Title
Adopt a Resolution to Approve and Authorize the City Manager to Execute All Documents to Purchase One (1) 2025 Ford Model F550/LT40 from Custom Truck One Source for $199,898.86 and Authorize an Increase in Contract Price of Up to $50,000 to Account For Any Change in Purchase Price Due to Market Volatility
Staffreport
COUNCIL PRIORITY
• Infrastructure
SUMMARY
Staff recommends that the City Council approve and authorize the City Manager or her designee to execute all documents to purchase One (1) 2025 Ford Model F550/LT40 for the Public Works Department and authorize the City Manager to pay up to an additional $50,000 in case of changes in vehicle price.
BACKGROUND
The City maintains a fleet of equipment to provide City services for various department functions. Equipment is periodically replaced to ensure reliability and minimize costs of operation.
Tree trimming truck #764, used by the Urban Forestry Division, is a 2015 Ford F750. It has reached the end of its useful life and the cost to maintain this unit is rising. Therefore, the truck is recommended for replacement.
Analysis
The City may lease or purchase vehicles. This 2025 Ford Model F550/LT40 is proposed for direct purchase at a total cost of $199,898.86 because it is more cost-effective than leasing as it eliminates financing costs as well as the additional ongoing administrative burden of contract management by Public Works and Finance Department staff. The leasing plan available for this truck is $4,029 per month for 60 months for a total of $241,740. Purchasing outright will save the City $41,841.14 in leasing fees along with annual administrative costs to manage the lease plan.
The existing tree trimming truck is a 2015 Ford F750 that has an estimated useful life of six to seven years before maintenance costs begin to rise significantly. This unit has reached the end of its expected useful life and will soon need extensive repairs to continue operating. The proposed purchase is for a replacement tree trimming truck that is a similarly configured unit, which is familiar to operations and maintenance staff.
Custom Truck One Source participates in Sourcewell pricing for government agencies, which satisfies the City’s public bid requirements. Custom Truck One Source provided a quote for a 2025 Ford Model F550/LT40 for $199,898.86. This 2025 Ford Model F550/LT40 has equal function to unit #764, that must be replaced.
The vehicle industry is volatile, and prices frequently increase between the quote date and purchase date. Because the price for this unit may exceed the quoted amount, staff requests authorization to spend up to an additional $50,000 should the price increase.
Financial Impacts
This action is estimated to cost between $199,898.86 and $249,898.86 depending on the final purchase price. Sufficient funds are included in Fiscal Year 2023-2024 carryover and Fiscal Year 2024-2025 budgeted account 690-16-002 for vehicle replacement. There is sufficient budget to fund the purchase, and this Council action will not impact fund balance because previously appropriated funds are available.
ATTACHMENTS
A: Resolution for Ford Model F550/LT40
B: Quote from Custom Truck One Source for Ford Model F550/LT40
PREPARED BY: Sarah Holguin, Administrative Specialist III, Public Works Department