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Staff Report PREPARED BY: STEVE REGAN Superintendent Reviewed by: Town Manager, Assistant Town Manager, Town Attorney, Finance Director, and Parks and Public Works Director 110 E. Main Street Los Gatos, CA 95030 ● 408-354-6832 www.losgatosca.gov TOWN OF LOS GATOS COUNCIL AGENDA REPORT MEETING DATE: 05/07/2019 ITEM NO: 7 DATE: APRIL 26, 2019 TO: MAYOR AND TOWN COUNCIL FROM: LAUREL PREVETTI, TOWN MANAGER SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT TEN- WHEEL DUMP TRUCK FROM COAST COUNTIES TRUCK AND EQUIPMENT COMPANY IN AN AMOUNT NOT TO EXCEED $175,068 RECOMMENDATION: Authorize the Town Manager to purchase a replacement ten-wheel dump truck from Coast Counties Truck and Equipment Company in an amount not to exceed $175,068 (Attachment 1). BACKGROUND: As part of the Fiscal Year 2018/19 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 vehicle’s replacement over its forecasted life and sets funds aside on an annual basis to ensure the Equipment Replacement Fund has sufficient resources for the timely replacement of vehicles. In addition, this funding structure allows for a smoothing of operating expenditures and a more accurate reflection of the actual cost of operations. PAGE 2 OF 4 SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT TEN- WHEEL DUMP TRUCK FROM COAST COUNTIES TRUCK AND EQUIPMENT COMPANY IN AN AMOUNT NOT TO EXCEED $175,068 DATE: APRIL 26, 2019 S:\COUNCIL REPORTS\2019\05-07-19\Dump Truck Purchase\Staff Report.docx 5/1/2019 2:08 PM SH BACKGROUND (continued): The Parks and Public Works Department (PPW) currently operates two ten-wheel dump trucks which are used in the Public Works Maintenance Operations to transport materials and tow trailers with large equipment to job sites. The vehicle that staff is proposing to replace is a 1995 diesel motor powered dump truck which is fully amortized in the replacement program and all necessary funds are available. The vehicle is 24 years old and has exceeded the identified criteria for replacement of 15 years and/or 100,000 miles. Although the miles are low (81,100), it exceeds the years of service based on age and technology. The Town Vehicle and Equipment Acquisition and Replacement Policy is designed to replace vehicles and equipment prior to failure to ensure the ability of the Town to provide uninterrupted service. DISCUSSION: The proposed replacement vehicle will have a fuel-efficient Tier 4, low emission diesel engine. Tier 4 systems reduce nitrogen oxides (NOx) and particulate matter (PM) in diesel exhaust. The California Air Resources Board (CARB) has linked particulate matter exhaust to lung cancer and damage to the environment. The 1995 vehicle has a Tier 1 engine. All older diesel engines are required to be upgraded to Tier 4 standards by the year 2020. This replacement will achieve up to 98% reduction in NOx and PM emissions, directly in line with the Town’s Sus tainability Plan. It will also provide for flexibility to handle both emergency situations and routine maintenance operations. The truck capacity allows staff flexibility to transport large loads of materials from suppliers to job sites reducing trips to and from suppliers on a daily basis. Additionally, the vehicle incorporates safety features such as a back-up camera, air ride and ergonomic seating for the operator, and enhanced stabilization dumping features to protect the vehicle from rollovers in the hillsides. In considering new versus used vehicles, a number of factors come into play. There has been an influx of used diesel-powered trucks in the market place due to the clean air guidelines that require fleets to comply with the new Tier 4 engine ratings that take effect in 2020. The types of vehicle that would meet the needs of the Department would be high mileage vehicles not meeting Tier 4 engine ratings. Tier 4 engines for heavy trucks are relatively new ; therefore, the possibility of procuring a used dump truck meeting the current clean air requirement is highly unlikely. A secondary consideration is the overall condition of the vehicle. Used vehicles of this type come with the risk of having been heavily used and improperly maintained. This could lead to PAGE 3 OF 4 SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT TEN- WHEEL DUMP TRUCK FROM COAST COUNTIES TRUCK AND EQUIPMENT COMPANY IN AN AMOUNT NOT TO EXCEED $175,068 DATE: APRIL 26, 2019 S:\COUNCIL REPORTS\2019\05-07-19\Dump Truck Purchase\Staff Report.docx 5/1/2019 2:08 PM SH DISCUSSION (continued): increased maintenance costs, including significant expense in the replacement of major components like transmissions. Availability and longevity are key factors in managing a fleet. Staff reviewed multiple truck manufacturers to determine the best option for replacement. Local jurisdictions such as the Cities of San Jose, Santa Clara, and Santa Clara County have selected Coast Counties Truck and Equipment Company because of their locality in San Jose for parts, service, and warranty. In accordance with the Town’s Purchasing Policy, Section 7 (Cooperative Purchasing), this purchase is based on a formal bid process completed by the Sourcewell purchasing program formerly known as 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 and there is no cost for municipalities to participate in this purchasing program. CONCLUSION: 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. Staff recommends that the Town Council Authorize the Town Manager to purchase a replacement ten-wheel dump truck from Coast Counties Truck and Equipment in an amount not to exceed $175,068. ALTERNATIVE: Alternatively, the Town Council could direct staff to delay replacement of the equipment. Staff does not recommend this alternative as the vehicle has reached the end of its useful life and the lack of a replacement vehicle will impact daily productivity in PPW maintenance operations. If it is not replaced, the Town would incur expenses in 2020 to meet the CARB standards for th e old truck without the certainty of return on investment given the vehicle’s age. FISCAL IMPACT: There are sufficient funds available in the Equipment Replacement Fund to purchase this vehicle. PAGE 4 OF 4 SUBJECT: AUTHORIZE THE TOWN MANAGER TO PURCHASE A REPLACEMENT TEN- WHEEL DUMP TRUCK FROM COAST COUNTIES TRUCK AND EQUIPMENT COMPANY IN AN AMOUNT NOT TO EXCEED $175,068 DATE: APRIL 26, 2019 S:\COUNCIL REPORTS\2019\05-07-19\Dump Truck Purchase\Staff Report.docx 5/1/2019 2:08 PM SH ENVIRONMENTAL ASSESSMENT: This is not a project defined under CEQA, and no further action is required. Attachments: 1. Coast Counties Quote. 2. Town Vehicle and Equipment Acquisition and Replacement Policy.