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Home My WebLink AboutMINUTES - 12092014 - FPD D.3RECOMMENDATION(S): 1. APPROVE and AUTHORIZE the Fire Chief, or his designee, to execute a purchase contract with Pierce Manufacturing, Inc. for the manufacture and sale of nine (9) Type I fire engines, three (3) 100’ aerial ladder trucks, and one (1) heavy rescue truck for an amount not to exceed $9,500,000. 2. APPROVE and AUTHORIZE the Fire Chief, or his designee, to execute a lease-purchase agreement with Oshkosh Capital for an amount not to exceed $10,500,000, including finance charges, with annual payments not to exceed $1,000,000 and a term not to exceed 10 years. FISCAL IMPACT: The proposed order of thirteen (13) fire apparatus is valued at approximately $9,100,000 including sales tax and all associated charges. The purchase price for the thirteen (13) fire apparatus will be paid by Oshkosh Capital under the lease-purchase agreement. The proposed lease-purchase program would require annual payments not to exceed $1,000,000 for ten years for a total of no more than $10,000,000 expended over the ten year term. The annual payments of $1,000,000 are included in the current budget and all subsequent budget forecasts and represent less than 1% of the annual operating budget of the Fire District. APPROVE OTHER RECOMMENDATION OF CNTY ADMINISTRATOR RECOMMENDATION OF BOARD COMMITTEE Action of Board On: 12/09/2014 APPROVED AS RECOMMENDED OTHER Clerks Notes: VOTE OF SUPERVISORS AYE:John Gioia, Director Candace Andersen, Director Mary N. Piepho, Director Karen Mitchoff, Director Federal D. Glover, Director Contact: Lewis Broschard, 925-941-3501 I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown. ATTESTED: December 9, 2014 David Twa, County Administrator and Clerk of the Board of Supervisors By: June McHuen, Deputy cc: D.3 To:Contra Costa County Fire Protection District Board of Directors From:Jeff Carman, Chief, Contra Costa County Fire Protection District Date:December 9, 2014 Contra Costa County Subject:Fire Apparatus Acquisition and Lease-Purchase Program BACKGROUND: The Contra Costa County Fire Protection District (“Fire District”) has deferred significant capital purchases of fire apparatus for several years. The last apparatus purchase made solely with Fire District funds was in 2007. Subsequent apparatus purchases have been very limited and include one (1) Type I engine purchased in 2010 and one (1) ladder truck purchased in 2012 with grant awards. The Fire District has a fleet of 34 Type I engines. Those engines are distributed as 18 frontline engines for primary response, three cross-staffed engines at fire stations staffed with aerial apparatus, and 13 reserve and training engines. The average age of the Type I engine fleet is 14 years with an average mileage of 94,063 miles. Fourteen of these engines have mileage in excess of 100,000 and seven exceed 125,000. The Fire District spends an average of $19,113 in maintenance on the current Type I engine fleet annually, with older and higher mileage engines accounting for the majority of the maintenance expenses. The Fire District has a fleet of eight aerial apparatus. Seven are “quint” apparatus, which are equipped with a fire pump, hose, and water. One is a “truck” apparatus that carries no water, pump, or hose. These aerial apparatus are distributed as five frontline aerials for primary response and three spares. The average age of the quint fleet is 14 years. The single truck is three years old. The average mileage of the aerial fleet is 95,839 with the two oldest aerials having an average mileage of 122,000. The Fire District spends an average of $22,668 per year on maintenance for these vehicles. The National Fire Protection Association (NFPA) Standard 1901 (Standard for Automotive Fire Apparatus) and 1911 (Standard for the Inspection, Maintenance, Testing, and Retirement of In-Service Automotive Fire Apparatus) both recommend front-line apparatus be retired into a reserve status after 15 years of service. This is primarily for safety reasons. Older apparatus does not afford firefighters the same level of safety as modern apparatus due to cab designs, inherent safety features incorporated into modern fire apparatus design, modern braking systems, and other considerations. The standards further recommend that all reserve apparatus be removed from service after no more than 25 years of total service. The standards comment on high use, mileage, and other factors as additional determinants to retire front-line apparatus sooner than 15 years. In our Fire District, the high use and mileage of our front-line apparatus suggest retirement sooner than 15 years. The acquisition of the apparatus in this order will accomplish several objectives. The new apparatus will have a direct and immediate impact on our ability to provide increased reliability for emergency response, as compared to our existing fleet, with reduced out-of-service time for maintenance and repairs. The new apparatus will have a direct and immediate impact on reducing our maintenance costs now and into the future as a result of not only the age of the apparatus but also the quality of apparatus being acquired. The new apparatus will enable the Fire District to comply with the recommendations of NFPA 1901 and 1911, increasing firefighter safety and fleet reliability. The investment in capital, on an annual basis, over the next ten years will enable the Fire District to take a significant step forward in meeting one of the recommendations of the Fitch study, which identified the need to invest at least 4% of our budget into facilities and equipment each year. The need for safe, reliable, and modern fire apparatus is paramount to fulfilling the mission of the Fire District. The funds needed for this lease-purchase program are included in the current fiscal year budget and are included in all budget forecasts moving forward and represent less than 1% of the annual budget. The lease-purchase program allows the Fire District to acquire a larger order of apparatus with payments spread out over 10 years. The Fire District has used this type of financing arrangement in the past for large orders of apparatus. This Fire District does not have the capital available to acquire these apparatus without the use of a lease-purchase program. The Fire District relies on a diverse fleet of engine, truck, quint, squad, and rescue vehicles to fulfill our mission of providing safe, reliable, and efficient emergency services. This order will replace approximately 50% of our frontline engines, 40% of our frontline aerial apparatus, and provide a new rescue truck which will enable us to respond more effectively to complex rescues throughout the Fire District. The rescue truck enhances our capabilities by providing an apparatus that can carry the tools and equipment necessary to arrive at a scene quickly and provide our personnel a platform to work from safely and efficiently. The current rescue vehicles are comprised of small utility trucks and trailers required to carry all the rescue equipment necessary. Their response is often hindered by the need to attach trailers, and because they are towed, their response times are often negatively impacted. If approved, new fire apparatus will begin arriving in October 2015 and will be in service shortly after delivery to stations throughout the Fire District. Older apparatus will be removed from service or placed in reserve status to meet the needs of the Fire District. The integration of new apparatus into the fleet and the subsequent removal of older apparatus from frontline service will have a positive impact on reducing maintenance and repair costs which will assist in offsetting a portion of the annual cost of the lease-purchase program. CONSEQUENCE OF NEGATIVE ACTION: The Fire District will not be able to acquire new apparatus. The current age and condition of the fleet will continue to deteriorate and negatively impact our ability to provide safe, reliable, and effective emergency response. Maintenance costs would continue to increase having an adverse impact on the operational budget. Increases in out-of-service time for fire crews will increase as a result of mechanical breakdowns. CHILDREN'S IMPACT STATEMENT: No impact. CLERK'S ADDENDUM Speaker: Erik Rohde, General Manager, American Medical Response. ATTACHMENTS Rescue Drawing Type I Engine Drawing 100' Aerial Drawing Pierce Manufacturing Proposal Financing Agreement-Oshkosh Capital Pierce Manufacturing Inc. AN OSHKOSH CORPORATION COMPANY • ISO 9001:2000 CERTIFIED 2600 AMERICAN DRIVE POST OFFICE BOX 2017 APPLETON, WISCONSIN 54912-2017 920-832-3000 • FAX 920-832-3208 www.piercemfg.com PROPOSAL FOR PIERCE® FIRE APPARATUS Contra Costa County Fire Protection District DATE November 14, 2014 2010 Geary Road QUOTE NO. 91114-14 Pleasant Hill, CA 94523 EXPIRES December 19, 2014 SALES REP. Ryan Wright The undersigned is prepared to manufacture for you, upon an order being placed by you, for final acceptance by Pierce Manufacturing, Inc., at its home office in Appleton, Wisconsin, the apparatus and equipment herein named and for the following prices: OPTION A: 100% PRE-PAYMENT AT TIME OF CONTRACT SIGNING # Description Each A Nine (9) Velocity 1500 GPM Pumpers 5,062,287.42 B One (1) Velocity Heavy Duty Rescue 627,569.25 C Three (3) 100’ Velocity Tractor Drawn Aerials 3,227,483.52 D PIERCE / GOLDEN STATE DISCOUNT FOR 13 UNIT PURCHASE (100,000.00) E DISCOUNT FOR 100% PRE-PAYMENT AT CONTRACT SIGNING (439,517.90) F APPARATUS COST 8,377,822.29 G State Sales Tax @ 8.50% 712,114.89 H TOTAL PURCHASE PRICE 9,089,937.18 OPTION A - 100% PRE-PAYMENT AT TIME OF CONTRACT SIGNING TERMS AND CONDITIONS: 1) The Contra Costa County FPD shall pay the entire contract amount of $9,089,937.18 within fifteen (15) calendar days of receipt of invoice to Pierce Manufacturing Inc. 2) Customer is entitled to this discount if Oshkosh Capital makes payment on behalf of the customer. Oshkosh Capital shall pay the entire contract amount of $9,089,937.18 within fifteen (15) calendar days of receipt of invoice to Pierce Manufacturing Inc. 3) Proposed delivery timeframe after receipt / acceptance of contract (or purchase order) will not begin until full payment of $9,089,937.18 is received by Pierce Manufacturing Inc. 4) If payment of $9,089,937.18 is late and if the customer elects not to have the delivery extended, $1,850.00 PER CALENDAR DAY will be deducted from the 100% pre-payment discount at time of final invoice. 2 OPTION B: PAYMENT AT TIME OF DELIVERY / ACCEPTANCE # Description Each A Nine (9) Velocity 1500 GPM Pumpers 5,062,287.42 B One (1) Velocity Heavy Duty Rescue 627,569.25 C Three (3) 100’ Velocity Tractor Drawn Aerials 3,227,483.52 D PIERCE / GOLDEN STATE DISCOUNT FOR 13 UNIT PURCHASE (100,000.00) E APPARATUS COST 8,817,340.19 F State Sales Tax @ 8.50% 749,473.92 G TOTAL PURCHASE PRICE 9,566,814.11 Said apparatus and equipment are to be built and shipped in accordance with the specifications hereto attached, delays due to strikes, war, or intentional conflict, failures to obtain chassis, materials, or other causes beyond our control not preventing, within about SEE SEPARATE PROPOSALS calendar days after receipt of this order and the acceptance thereof at our office at Appleton, Wisconsin, and to be delivered to you at CONCORD, CALIFORNIA. 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 alterations do not materially affect the cost of the construction of the apparatus. 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 the time of bid, except as modified by customer specifications. Any increased costs incurred by first party because of future changes in or additions to said DOT or NFPA standards will be passed along to the customers as an addition to the price set forth above. Any Purchase Order (PO) issued as a result of this proposal should be made out to Pierce Manufacturing Inc. Unless accepted by December 19, 2014, the right is reserved to withdraw this proposition. Respectfully Submitted, Authorized Sales Representative December 2, 2014 SALES ORGANIZATION: Golden State Fire - Ryan LESSEE: Contra Costa County FPD TYPE OF EQUIPMENT: Nine (9) Pierce Pumpers, One (1) Heavy Duty Rescue and Three (3) 100’ Velocity Tractor Drawn aerials EQUIPMENT COST: $9,089,937.18 including sales tax and discounts CUSTOMER DOWNPAYMENT: $1,000,000.00 at time of order TRADE-IN: $0.00 DELIVERY TIME: Std delivery PAYMENT MODE: Annual In Arrears FIRST PAYMENT DUE DATE: Upon contract signing with Pierce LEASE COMMENCEMENT DATE: Upon contract signing with Pierce Term Number of Payments Payment Amount / Interest rates A) 10 years 9 annual $1,000,000.00 / 2.349% -due starting August 2015 The above listed payment(s) reflect all program discounts available exclusively through Oshkosh Capital. There are no closing costs or documentation fees associated with the completion of this financing. NOTE: All lease documents must be fully executed within 14 days of the date of this proposal. Failure to receive completed documents may alter the final payment schedule due to changes in rates and/or discounts. PERFORMANCE BOND: To utilize the prepay program, a performance bond is required. Said performance bond shall be paid for directly to Pierce manufacturing or financed by Oshkosh Capital as part of the transaction TYPE OF FINANCING: Tax-exempt Lease Purchase Agreement with a $1.00 buy out option at end of lease term. Said agreement shall be a net lease arrangement whereby lessee is responsible for all costs of operation, maintenance, insurance, and taxes. BANK QUALIFICATION: This proposal assumes that the lessee A) will not issue more than $10 million in tax- exempt debt this calendar year. Furthermore, it is assumed that the lessee will designate this issue as a qualified tax-exempt obligation per the tax act of 1986. LEGAL TITLE: Legal title to the equipment during the lease term shall vest in the lessee, with Oshkosh Capital perfecting a first security interest AUTHORIZED SIGNORS: The lessee's governing board shall provide Oshkosh Capital with its resolution or ordinance authorizing this agreement and shall designate the individual(s) to execute all necessary documents used therein. LEGAL OPINION: The lessee's counsel shall furnish Oshkosh Capital with an opinion covering this transaction and the documents used herein. This opinion shall be in a form and substance satisfactory to Oshkosh Capital. VOLUNTEER FIRE DEPARTMENTS: If Lessee is a Volunteer Fire Department, a public hearing under the requirements of Section 147(f) of the Internal Revenue Code of 1986 shall be conducted to authorize this transaction. It is recommended that a notice of the public hearing be published 10 to 14 days in advance of the public hearing. This proposal will be valid for fourteen (14) days from the above date and is subject to final credit approval by Oshkosh Capital and approval of the lease documents in Oshkosh Capital's sole discretion. To render a credit decision, lessee shall provide Oshkosh Capital with their most recent two years' audited financial statements, copy of their most recent interim financial statement, and current budget. Accepted by: Proposal submitted by: __________________________________________________ _______________ Lessee Date Kim Simon Kim.Simon@oshkoshcapital.com Oshkosh Capital I LocB3-B230-05-07 I 155 East Broad St I Columbus, OH 43215 I Ph: (800) 820-9041, ext. 1 I Fax: (800) 678-0602