4.b) Staff Report-Fire Engine �C? \ 1 ��s-r--.�
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SCANDIA
StaffRevort
Date of Meeting: March 12, 2013
To: City Council
From: Kristina Handt, Administrator
Re: Fire Engine
Agenda Item#: 4.b)
Background:
Replacement of Engine 5180 has been scheduled for 2013 in the Capital Improvement Plan.
Engine 5180 was acquired in 1988 and has an estimated useful life of 25 years.
There has been some discussion on how the City's ISO rating may change if we do not replace
Engine 5180. ISO collects information on municipal fire-protection efforts in communities
throughout the United States. In each of those communities, ISO analyzes the relevant data using
their Fire Suppression Rating Schedule(FSRS). They then assign a Public Protection
Classification(PPC) from 1 to 10. Class 1 generally represents superior property fire protection,
and Class 10 indicates that the area's fire-suppression program doesn't meet ISO's minimum
criteria. In 2012,the City of Scandia was awarded a 7/10 Public Protection Classification rating
from ISO. Class 7 applies to those properties within 5 miles of the fire station and Class 10
applies to those more than 5 miles away.
ISO considers the following components in the FSRS:
(1) Receiving and Handling of Fire Alarms-Ten percent of a community's overall score is
based on how well the fire departrnent receives and dispatches fire alarms.
(2) Fire Department (includes equipment,personnel and training)-Fifty percent of the
overall score is based on the fire department.
(3) Water Supply-Forty percent of the overall score is based on the community's water
supply. This part of the survey focuses on whether the community has sufficient water
supply for fire suppression beyond daily maximum consumption. ISO surveys all
components of the water-supply system, including pumps, storage, and filtration.
Given that Scandia does not have hydrants, Engine 5180 is important in meeting water supply
needs at a fire since water has to be transported to the location.
While the change in insurance premium will vary for each property based on its specific criteria,
if the City's ISO rating drops it can impact not only the rate but the ability to get coverage. For
example, fewer insurance companies will quote PPC 10's because the risk is higher. Also,the
impact of a PPC 10 rating will be felt even more amongst the business community.
Issue:
Should Engine 5180 be replaced? If so, decide on specs and financing options.
Proposal Details:
Scandia Fire and Rescue has been working with Custom Fire to put together the specs for a new
engine. A copy of the specs has been emailed out to you and therefore will not be reprinted,
unless specifically requested. The public copy of the agenda materials will include a copy of the
specs. The pricing sheet and options are included in your packet.
Chief Finnegan and members of his staff will be at the work session to answer any questions you
have about the specifications. It is important to remember that this engine is critical to providing
water at fires and also serves as the second medical truck.
Included in your packet is a list of maintenance items that need to be completed on Engine 5180
per Craig Kirvida. Given the age of the truck, the list is quite long.
Fiscal Impact:
Last year, the City Council approved an agreement with the HGAC Cooperative Purchasing
Progam. HGAC has confirmed the pricing supplied by Custom Fire. The total cost is
$344,952.98. T'he base price is $235,290 and options total $107,662.98.
The 2013 budget approved having the new engine purchased using Equipment Replacement
Funds. While the auditor is still completing their work of the 2012 financial statements,the
estimated balance of the Equipment Replacement Fund at the end of 2012 is $221,280. An
additional $100,000 is budgeted for 2013 meaning there would be$321,280 available for
expenses in 2013. The Council will need to decide if the options can be reduced to lower the
price or identify where additional $23,673 will come from (possibilities include unreserved fund
balance, operating budgets, or capital improvement fund).
Rather than paying cash for the fire engine,the Council should consider if it is better off
borrowing funds given the historically low interest rates. An equipment certificate lasting ten
years may be a better way to pay for an asset that will last 25 years. Interest rates on a 10 year
note would range from 2.05%to 3.2%. Annual payments on a$345,000 loan would range from
$35, 0000 to $43,000.
The Council could consider a combination of the two options. Use some cash for the purchase
this year and finance a smaller amount over 10 years.
In a related matter, the City may be able to refinance some current bonds at a lower interest rate
and thereby lower those payrnents beginning in 2014. The City could realize some additional
savings by waiting to get the bonds for the fire engine until the current bonds could be
refinanced. This could occur as early as September. Use of cash flow could allow the fire engine
to be purchased earlier than September and cash would be replenished when the bonds are issued
provided the Council adopted a reimbursing resolution.
Options:
(1) Direct staff to put the approval of the purchase of a new engine and related documents on
a future agenda for a regular Council meeting.
a) Cash purchase in 2013 from the Equipment Replacement Fund and Unreserved
Fund Balance
b) Equipment Certificate purchase
(2) Continue discussion at a future meeting. Note it will take approximately 9 months or
more depending on production schedules and demand to get the new engine after it has
been ordered.
(3) Do not approve the purchase of a new engine
a) Fiac/maintain Engine 5180
b) Operate with only one engine in the fire department
Recommendation:
Option(1)b) combined with refunding of existing bonds.
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��� CONTRACT PRICING WORKSHEET Contract € Date
For MOTOR VEHICLES Only No.: Prepared: :
B°y"'g �Scandia,MN Concraccor: :Custom Fire Apparatus,Inc.
Agency:
conrsM ;James Finnegan,Fire Chief P'�Pa�� `:Wayde Kirvida
Person: By�
Phone: :651-755-8675 Phone: c612-325-1366
Fax: :651-433-4383 FaX: E715-294-2168
Emea: �jim.finnegan@scandiafire.com Emaa: Ewayde@customfire.com
�OM GCOl Description: ;Freightliner�2-door�CustomFIRE pumper,aluminum body,single axle,1500 GPM pump,side mounted
Code:
. . _ _ _ __ _
_ _ _ _ _ _ _._ . _
A.�rodacr�tem Base�7nit l�rtce per�Qntractor's H=GAC Contract: <; $ 235,290
�.Pubtished E3�ptiuns:-Itemize belaw. Attaeh additional sheet(s)if necessacy-Include�gtio�►Code in description:if applicable :'
(�dote:;Publisi�ecl t7pf�ons are opticins which;were sulim�t#ed aiid pnced ia Contraetor's bid,)
Description ; Cost Description ; Cost
see published option list
Subtotal From Additional Sheet(s): 72375
= e ; i a ;Y: � _.:' ;; ; ; , : , . � , i . ">.. i : Subtotal B:c 72375
C.�7�,�t�bGshec�Op#�ans �ieux�beib�v/.�ttae��ilditional st�ei(s):�f�keeess�r3�
(�Tote:L�ngublished�pU�ns are�tems whicli were�ot submitted ariit priced in Contractor's bid)
Description E Cost Description ` Cost
see non published option list
Subtotal From Additional Sheet(s): 35287.98
Subtotal C: ; 35287.98
Check:Total cost of Unpublished Options(C)cannot exceed 25%of the total of the Base Unit� For t6is transaction the percentage is: 11%
Price plus Published Options(A+B).
D.TA�sI Cost Betore Any r�pplica6le Trade-Tn/:�Ither Allowanees:!Disca�ii�ts{�#-3�B+C) ` `
Quantity Ordered: 1 X Subtotal of A+B+C: 342952.98 = Subtotal D: E 342952.98
.H-GAC�rder Processing.Ctiarg�(Amou�E Per�urreiif Policy}: Subtotal E: E 2000
.Traile-Ins 1 Uther Allowances:J�p�ecial biscaunts IFreig�t J Installatioa'
Description Cost Description Cost
Subtotal F: E
': ; Del�v�ry Daite.;; ���'4t�1 Purchase Pr�ce�I.3+��F)' 344952.98
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