form Submitted by: David E. Niederhaus General Services Director Wity of Newport Bea* NO, BA- 04BA -053 BUDGET AMENDMENT 2003 -04 AMOUNT: F$232,050.00 EFFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates Increase in Budgetary Fund Balance Increase Expenditure Appropriations AND X Decrease in Budgetary Fund Balance Transfer Budget Appropriations No effect on Budgetary Fund Balance SOURCE: from existing budget appropriations from additional estimated revenues PX I from unappropriated fund balance EXPLANATION: This budget amendment is requested to provide for the following: To increase expenditure appropriations for the purchase of nine lifeguard vehicles. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Account 610 3605 REVENUE ESTIMATES (3601) Fund /Division Account EXPENDITUREAPPROPRIATIONS (3603) Description Equipment Fund Balance Description Description Division Number 6120 Equipment Replacement Account Number 9100 Rolling Equipment Division Account Division Account Division Account Signed Signed Signed Number 6120 Equipment Replacement Number 9102 Contracted Setup Number Number Number Number Approval: Administrative Services Director Administrative )Vproval: City Manager City Council Approval: City Clerk Amount Debit Credit $232,050.00 $229,050.00 $3,000.00 'I Date D e Date Flo Wy of Newport BeaC60 NO. BA- 04BA -053 BUDGET AMENDMENT 2003 -04 AMOUNT: $232,050.00 EFFECT ON BUDGETARY FUND BALANCE: Increase Revenue Estimates Increase in Budgetary Fund Balance �X Increase Expenditure Appropriations AND � Decrease in Budgetary Fund Balance Transfer Budget Appropriations ❑ No effect on Budgetary Fund Balance SOURCE: from existing budget appropriations from additional estimated revenues X from unappropriated fund balance EXPLANATION: This budget amendment is requested to provide for the following: To increase expenditure appropriations for the purchase of nine lifeguard vehicles. ACCOUNTING ENTRY: BUDGETARY FUND BALANCE Fund Account 610 3605 REVENUE ESTIMATES (3601) Fund /Division Account EXPENDITURE APPROPRIATIONS (3603) Description Equipment Fund Balance Description Signed: Signed: Approval: Administrative Services Director City Signed: �A4161 `7ylu if® l , llyzrll City Council Approval: City Clerk Amount Debit Credit $232,050.00 $229,050.00 $3,000.00 Date W ( �Y Date Description Division Number 6120 Equipment Replacement Account Number 9100 Rolling Equipment Division Number 6120 Equipment Replacement Account Number 9102 Contracted Setup Division Number Account Number Division Number Account Number Signed: Signed: Approval: Administrative Services Director City Signed: �A4161 `7ylu if® l , llyzrll City Council Approval: City Clerk Amount Debit Credit $232,050.00 $229,050.00 $3,000.00 Date W ( �Y Date