Agenda Item Wording:
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Authorize City Manager to award a contract to purchase two (2) diesel solid waste trucks to E.M. Tharp of Porterville, CA. through Sourcewell Cooperative contract for a total purchase price of $682,226 (VH0031, VH0037).
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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
Wyndi Ferguson, Interim Public Works Director, wyndi.ferguson@visalia.city, 713-4186
Department Recommendation:
Staff recommends City Council authorize the City Manager to award a contract to E.M. Tharp Inc. of Porterville, CA for supply and delivery of two (2) diesel solid waste trucks in the amount of $682,226 which is currently budgeted in 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 two (2) solid waste trucks as included in the 21/22 Budget. The trucks being replaced are as follows:
1 Commercial Front Loader (VH0031)
1 Residential Side Loader (VH0037)
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. Staff is recommending retaining a diversified fleet and purchasing diesel vehicles. After this purchase of 2 diesel trucks, the Solid Waste fleet mix will be 13% Diesel and 87% CNG (8 units and 53 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 “piggyback” on that contract and get a Sourcewell price. This helps the City keep the fleet uniform by using the same truck dealer, thus keeping maintenance costs down for fleet repair training.
The Visalia Solid Waste Division operates a fleet of 61 trucks, including 19 commercial front loaders, 5 roll off trucks, and 37 residential side load trucks. The current replacement program for our solid waste truck fleet is 10 years. The 2 trucks being replaced have an age of 12 years and are included in the 21/22 budget. The budget is approved to replace 9 trucks, however, only 2 are currently available to be ordered due to the national supply shortage of trucks and autos in general. The remaining 7 trucks will be purchased as trucks become available.
Over the last three fiscal years, the Solid Waste Division has replaced 36 refuse trucks improving our fleet to more current standards and greater operational efficiency and effectiveness. The replacement schedule for the future is as follows:
FY 21/22: 9 trucks (2 are included in this staff report)
FY 22/23: No replacement
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 have recommended these trucks to be diesel engine operated due to lower repair cost and reduced downtime. In addition, the purchase price for a diesel refuse truck is $70,220 less than a Compressed Natural Gas (CNG) fuel system. Since there is no Congested Mitigation & Air Quality (CMAQ) funding to offset the cost of a purchase of CNG trucks at this time, staff concurs with this recommendation that will save the Solid Waste Enterprise Fund $140,440 for the purchase of these 2 vehicles alone. For future purchases, staff will always revisit the availability of CMAQ funding to ensure the City is utilizing all sources of offsetting revenue. An important note is that CMAQ funds, when available, can only be used to replace diesel engine trucks. City Council approved the purchase of 6 diesel replacement trucks on June 7, 2021 for the first time since 2004 when CNG replacements were utilized.
For comparison, the cost difference of a diesel and a CNG fuel system vehicle has its positives and negatives. With the current rising diesel fuel costs, the conversation of CNG being a cost-effective alternative comes to the forefront, but the repairs can be significantly more. Fleet prefers diesel engines due to their ease of repair and reduced downtime. Because the Fleet Division has a limited staff, reduced repair time helps stay 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 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 $6.20
CNG per gallon (DGE - Diesel Gallon Equivalent) $2.70
Fuel Consumption Difference per year (based on 264 operating days):
Diesel @ 30 gallons per day = $49,104 yearly cost
CNG @ 50 DGE per day = $35,640 yearly cost
Based on these calculations, the CNG truck would cost $70,000 more to buy at this time and could cost 60% more to repair, but could save $13,464 a year based on current diesel prices, which are expected to drop in the future. What cannot be calculated is the vehicle down time and loss of efficiency and customer service. Fleet staff has indicated that the downtime of CNG is significantly greater than diesel trucks due to the maintenance of components that do not exist on diesel trucks. Based on this analysis, staff is recommending the purchase of the Diesel vehicles.
Carbon Footprint:
CNG engines reduce greenhouse gas (GHG) and CO2 emissions by up to 20 percent compared to 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 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.
Fiscal Impact:
The City's Capital Improvement Plan includes $2,880,000 to purchase 9 vehicles for this fiscal year (Various projects: VH0031, VH0037). Due to availability constraints, only two are available for order.
VH0031 - $666,000 Total CIP Budget for two trucks. Total cost for one truck on this purchase $317,806.
VH0037 - $2,214,000 Total CIP Budget for six trucks. Total cost for one truck for this purchase $364,420.
This purchase will be only for the 2 trucks available to the City at this time and will be paid for by the Solid Waste Enterprise Fund (441). The 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.
Other:
N/A
Alternatives:
Alternative #1: Purchase CNG powered trucks in lieu of diesel-powered engines at a premium of $70,220 per truck. All other operational truck equipment remains the same.
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 2 CNG powered Solid Waste Trucks in the amount of $822,666.
Alternative #2: Choose to not 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 in the meantime for the older vehicles still operating.
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 supply and delivery of 2 diesel Solid Waste Trucks in the amount of $682,226.
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Attachments:
Sourcewell Pricing Quote - Side Load Truck
Sourcewell Pricing Quote - Front Load Truck