HomeMy WebLinkAboutStaff Report 13430
City of Palo Alto (ID # 13430)
City Council Staff Report
Meeting Date: 12/6/2021
City of Palo Alto Page 1
Title: Approval of a Purchase Order with Interstate Truck Center d/b/a Valley
Peterbilt in an Amount Not-to-Exceed $391,002 for the Purchase of a 2023
Peterbilt 537 with an American Truck and Trailer Body Service Body, Utilizing
a Sourcewell Cooperative Purchase Agreement; and Approval of a Fiscal Year
2022 Budget Amendments in the Vehicle Replacement and Maintenance
Fund Scheduled Vehicle and Equipment Replacement Capital Project (VR-
22000) and the Gas Fund
From: City Manager
Lead Department: Public Works
Recommendation
Staff recommends that Council:
1. Approve and authorize the City Manager or their designee to execute a purchase
order with Interstate Truck Center d/b/a/ Valley Peterbilt in the amount of $391,002
for the purchase of a 2023 Peterbilt 537 Extended Cab Chassis with American Truck
and Trailer Body Maintenance, Construction Service Body, utilizing cooperative
purchase agreement number 060920 between Peterbilt Motors Company and
Sourcewell, a government agency and service cooperative that offers cooperative
procurement solutions to government entities; and
2. Amend the Fiscal Year 2022 Budget Appropriation (by a 2/3 vote) for
a. the Gas Fund by:
i. Increasing the transfer to the Vehicle Replacement and Maintenance Fund
in the amount of $191,002; and
ii. Decreasing the Ending Fund Balance in the amount of $191,002; and
b. the Vehicle Replacement and Maintenance Fund by:
i. Increasing the transfer from the Gas Fund by $191,002; and
ii. Increasing the Scheduled Vehicle and Equipment Replacement Fiscal Year
2022 project (VR-22000) in the amount of $191,002.
Background
The Vehicle and Equipment Use, Maintenance, and Replacement policy section 4-1 provides for
the ongoing replacement of City fleet vehicles and equipment. Replacements are scheduled
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using guidelines based on age, mileage accumulation, and obsolescence. Policy 4-1 prescribes a
replacement interval for trucks with diesel engines of ten (10) years or 100,000 miles.
Unit 8792 is a 2007 Freightliner M2 106 with a utility body, operated by Utilities Water, Gas,
Wastewater (WGW), and is over 14 years old with over 32,000 miles. The engine has total run
hours of 5,409 which is equivalent to approximately 324,540 miles. Lifetime maintenance and
operation costs have exceeded $248,000. This vehicle was approved for replacement in the
Fiscal Year 2022 capital budget in the Scheduled Vehicle and Equipment Replacement Fiscal
Year 2022 capital project (VR-22000).
The City’s fleet currently includes four utility service trucks for WGW (units 8792, 8731, 8723,
and 8212). In 2007, unit 8792 was upgraded from its smaller Ford chassis to its current
Freightliner chassis, and in 2017, the three other trucks were replaced and upgraded from the
Chevrolet/GMC utility body to the larger Peterbilt 337 chassis. These larger trucks have proven
more efficient for the work group, as the previous trucks were undersized and not equipped to
carry the loads associated with the necessary utility tools and equipment each crew needs for
field work. Additionally, the smaller trucks did not have adequate towing capacity for some of
the larger specialized trailers.
Discussion
Replacing unit 8792 with a Peterbilt 537 chassis (the 337 model was replaced by the 537 model)
and matching service body, as equipped on the three corresponding trucks, aligns with the
City’s vehicle and equipment standardization guidelines pertaining to heavy duty service trucks
within WGW. Maintenance costs will be reduced by not having to procure specialized
equipment and software for two different make/model trucks. Also, Fleet has found that the
servicability of the Peterbilt, both during and outside of its warranty period, provides much less
downtime to the user department than the Freightliner chassis. This is due to Peterbilt’s better
parts accessibility and closer dealer location. The fully outfitted Peterbilt trucks are equipped to
eliminate inefficiencies, and are the industry standard for underground utility work.
Procurement Process
Palo Alto Municipal Code section 2.30.360(j) authorizes the use of Intergovernmental
Cooperative Purchasing agreements in lieu of conducting a competitive solicitation. A quote
from Interstate Truck Center d/b/a/ Valley Peterbilt was obtained through Sourcewell on
October 12, 2021, utilizing cooperative purchase agreement number 060920 between Peterbilt
Motors Company and Sourcewell, a government agency and service cooperative that offers
cooperative procurement solutions to government entities. The quote from Interstate Truck
Center d/b/a Valley Peterbilt (Sourcewell Contract Quote) for the Peterbilt truck came in at
$391,001. The Peterbilt Motors Company – Sourcewell cooperative purchasing contract is valid
through August 1, 2024 (Sourcewell Contract).
If this request is not approved, we will no longer have the option of purchasing this 2023 model
Peterbilt chassis. Staff would have to request a new specification for a 2024, or later year
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model and return to Council for approval. This would further increase the cost and delay the
delivery of this new vehicle. Staff recommends that Council approve this agreement (PO
4522000178) with Interstate Truck Center d/b/a/ Valley Peterbilt for the purchase of one new
2023 Peterbilt 537 Extended Cab Chassis with American Truck and Trailer Body Maintenance,
Construction Service Body.
Resource Impact
The Vehicle Replacement Fund does not have sufficient funding to purchase this vehicle.
Traditionally, vehicle procurements are pre-funded through annual charges to the
department/fund that benefits from the vehicle. In this instance, $200,000 was allocated for
the replacement of this vehicle in the Fiscal Year 2022 budget for VR-22000. There were two
components to this existing build, the chassis and the body. Unfortunately, the amount
collected for replacement was not escalated off of the full original purchase price. The chassis,
which made up over 33% of the original cost, was not included. Further, there have been
increased costs associated with things such as materials and components for this build,
regulatory requirements mandating that the manufacturers offer a longer emissions warranty,
and a global supply chain surcharge. To support this purchase, an appropriation of $191,002 to
the Scheduled Vehicle and Equipment Replacement Fiscal Year 2022 CIP project (VR-22000) in
the Vehicle Replacement and Maintenance Fund, offset by a transfer of $191,002 from the Gas
Fund, is recommended.
Stakeholder Engagement
Requests for vehicle replacements are presented to the Fleet Review Committee (FRC) for
approval. FRC approved the replacement of this vehicle through the scheduled five-year
replacement review. Fleet staff also worked with Utilities WGW staff in order to communicate
the additional funnding need from the Gas Fund for this replacement.
Policy Implications
Authorization of the contract does not represent any change to existing policies.
Environmental Review
The vehicle being supplied is in conformance with all applicable emissions laws and regulations.
Accordingly, this purchase is exempt from the California Environmental Quality Act under CEQA
guidelines (Section 15061).
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