Agenda Item Wording:
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Authorize the City Manager to award a contract to purchase seven (7) diesel-powered solid waste trucks to E.M. Tharp of Porterville, CA. through the Sourcewell Cooperative contract for a total purchase price of $2,770,743 and appropriate an additional $329,447 from the Solid Waste Enterprise Fund (441).
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Deadline for Action: None
Submitting Department: Public Works
Contact Name and Phone Number: Jason Serpa, Public Works Manager, jason.serpa@visalia.city, 713-4533 Nick Bartsch, Public Works Director, nick.bartsch@visalia.city, 713-4052
Department Recommendation:
Staff recommends that the City Council authorize the City Manager to award a contract to E.M. Tharp Inc. of Porterville, CA for the purchase and delivery of seven (7) diesel-powered solid waste trucks in the amount of $2,770,743, and appropriate an additional $329,447 from the Solid Waste Enterprise Fund (441).
Background Discussion:
In accordance with the replacement schedule set by the City’s Capital Improvement Program,
the Solid Waste Division within the Public Works Department is seeking the authorization to
replace seven (7) solid waste trucks that were included in the FY 21/22 Budget. Due to supply constraints, the City had to wait until now (FY 22/23) to complete the order. The trucks to be replaced are as follows:
(1) Commercial Front Loader (VH0031)
(5) Residential Side Loader (VH0037)
(1) Commercial Roll Off (VH0042)
In the past, the City has utilized Congested Mitigation & Air Quality (CMAQ) funds to supplement costs to purchase Compressed Natural Gas (CNG) solid waste vehicles. Because this type of funding not available at this time, staff is recommending that the City retain a more diversified fleet by purchasing diesel-powered vehicles. With this purchase of (7) diesel-powered trucks, the Solid Waste fleet will be comprised of 25% Diesel and 75% CNG (15 units and 46 units, respectively). An environmental carbon footprint justification has been provided within this report.
E.M. Tharp is the Peterbilt chassis dealer in the area and will coordinate with Ruckstell, Inc. out of Fresno, CA to install the truck bodies. Ruckstell is the only Heil and New Way body dealer in the Central Valley and also has a Sourcewell Cooperative contract.
Sourcewell Cooperative Purchasing helps the City save time and money by purchasing from ready to use, competitively solicited contracts. Cooperative Purchasing is “Procurement conducted by, or on behalf of, one or more Public Procurement Units,” as defined by the American Bar Association Model Procurement Code for State and Local Governments. Sourcewell streamlines the purchasing process by developing Requests for Purchase for national competitive solicitations that meet or exceed local requirements. Because E.M. Tharp is the Peterbuilt dealer in Tulare County, and Peterbuilt Trucks are already competitively bid by Sourcewell, the City is able to utilize that contract to obtain the Sourcewell price. This helps the City maintain a uniform fleet by using the same truck and body manufacturers available through a local dealer, thus keeping maintenance costs down for fleet maintenance and repair.
The Visalia Solid Waste Division operates a fleet of 61 trucks, including: (19) commercial front-load trucks, (5) roll-off trucks, and (37) residential side-load trucks. The current replacement program for a solid waste truck is 10 years. As mentioned previously, the seven trucks being replaced were included in the FY 21/22 budget, but at that time, the manufacturer’s availability only allowed the City to order two of the nine trucks budgeted for that year. The trucks being replaced have been in operation for 12-13 years.
Over the last four fiscal years, the Solid Waste Division has replaced (38) refuse trucks, thus improving the City’s fleet to more current standards and greater operational efficiency and effectiveness. The replacement schedule that pertains to this report and for the future is as follows:
FY 21/22: (9) trucks (only 2 were available for order)
FY 22/23: No replacement (The remaining seven trucks from 21/22 are included in this report.)
FY 23/24: (5) trucks
FY 24/25: (5) trucks
FY 25/26: (6) trucks
Diesel versus Compressed Natural Gas
The Solid Waste and Fleet Divisions are recommending that these trucks being purchased be diesel engine operated due to the historically lower repair costs and reduced downtime. In addition, the total purchase price for the diesel refuse trucks is $871,063 less than the Compressed Natural Gas (CNG) fuel system alternative. Because there is no Congested Mitigation & Air Quality (CMAQ) funding available to offset the cost of CNG trucks at this time, staff concurs with this recommendation that will initially save the Solid Waste Enterprise Fund an average of $124,438 per vehicle. In the future, staff will continue to revisit the availability of CMAQ funding to ensure the City is utilizing all sources of offsetting revenue. It is important to note that CMAQ funds, when available, can only be used to replace diesel engine trucks. The City Council approved the purchase of (6) diesel replacement trucks on June 7, 2021 for the first time since 2004 when CNG replacements have been utilized. An additional (2) diesel trucks were approved on May 16, 2022.
Since diesel fuel costs have decreased over the last year, the conversation over CNG being a cost-effective alternative has become less of a factor. The Fleet Division prefers diesel engines due to their lower cost of repair, ease of repair, and overall reduced downtime. Because the Fleet Division has a limited staff, reduced repair time helps avoid the cost of hiring additional fleet mechanics in the future. Fleet has indicated that CNG fuel powered trucks break down 3 to 1 in frequency compared to the diesel engine alternative and have the potential of costing more when they get older due to higher operating temperatures.
Repair maintenance cost comparison based on real history for two solid waste trucks:
2003 Volvo Diesel Lifetime Repair Cost $252,122 (replaced in FY20/21)
2009 Peterbilt CNG Lifetime Repair Cost $391,817 (still in service - replacement due)
Fuel Cost Difference per gallon:
Diesel per gallon $3.73
CNG per gallon (DGE - Diesel Gallon Equivalent) $2.48
Fuel Consumption Difference per year (based on 264 operating days):
Diesel @ 30 gallons per day = $29,542 yearly cost
CNG @ 50 DGE per day = $32,736 yearly cost
Based on these calculations, a CNG truck would cost on average $124,438 more to purchase initially, could cost 60% more to repair, and could cost approximately $3,200 more per year in fuel based on current diesel and CNG prices. What cannot be quantified is the potential vehicle down time, loss of efficiency, and decreased customer service. Fleet staff has indicated that the downtime of CNG is significantly greater than diesel trucks due to the maintenance of components that simply do not exist on diesel trucks. Based on this analysis, staff is recommending the purchase of the diesel-powered vehicles.
Carbon Footprint:
CNG engines reduce greenhouse gas (GHG) and CO2 emissions by up to 20 percent compared to older diesel engines. However, diesel engines have made strides in clean technology and fuel efficiency. For example, Freightliner’s Selective Catalytic Reduction (SCR) and BlueTec® Emissions Technology were designed to ensure trucks exceed EPA standards by reducing pollutants, increasing truck performance, and improving truck cost efficiency. These advanced diesel engines minimize the production of emissions through efficient combustion.
Because of the newer diesel and CNG technologies, there is still a debate on whether CNG is better for our environment since they exceed diesel engines in methane production. Even though methane remains in the atmosphere significantly less time than CO2, methane’s high potency as a greenhouse gas remains a high concern with some experts stating the difference as inconclusive until more time has passed and therefore more data is available.
Currently, the new Cummins Westport CNG engine is the lowest Nitrogen Oxide (NOx) producing engine for solid waste collection vehicles. The Valley Air Pollution District states that it is ten times cleaner than the older CNG engines and the current diesel engines.
Fiscal Impact:
The City's Capital Improvement Plan included $3,136,000 to purchase 9 vehicles for the fiscal year 21/22 (Various projects: VH0031, VH0037, VH0042). Due to availability constraints, only two were available for order last year and the remaining seven are available now for order.
VH0031 - $666,000 Total CIP Budget for two trucks. One truck was already ordered on this CIP in May 2022 for $317,806. This left a remaining CIP budget balance of $348,194. Total cost for the remaining front load truck is $395,741.
VH0037 - $2,214,000 Total CIP Budget for six trucks. One truck was already ordered on this CIP in May 2022 for $364,420. This left a remaining CIP budget balance of $1,849,580. Total cost for the remaining 5 side load trucks is $2,131,480.
VH0042 - $256,000 Total CIP Budget for one roll off truck. Total cost for one truck for this purchase is $243,522.
This purchase will be (7) trucks available to the City at this time and will be paid for by the Solid Waste Enterprise Fund (441). Staff is requesting to appropriate the shortfall of $47,547 for CIP Project# VH0031 and $281,900 for CIP Project# VH0037 for a total of $329,447 from the Solid Waste Enterprise Fund (441). Any remaining funds, including proceeds from auctioning off old vehicles, will return to the Solid Waste Fund (441).
Prior Council Action: May 20, 2019 Award Purchase of 4 CNG refuse trucks to E.M. Tharp. January 6, 2020 Award Purchase of 13 CNG refuse trucks to E.M. Tharp. May 18, 2020 Award Purchase of 13 CNG refuse trucks to E.M. Tharp. June 7, 2021 Award Purchase of 6 Diesel refuse trucks to E.M. Tharp. May 16, 2022 Award Purchase of 2 Diesel refuse trucks to E.M. Tharp.
Other: N/A
Alternatives: Alternative #1: Purchase CNG powered trucks in lieu of diesel-powered engines at a premium of the amounts listed below per truck type. All other operational truck equipment remains the same. Front Load Truck - $72,871 additional per truck (1 Truck) Side Load Truck - $145,446 additional per truck (5 trucks) Roll Off Truck - $85,962 additional per truck (1 Truck). Alternative #2: Choose not to authorize the use of Sourcewell’s national cooperative agreement with E.M. Tharp, Inc. This is not recommended as there can be significant delays with the procurement of vehicles. This may result in higher maintenance costs to keep older vehicles operating in the meantime.
Recommended Motion (and Alternative Motions if expected):
recommendation
I move to authorize the City Manager to award a contract to E.M. Tharp Inc. of Porterville, CA for the purchase and delivery of (7) diesel-powered Solid Waste Trucks in the amount of $2,770,743 and appropriate an additional $329,447 from the Solid Waste Enterprise Fund (441).
Alternative Motion: I move to authorize the City Manager to award a contract to E.M. Tharp Inc. of Porterville, CA for the supply and delivery of (7) CNG-powered Solid Waste Trucks in the amount of $3,656,806 and appropriate an additional $1,215,510 from the Solid Waste Enterprise Fund (441).
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Environmental Assessment Status: The Citizens Advisory Committee has received a presentation of the diesel and Compressed Natural Gas (CNG) environmental impacts, and has approved of the diesel truck purchase as presented in this staff report.
CEQA Review: N/A
Attachments: Sourcewell Pricing Quote - Side Load Truck (Diesel) Sourcewell Pricing Quote - Front Load Truck (Diesel) Sourcewell Pricing Quote - Roll Off Truck (Diesel) Sourcewell Pricing Quote - Side Load Truck (CNG) Sourcewell Pricing Quote - Front Load Truck (CNG) Sourcewell Pricing Quote - Roll Off Truck (CNG)