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Staff Report PREPARED BY: MATT MORLEY Director of Parks and Public Works Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, and Finance Director 110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 09/19/2017 ITEM NO: 6 DATE: SEPTEMBER 9, 2017 TO: MAYOR AND TOWN COUNCIL FROM: LAUREL PREVETTI, TOWN MANAGER SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT WHEEL LOADER FROM PETERSON CAT IN AN AMOUNT NOT TO EXCEED $179,033 RECOMMENDATION: Authorize the Town Manager to purchase a replacement wheel loader from Peterson CAT in an amount not to exceed $179,033 (Attachment 1). BACKGROUND: As part of the Fiscal Year 2017/18 Operating Budget, the Equipment Replacement Fund was approved, providing funds for replacement of high mileage or older vehicles that have reached their replacement criteria or do not meet federal regulations for emissions. The Town Vehicle and Equipment Acquisition and Replacement Policy (Attachment 2) determines which assets should be replaced by evaluating predetermined age and/or mileage criteria. The Town amortizes a vehicles replacement over the forecast life of that vehicle per the Policy and sets funds aside on an annual basis to allow for the timely replacement of vehicles. This vehicle is fully amortized in the replacement program and all necessary funds are available. The vehicle identified here is a wheel loader which is a diesel motor powered piece of heavy equipment with large wheels and an operable bucket or scoop on the front. This piece of equipment is used for picking up heavy loads of debris or material such as mud, tree trunks, base rock, and other materials. PAGE 2 OF 3 SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT WHEEL LOADER SEPTEMBER 9, 2017 S:\COUNCIL REPORTS\2017\09-19-17\Purchase replacement wheel loader\Staff Report - CAT Final.docx 9/14/2017 10:37 AM SH DISCUSSION: The Parks and Public Works Department currently operates one model year 2000 Caterpillar wheel loader and it is an important piece of equipment used in heavy maintenance operations. Last winter the Town experienced severe weather conditions with a large amount of rain and heavy winds, causing several large mudslides and downed trees throughout the Town. This equipment was essential for staff’s work to clear roads throughout the Town by removing mud, boulders, and downed trees . The proposed wheel loader provides for flexibility to handle both emergency situations and routine maintenance operations. In comparison with the current vehicle, new model years provide for increased lifting capacity and a larger front bucket as well as incorporating new features such as a back-up camera, ergonomic controls, and suspension seating for the operator, which provide for added safety and ergonomics. The current wheel loader has exceeded the identified criteria for replacement of twelve years and/or 7,200 hours, as it is seventeen years old. Although the hours of operation are low (3,500), it exceeds the years of service based on age and technology. The Replacement Policy is designed to replace vehicles and equipment prior to failure to ensure the ability of the Town to provide uninterrupted service. In addition, the new wheel loader will have a fuel-efficient Tier 4, low emission diesel engine. Tier 4 systems reduce nitrogen oxides (NOx) and p articulate matter (PM) in diesel exhaust. The California Air Resources Board (CARB) has linked PM exhaust to lung cancer and damage to the environment. All older diesel engines are required to be upgraded to Tier 4 standards by the year 2020. Staff reviewed multiple equipment manufacturers to determine the best option for replacement and has taken into consideration a number of factors, including uses for the equipment, visibility, serviceability, fuel consumption, and overall costs. Replacement of this vehicle will ensure both compliance with CARB standards and a reliable vehicle to provide timely response to regular and emergency maintenance needs. In accordance with the Town’s Purchasing Policy, Section 7 (Cooperative Purchasing), this purchase is based on a formal bid process completed by the National Joint Powers Alliance (NJPA), which allows for other municipalities to purchase vehicles using their formal bid proposal documents. Local jurisdictions and the City of San Jose use NJPA for a number of vehicle and equipment purchases. Additionally, there is no cost for municipalities to participate in this purchasing program. PAGE 3 OF 3 SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT WHEEL LOADER SEPTEMBER 9, 2017 S:\COUNCIL REPORTS\2017\09-19-17\Purchase replacement wheel loader\Staff Report - CAT Final.docx 9/14/2017 10:37 AM SH CONCLUSION: Staff recommends that the Town Council Authorize the Town Manager to purchase a replacement wheel loader from Peterson CAT in an amount not to exceed $179,033. ALTERNATIVE: Alternatively, the Town Council could direct staff to delay replacement of the equipment. Staff does not recommend this alternative because the current piece of equipment has exceeded its useful life and reliability of this equipment during emergencies is paramount. FISCAL IMPACT: There are sufficient funds available in the Equipment Replacement Fund to purchase the replacement loader. ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachments: 1. Purchase Proposal. 2. Town Vehicle and Equipment Acquisition and Replacement Policy. 3. National Joint Powers Alliance award to Caterpillar Inc.