HomeMy WebLinkAboutStaff Report 11582
City of Palo Alto (ID # 11582)
City Council Staff Report
Report Type: Consent Calendar Meeting Date: 1/11/2021
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Title: Approval of a Purchase Order With Altec Industries in an Amount Not-
to-Exceed $633,866 for the Purchase of two 2022 DH50 Hydraulic Digger
Derrick Rear Mount Crane Trucks, Utilizing a Cooperative Purchasing
Agreement and Funded Under Capital Improvement Project VR-20000
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council approve and authorize the City Manager or his designee to
execute a purchase order with Altec Capital in the amount of $633,866 for the purchase of two
2022 Model DH50 Hydraulic Digger Derrick rear mount crane trucks, utilizing a cooperative
purchase agreement via Sourcewell (formerly NJPA), a cooperative purchasing agency serving
government and not-for-profit organizations.
Background
The Vehicle and Equipment Use, Maintenance, and Replacement Policy section 4-1 provides for
the on-going replacement of City fleet vehicles and equipment. Replacements are scheduled
using guidelines based on age, mileage accumulation, and obsolence. Policy 4-1 prescribes a
replacement interval for trucks with service bodies of ten years or 100,000 miles. Replacement
of these two Digger Derrick trucks was programmed in the FY 2020 Scheduled Vehicle and
Equipment Replacement Capital Improvement Program project (VR-20000).
Discussion
The Utilities Department currently has two Digger Derrick trucks. Vehicle 7602 is a 2005
Peterbilt 335 model that has 12,907 miles, with lifetime maintenance and operation costs
exceeding $190,000. Vehicle 7603 is a 2006 Peterbilt 335 model that has 8,243 miles, with
lifetime maintenance and operation costs exceeding $172,000. These are specialty vehicles,
where mileage is not as crucial as the total hourly run-time of the engine, which powers the
hydraulic systems that allow crew members to complete their daily tasks. These daily tasks
require the vehicle to be stationary and idling the majority of the time reflecting a higher hourly
usage, and wear and tear on the engine, than mileage would indicate.
These vehicles are unique in that they have hydraulic motors with an auger-mounted drill for
penetrating hard soil and dirt, and to convey broken and loose material out of the ground. They
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are needed to perform routine work such as replacing utility poles and digging holes in concrete
foundations for street lights. They are also utilized as first-responder vehicles, responding to
damaged utility poles from vehicle accidents or fallen trees. They also support overhead
powerlines with the use of the on-board crane. These type of vehicles have restored power to
homes, commercial buildings, and cellphone towers during emergency situations throughout
California in fire season, and allow the City to fulfill our mutual aid commitments to our
neighbors as well as agencies throughout the state. Not having these vehicles, or redundancy
within the fleet, will cause delays in outage restoration abilities and potential delays in critical
infrastructure repairs. Staff recommends that Council approve this contract from Sourcewell to
replace vehicles 7602 and 7603.
Replacement of these vehicles is recommended because maintenance costs and vehicle
downtime are increasing. The average annual shop downtime for preventative service and
repair to units 7602 and 7603 in the first ten years was 41.9 hours and the maintenance cost
was $9,246 annually. During the following 4-year period of operation, the average annual shop
downtime increased to 57.8 hours, at a maintenance cost of $18,362 annually. In addition,
vehicle unavailability can lead to lost time for essential operations, delays in critical
infrastructure repairs, and delays in restoring power after outages.
Staff has considered leasing these and other specialty type vehicles. After detailed discussions it
was determined by the City’s Utilities Department and the Fleet Manager that the City should
purchase rather than lease these vehicles, due to a higher overall cost, the lack of maintenance
costs covered within the lease agreements, and the lack of back up equipment being included
within these typical agreements. Leasing options would have been for sixty (60) months at
$5,422 per month totaling $325,320 per vehicle or seventy-two (72) months at $4,588 per
month totaling $330,336 per vehicle, compared to the purchase price of $316,942 per vehicle.
The purchase order version provided in Attachment A has been reduced for printing purposes
and does not include exhibits that provide the Sourcewell cooperative purchasing agreement or
the full Request for Proposals. The full contract with all exhibits can be found here.
Procurement Process
Palo Alto Municipal Code section 2.30.360 (j) allows the use of cooperative purchasing
agreements in lieu of conducting a competitive solicitation. Altec Capital was awarded a
contract by Sourcewell (formerly known as the National Joint Powers Alliance or NJPA), a
cooperative purchasing agency serving governmental, higher education, K-12 education, not-
for-profit, tribal government, and other public agencies. Sourcewell conducted a Request for
Proposals under which Altec Capital was an awarded vendor. To participate under the
cooperative agreement, a Request for Quotation was sent to Sourcewell, and staff received a
quote from Altec Capital on September 2, 2020.
Resource Impact
Funding was approved for the purchase of two 2022 Model DH50 Hydraulic Digger Derrick rear
mount crane trucks in the FY 2020 Scheduled Vehicle and Equipment Replacement Capital
Improvement Program project (VR-20000).
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Stakeholder Engagement
Requests for vehicle replacements are presented to the Fleet Review Committee (FRC) for
approval. FRC approved the replacement of these two vehicles through the scheduled five-year
replacement review.
Policy Implications
The approval of this request to purchase vehicles is consistent with existing City policies,
including the Council-approved Utilities Strategic Plan. The Utilities Strategic Plan includes
operating the electrical distribution system in a cost-effective manner, which includes
investments in vehicles and infrastructure to deliver reliable service.
Environmental Review
This purchase is exempt from the provisions of the California Environmental Quality Act (CEQA)
under Sections 10560 and 10561.
Attachments:
• Attachment A- PO