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Home My WebLink AboutStaff Report 293-05City of Palo Alto City Manager's Report TO: HONORABLE CITY COUNCIL FROM: CITY MANAGER DEPARTMENT: PUBLIC WORKS DATE: JUNE 20, 2005 CMR:293:05 SUBJECT: REVISED VEHICLE REPLACEMENT SCHEDULE FOR PALO ALTO SANITATION COMPANY /WASTE MANAGEMENT This is an informational report and no Council action is required. BACKGROUND The City's agreement with the Palo Alto Sanitation Company/Waste Management.(PASCO) provides for solid waste and recyclable material handling services for the City of Palo Alto. The agreement requires the collector to provide adequate number of vehicles and equipment for the collection, processing and transportation ofthese services. A seven-year vehicle replacement requirement was established in the existing PASCO agreement to maintain a clean & efficient condition and avoid higher operating cost that would be passed onto the City. The agreement requires that all heavy equipment acquired by PASCO on and after September 1, 1999 have a useful life of seven (7) years, depreciated on a straight-line basis. The agreement also requires that PASCO not have trucks older than seven years without the express approval of the Public Works Director. DISCUSSION Each fiscal year during the PASCO compensation review period, the City reviews all vehicles that are reaching the end of its useful life as reported in the PASCO proposed vehicle replacement schedule. The replacement schedule includes collection vehicles for refuse, recycling and yard trimmings as well as spare vehicles or vehicles with low usage/operating hours. In the recent City review, PASCO submitted a request to maintain 16 vehicles past their seven- year useful life because they are spare vehicles, have low usage/operating hours, or their replacement was delayed (Attachment A). These 16 vehicles are fully depreciated and are not incurring additional costs other than minimal maintenance. In addition, these vehicles were purchased prior to the City's agreement starting on September 1, 1999 requiring heavy equipment acquired by PASCO to have a useful life of seven years. The replacement for each vehicle would cost PASCO and then the City, approximately $308,000 depreciated over seven years, plus owed interest, as required in the agreement. For Fiscal Year 05/06, the delayed purchase of the PASCO vehicles would create a savings of over $715,000. Staff determined that the PASCO modified replacement schedule could maintain the vehicles to a high industry standard and in a clean and efficient condition. The Director of Public Works CMR:293:05 Page 1 of2 approved the revised equipment replacement schedule. Staff will continue to review, analyze and recommend changes in future years to the PASCO proposed vehicle replacement schedule. RESOURCE IMPACT Delaying the purchase of the PASCO vehicles is estimated to have created savings of over $715,000 in the 05/06 Fiscal Year to the Refuse Fund. ENVIRONMENTAL IMPACT Approval of PASCO's modified vehicle equipment replacement schedule is not a project under the California Environmental Quality Act (CEQA) and an environmental review is not necessary. ATTACHMENTS Attachment A: PASCO vehicles over the seven-year replacement schedule PREPARED BY: /h JJOJJ/~~ ~GES ' Executive Assistant, Public Works Operations DEPARTMENT HEAD: J:Llfld= CITY MANAGER APPROVAL: EMIL Assistant City Manager CMR:293:05 Page 2 of2 ATTACHMENT A PASCO vehicles over 7 years in service PASCO Vehicle # Year Asset # License # VIN Reason for keeping vehicle in fleet Projected Replacement 1 110 1995 260385 5029193 1CYCCP48X8T041491 Vehicle only covers a partial route and does not get full usage (low hours). Vehicle will become a green waste truck when FY 06-07 routes are restructured in July '05. 2 120 1998 200979 5851066 1 CYFCM481 WT080598 Replacement of unit was delayed due to the upcoming service changes and priority to replace the recycling vehicles with FY 05/06 CNG vehicles. 3 121 1998 200980 5851080 1 CYFCM483WT080599 Replacement of unit was delayed due to the upcoming service changes and priority to replace the recycling vehicles with FY 05/06 CNG vehicles. 4 122 1998 200981 5U50801 1 CYFCM486WT080600 Replacement of unit was delayed due to the upcoming service changes and priority to replace the recycling vehicles with FY 05/06 CNG vehicles. 5 123 1998 200982 5851067 1 CYFCM488WT080601 Replacement of unit was delayed due to the upcoming service changes and priority to replace the recycling vehicles with FY 05/06 CNG vehicles. 6 124 1998 200983 5851081 1 CYFCM48XWT080602 Replacement of unit was delayed due to the upcoming service changes and priority to replace the recycling vehicles with FY 05/06 CNG vehicles. 128 1993 200990 4806574 1 CYGCP482PT080438 This unit is a spare and will be replaced with newer unit once commercial units are replaced. FY05/06 7 129 1993 200984 4806570 1 CYGCP489PT080436 This unit is a spare and will be replaced with newer unit once commercial units are replaced. FY 05/06 8 218 1995 260380 5029281 1 CYCCP48X8T041488 This unit is a spare residential vehicle and does not get full usage (low hours). FY 06/07 9 219 1993 260384 4W19700 1 CYCCP482PT040455 This unit is a spare residential vehicle and does not get full usage (low hours). This is a unit that will more likely be Will not be replaced 10 eliminated to bring our spare ratio into compliance. 301 1995 260378 5072956 1 CYCCP4888T041490 The new program will go into full time service in July.A new CNG will replace this vehicle. FY 04/05 11 302 1996 500413 5L34119 1 CYCAN385TT042500 The new program will go into full time service in July.A new CNG will replace this vehicle. FY04/05 12 N306 1990 501624 3V39583 1 CYCAL285K2037803 This unit is a spare recycling vehicle and does not get full usage (low hours). This is a unit that will more likely be Will not be replaced 13 eliminated to bring our spare ratio into compliance. 309 1995 260379 5072957 1CYCCP4818T041489 This unit is a spare recycling vehicle and does not get full usage (low hours). FY 06/07 14 320 1991 505203 4H55765 1 CYCCP486MT038798 This is a Commercial Recycling cardboard unit. FY 06/07 15 329 1991 505204 4H55764 1 CYCCP488MT038799 This is a Commercial Recycling cardboard unit also used for Commercial Office-Pak and only covers a partial route and FY 06/07 1 16 does not get full usage (low hours). ~------ )