TOWN OF VIEW ROYAL COUNCIL REPORT - Purchase of 2023/2024 Fire Engine

TOWN OF VIEW ROYAL COUNCIL REPORT

TO: Council
DATE: September 15, 2022
FROM: Paul Hurst, Fire Chief
MEETING DATE: September 20, 2022

Purchase of 2023/2024 Fire Engine

RECOMMENDATION: THAT Council approve the award of the Fire Engine acquisition to Safetek Fire Apparatus for the construction and delivery of a 2023 fire engine at a cost of $1,353,402.34 (net of GST rebate);

AND THAT the budget be increased not to exceed $1,400,000 to accommodate exchange rate fluctuations.

PURPOSE:

To receive authority to place an order for the construction and delivery of a 2023/24 Fire Engine.

TIME CRITICAL:

This is time critical. The vendor has indicated that they anticipate additional increases in costs to fire apparatus within the next 6 months. Vendors anticipate 10-15% increases on all new apparatus for 2023.

EXECUTIVE SUMMARY:

The Town received one bid on the request for proposals to replace the 1992 fire engine. An anticipated budget of 1.1 million in 2019 has proven to be insufficient given current labour and supply chain issues globally.

This request is for approval of up to 1.4 million for the purchase of the proposed apparatus

BACKGROUND:

In 2018 it was identified in the Fire Department fleet plan that the 1992 fire engine be replaced. Fire Underwriters recommends replacement of front-line apparatus at 15 and 20-year intervals.

As part of the plan, an anticipated cost, based on then current market, historical values and previous purchases, it was concluded that $850,000 would be sufficient to replace the expired apparatus. The replacement was deferred until the 2022 and the anticipated budget was adjusted to $1.1 million. This adjustment took into consideration the cost of the vehicle, taxes, delivery and equipment.

In 2020 the world was hit with a global pandemic which has resulted in significant changes to the market and ability to secure apparatus. Issues of global supply chain and specialty labor workforces have increased costs significantly in the fire apparatus sector. Discussions with vendors have concluded that with current exchange rates and costs, purchasers can expect 30-40% price increases for replacement trucks. Further, the industry standard or delivering a vehicle within 365 days has now stretched to 18-24 months.

DISCUSSION:

In July 2022 the Fire Department issued an RFP to North American vendors for the construction and delivery of Class 1 fire engine to View royal. This specified truck exactly matches our current apparatus and has been determined as fulfilling the needs of the department for the next 20 years. 1 bid was received at a cost of $1,416,645.44 CDN (including all taxes). View Royal will realize reimbursement of tax portions ($63,243.10). Modifying or changing brands of specified components may result in some savings.

Discussions with vendors have revealed that some manufacturers are not accepting or bidding on apparatus until 2025 because of labour and parts shortages, or capacity within the organization. As well, vendors have indicated that they anticipate further increases in costs for 2023.

Although the received bid exceeds the budgeted amount, I am confident that negotiations and slight modifications to the RFP can yield savings, resulting in delivery of a vehicle that satisfies the needs of the Fire Department and does not exceed $1,400,000 (after GST rebates are received).

It should also be noted that with an anticipated delivery of between 415-450 days from order, payments would not occur until 2024. This length of time exposes the Town of View Royal to the variability of dollar exchange rates. The Town will develop a strategy to mitigate this exposure and have included a contingency in the proposed budget to cover this.

SUSTAINABILITY/CLIMATE CHANGE IMPACTS:

The fire engine specification includes a diesel engine built to the latest environment standards. It replaces a 1992 diesel that has no emission controls.

FINANCIAL IMPLICATIONS:

An increase to the approved budget amount is required to fulfill the RFP. The increase to $1.4 million is $280,000 more than the originally approved budget of $1,120,000. The increase will be funded from Casino reserve, same as the original budget funding source.

ALTERNATIVES:

There are no alternatives to replacing this vehicle. The life of this particular fire engine was extended beyond its serviceable viability and needs to be replaced with a modern, reliable truck.

CONCLUSION:

That Council approve a budget increase of $280,000 and that the Fire Engine acquisition be awarded to Safetek Fire Apparatus for the construction and delivery of a 2023 fire engine at a cost of $1,416,645.44 (including all taxes).