To: Honorable Mayor and Members of Town Council
From: Norris W. Croom III, Chief, Fire and Rescue Department
Through: David L. Corliss, Town Manager
Title
Resolution Approving Two (2) Purchase Agreements Between the Town of Castle Rock and Front Range Fire Apparatus, for the Acquisition of One (1) Pierce Velocity Engine and One (1) Pierce Velocity Platform
Body
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Executive Summary
As part of the vehicle replacement plan, the Fire and Rescue Department is requesting approval to purchase a new engine and one ladder truck. The units being replaced will meet all of the requirements for replacement as outlined in the vehicle replacement policy in 2028. Due to the extended delivery time, we want to order these now understanding that we will not receive them by 2028. The Fire and Rescue Department purchases engines and ladder trucks from Front Range Fire Apparatus/Pierce Manufacturing through HGACBuy cooperative purchasing, which allows for standardization of existing equipment within the fleet. The fleet fund has sufficient funds to purchase this replacement engines, and as the cost is over $250,000.00, we are seeking Council approval of the purchase.
History of Past Town Council, Boards & Commissions, or Other Discussions
Council has previously approved such replacement purchases of fire department vehicles over $250,000.00.
Discussion
Per the department’s vehicle replacement plan, engines and quints are replaced every fifteen years. These units serve ten years as front-line apparatus, and then five years as reserve apparatus. This request is to purchase and replace one engine and one quint that were purchased in 2018. Due to the long lead time for construction and delivery of 43 to 51 months, these replacements need to be ordered now in order to receive them in 2030, which is two years past our typical replacement date.
The department worked with Fleet and Finance to ensure that all purchasing requirements were met, and that funds were available to place this order now. A specification and quote was obtained from Front Range Fire Apparatus for one Pierce Manufacturing Velocity Engine and one Velocity Platform through the HGACBuy cooperative purchasing group plan, and the department is ready to move forward with this purchase in order to secure the current price and a delivery date that meets our future needs.
The department began purchasing Pierce units in 2016 after learning of the success that other local departments had in purchasing, performance, and service of Pierce apparatus. We took delivery of a Pierce hazmat truck in 2016, a Pierce engine in 2017, two Pierce ladder trucks in 2018, and an engine in 2026 for Station 156.
While already conceptually approved in the five-year balanced financial plan as part of the fleet replacement budget, the department is seeking Council approval now to avoid future cost increases and secure a delivery date. Due to fact the expenditure exceeds the $250,000.00 signing limit of the Town Manager, Council approval is required.
Budget Impact
The current quote for both apparatus is $3,880,894.00, with the engine at $1,448,093.00 and the ladder truck at $2,432,801.00. However, the Town can realize additional savings of $460,000.00 if we prepay 100% of the purchase price, reducing the cost to $3,420,894.00. As there may be the possibility of change orders and inflationary costs during the construction process, we are requesting a contingency of $379,106.00, but all efforts will be made to not use the contingency funds in construction. If not used in construction, these funds would then be used to upfit and equip these units when they are delivered. With the addition of the contingency funds, this puts the cost for both apparatus at $3,800,000.00. The contingency funds would not be included in the prepay amount, and would only be spent if needed for change orders during construction.
The Town has chosen to prepay all of our previous purchases from Pierce in order to maximize the savings offered by them. The department is requesting that the Town, again, prepays for these engines in order to realize a savings of $460,000.00. As part of the specification, Pierce is required to purchase a performance bond to cover the Town’s interest in the full amount being spent, thereby reducing the level of risk to the Town. The cost of the performance bond is included in the overall price, so there is no additional cost to the Town.
Funds are available in the fleet replacement budget to purchase these apparatus. The Town budgets for the replacement of vehicles, including fire apparatus, on an annual basis. Funding is set aside every year, in this case for 15 years, for a prorated portion of future replacement costs so that when a vehicle reaches replacement timing, the necessary funds for the replacement have been already set aside for those costs. Although these apparatus are being ordered two years ahead of schedule, there are sufficient funds to purchase them from 2026 budget amendment two, and replacement contributions will continue to be made over the next three years to make the replacement fund whole.
Staff Recommendation
Based on the opportunity for the Town to save $460,000.00, staff recommends approval of the contract and expenditure of funds with the Town prepaying 100% of the cost of the apparatus for a total cost not to exceed $3,800,000.00 without prior written authorization.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Attachments
Attachment A: Resolution
Exhibit 1: Purchase Agreement with Front Range Fire Apparatus/Pierce Manufacturing Platform
Exhibit 2: Purchase Agreement with Front Range Fire Apparatus/Pierce Manufacturing Engine