May 1, 2006

REPORT TO GENERAL COMMITTEE

SUBJECT: Purchase of Fire Pumpers & Apparatus – Preferred Supplier

CONTACT/AUTHOR: Bill Snowball

Deputy Fire Chief x5982

RECOMMENDATION:

THAT Council authorize the Fire Chief and the Manager of Purchasing to enter into a sales agreement with Safetek Emergency Vehicles, as the Canadian sales distributor for Smeal Fire Apparatus Co. (Inc.), Nebraska U.S.A., for the purchase of two (2) - Pumper Fire Apparatus for an amount not to exceed $1,300,000 inclusive of import fees;

AND THAT $750,000 of the funding for the pumper replacements be funded from the 2006 Fleet capital account 57-6150-7112-005;

AND THAT the 2006 Fleet capital account 57-6150-7112-005 be amended to include one additional pumper replacement;

AND THAT the shortfall in funding in the amount of $550,000 be provided for from the Life Cycle Replacement and Capital Reserve;

AND THAT pumper 921 and pumper 941 be disposed of in accordance with the Purchasing by-law 2004-341 upon receipt of the two new pumpers.

PURPOSE:

To authorize the purchase of two (2) Pumper Fire Apparatus from Safetek Emergency Vehicles as the Canadian sales distributor for Smeal Fire Apparatus Co. (Inc.), Nebraska U.S.A.

BACKGROUND:

In November of 2001 Council passed a report approving the standardization of the fire apparatus fleet and the preferred supplier purchase of fire vehicles and apparatus from Smeal Fire Apparatus through their Canadian Distributor Safetek Emergency Vehicles for a period of five years. To date the Town has purchased 2 Aerial apparatus and 5 Pumpers.

Currently we have completed the standardization of front run fire apparatus with the exceptions of pumper 921 and 941. Manufacturers are making significant technical changes to fire apparatus in 2007, resulting in a substantial price increase for any orders placed after May 2006. Pumper 941 (1995) and Pumper 921 (1996) are scheduled in the Life Cycle Replacement Program to be replaced in 2006 and 2007 respectively. Pumper 941 was originally scheduled for replacement in 2005 but was extended by an additional year. Considering the 350 to 400 day build cycle for a fire pumper, delivery will not be possible until 2007 if trucks are ordered this quarter.

With the manufacturers’ changes occurring in 2007 it is recommended by the fire department and fleet manager that these 2 vehicles be ordered now with 2006 models. The replacement of these vehicles would simplify maintenance as all fire apparatus would be the same. Waiting until the 2007 model year is available would require a change in the configuration of the body and training for maintaining and repair of these new vehicles.

The fire department was not made aware of the manufacturing changes until December 2005 so this information was not available during the 2006 capital budget process.

The committee researched the standards for fire apparatus including but not limited to N.F.P.A. 1901, U.L.C. 320U6.1 and U.L.C. S515.

At the Council meeting on November 27, 2001, Council approved Clause 7 of Report No. 73, which reads as follows;

“The Markham Fire and Emergency Services be authorized to proceed with the standardization of the fire apparatus fleet and that a single source of fire vehicles and apparatus be approved for a period of five (5) years;

And that Council authorize the Fire Chief, the Manager of Purchasing and a representative from the Finance Department to negotiate with Safetek Emergency Vehicles as the Canadian sales distributor for Smeal Fire Apparatus Co. (Inc.), Nebraska U.S.A.”

In February 2002 a Fleet Specification Committee was formed to provide recommendations for a new fleet of Pumper type vehicles based on our current and anticipated levels of service, gap analysis of current and desired state of apparatus, requirements to reach desired state, and safety standards regarding performance, as well as, practical concerns. The Committee identified a need to purchase new pumper trucks to continue the standardization our aging fleet.

FINANCIAL CONSIDERATIONS:

Due to the technical changes to the motors and the required reconfiguration of the bodies of the apparatus to accommodate these changes a minimum of a 7% price increase per unit is anticipated. By ordering these units now a minimum savings of $37,000 can be realized per unit ($530,000 per unit X 7%).

In 2002, four fire pumpers were purchased from Safetek Emergency Vehicles for approximately $600,000 (Canadian) each. In 2005 the Town purchased one pumper for approximately $530,000 (Canadian) as result of the favourable U.S. exchange rate.

The cost of the new vehicles is estimated to be $530,000. Final costs are dependent upon negotiation with Safetek by the Purchasing Manager and the U.S.-Canadian dollar exchange rate at the time of the deposit. Once delivered, an estimated additional $120,000 per unit is required for ancillary pumper equipment such as fire hoses and nozzles.

The total cost to replace both pumpers is estimated to be $1,300,000 (2 pumpers X ($530,000 + $120,000)).

Replacement for pumper 941 is included in the 2006 Fleet capital project (account 57-6150-7112-005) in the amount of $750,000.

The Life Cycle Replacement model identifies replacement of pumper 921 in 2007. Due to the 350 day build cycle, new pumpers ordered now would be delivered in mid 2007. It is recommended that capital project 57-6150-7112-005 be amended to include one additional pumper, to replace pumper 921. Funding in the amount of $550,000 ($1,300,000 - $750,000) will be provided from the Life Cycle Replacement and Capital Reserve.

Although possession of the new fire pumper apparatus is not expected until 2007, payments are required in 2006, as outlined in the Payment Information section (below).

Pumper 921 and 941 will be disposed of in accordance with By-Law 2004-341 (Purchasing By-Law) upon receipt of the two new pumpers.

Payment Information

A 10% down payment of the contract to secure the fixed exchange rate.
A payment for the two (2) Spartan custom cab and chassis upon completion at Spartan Motors.
The balance payable upon delivery and acceptance to Markham Fire and Emergency Services.

OPTIONS/DISCUSSION:

In 2007 the engines we are currently purchasing will undergo significant technical changes which will result in changes to the design and configuration of the bodies of the apparatus. In keeping with the Council resolution of November 27, 2001 purchasing these two pumpers now will allow for the completion of the standardization of the fleet prior to the technical changes. With the exceptions of any new apparatus required for new fire stations the Town will not need to replace any of the current apparatus before 2012. The fire department will be working with the fleet manager to bring a report forward outlining a life cycle replacement strategy based on the status of the fleet, call volume and cost benefit to the Town. As well as the savings mentioned earlier there are also savings realized by not having to train staff (firefighters & mechanics) to operate and maintain different apparatus.

When the Town needs to replace apparatus several years will have passed allowing time for any problems with the new technology and body configurations to have been resolved. Purchasing the pumpers now will also result in savings as there will not be a need to purchase new tools and diagnostic instruments for these pumpers at this time.

Don McClean

Fire Chief

Jim Sales, Commissioner

Community & Fire Services