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Agenda Item 23.

City Council Meeting

Meeting Date:	01/16/2018
FROM:	Bill Gallardo

Subject:

Purchase of Pierce Arrow XT Pumper

RECOMMENDATION

Authorize the Purchasing Agent to issue a purchase order for $669,182.37 to South Coast Fire Equipment for a Pierce Arrow XT Pumper.

BACKGROUND/DISCUSSION

On July 11, 2017, the City Council authorized the purchase of various City vehicles and equipment described in the Annual Vehicles and Equipment Purchase Plan for Fiscal Year 2017-18. All the items in that plan were for replacements only. One of those items, the fire pumper, was estimated at $600,000 based on the equipment replacement fund charges. The quote for the new fully-configured replacement unit was $669,182.37. While this item was over the estimated amount by $69,182.37, there has been about $22,481 in savings on purchases of other vehicles, which will help offset that overage. The approximate 11.5% difference is due largely to compounding inflationary factors in addition to equipment modernization costs and regulatory requirements.

To assist in its search for a new fire pumper, staff formed a fire apparatus committee, defined its needs; developed specifications; visited various fire departments where the prospective equipment was located and sought their input; and ultimately selected the Pierce Arrow XT Pumper as the unit that would best meet the specifications derived by the committee.

Thereafter, a variety of price proposals were obtained from South Coast Fire Equipment (SCFE) based on the competitively bid Houston-Galveston Area Council (HGACBuy) cooperative purchasing contract. Staff sought additional discounts that SCFE might be able to offer. They provided an additional discount of $18,486.00, based on pre-payment of about 80% or $542,013.37 and a final 20% or $127,169.00 upon delivery. As a security to help ensure the unit is completed to the City’s satisfaction, SCFE will provide a performance bond.

The summary below provides the purchase costs.

80% Pay Upfront	20% Pay on Delivery	Total Purchase Price
$542,013.37	$127,169.00	$669,182.37

The delivery of the new fire pumper is expected to take about 11 months after receipt of a purchase order from the City. The proposed equipment is expected to have a 15-year service life with five years in reserve thereafter. The unit being replaced would be publicly auctioned to recapitalize that investment and those monies would go into the General Fund.

Funding for the outright purchase has been included in the FY 2017/18 budget and currently there are budgeted funds available to cover the additional cost. It is noted that staff is currently considering a lease financing option as well. This option was discussed at the January 9, 2018 Finance Committee meeting. If staff determines that a lease financing option may be beneficial, competitive lease offers will be obtained and a recommendation will be presented to the Finance Committee for their review and consideration. Any consideration of a lease financing option would then return to the City Council with the final recommendation for consideration.

COMMISSION/COMMITTEE RECOMMENDATION

The Finance Committee, at their January 9, 2018 meeting, recommended that this item be submitted for Council's review and consideration.

FISCAL IMPACT/SUMMARY

The new fire pumper will help Brea continue to provide excellent fire services for the City and allow the retirement of the existing unit, which has reached the end of its service life. The purchase price includes all costs for the equipment, taxes, fees, and discounts. To take advantage of the current contract price and pre-payment discount, the purchase order will need to be issued by January 26, 2018. If the purchase order is issued thereafter, prices will be subject to a 3% increase estimated to be about $20,000.

The Fiscal Year 2017-18 budget has sufficient funding available in the Public Works Department, Equipment Maintenance Division, Expenditure Accounts for Field and Shop Equipment and Mobile Equipment (480-51-5161-4641).

RESPECTFULLY SUBMITTED:

William Gallardo, City Manager
Prepared by: Neil Groom, Procurement and Contracts Administrator
Concurrence: Cindy Russell, Administrative Services Director

Attachments
Quotation