Memorandum

Lawrence-Douglas County

Fire Medical

TO:	Tom Markus, City Manager
FROM:	Mark Bradford, Fire Chief
CC:	Diane Stoddard, Assistant City Manager
	Casey Toomay, Assistant City Manager
	Brian Kidney, Finance Director
	Robert Arron, Central Garage Superintendent
	Bill Stark, Division Chief
DATE:	May 2, 2016
RE:	2016 Fire Apparatus Purchase

Program Introduction and History

In 2006, the Fire Medical (FM) Department began a review of its fire apparatus fleet.  The efforts of city staff culminated in a comprehensive vehicle study that included a survey of all primary and secondary fire apparatus, an overview of the organizational and city commission goals and service demands of FM, a comparative analysis of the fire apparatus replacement programs in other jurisdictions, and a proposed apparatus replacement schedule.

The department’s vehicle replacement program outlines the order of vehicle replacement based on the overall replacement score as determined by the Public Works Vehicle Maintenance Department and operational efficiency.

Program Details – 2016 Vehicle Replacement Request:

As part of the department’s apparatus replacement program, it is recommended that we replace a 2006 Crimson freightliner M2 Engine that meets or exceeds the replacement policy.

Program Funding

Initially, the 2008 multiyear sales tax program projected $500,000 annually for fire equipment replacement.  The vehicle replacement plan anticipated that total equipment replacement costs would be greater than sales tax proceeds, which would require additional funding sources.  We have conducted a financing analysis that included purchase/cash, purchases/General Obligation Bond (GO) debt, lease, or lease/purchase of the equipment.  The cost analysis indicates a 12-year debt issuance as the best option to meet the designated useful life expectancy.  Historically, the city has used cash, cash with GO Bond issuance or full GO Bond issuance for purchasing.  Currently there are no sales tax dollars available and 100% of the cost would be covered through GO Bond debt.

“Prepaying” the purchase of this vehicle would result in a saving of $38,179.99.  This savings is due to the apparatus manufacturer paying for the major components (chassis and body) as they are constructed. The prepay option was evaluated and is recommended as a cost savings.

In addition, we receive annual funding from Grant Township as part of our fire response agreement.  In the past we have used these funds to purchase a large tank apparatus to be used in rural locations where there is no fire hydrant coverage.

Prepay – Trade-In Discount Calculation

Contract Price	$874,210.00
Interest Discount	(25,669.99)
Chassis Discount	(12,510.00)
Trade-In	(100,000.00)
Final Cost	$736,030.01

Action Request

Fire Medical Department staff requests the approval for the following:

· Utilize the Houston Galveston Area Council contract administered by MARC for pricing quotes;

· Purchase through Pre-Pay:  One (1) 2016 Velocity PUC Engine from Pierce Manufacturing in the amount of $736,030.01;

· Accept trade-in of 2006 Crimson Engine VIN:  1FVHCYDAX6HV10267 for $100,000 from Pierce Manufacturing;

· Adopt Resolution No. 7163, providing for acquisition of fire equipment and for providing for the issuance of General Obligation Bonds of the City to pay the cost of such equipment in the amount of $736,030.01.