Report Prepared by: Wally Broughton, Public Works Manager - Operations
Title
SUBJECT: Acceptance of Reimbursement from McLaren’s Insurance for a Destroyed Street Sweeper, Approval of an Appropriation in the Amount of $311,301 to Fund 674 - Vehicle Replacement, Approval to Waive Competitive Bidding Requirements, and Approval to Purchase a Replacement Street Sweeper Through a Cooperative Purchasing Agreement with Sourcewell from Municipal Maintenance Equipment (M.M.E.)
REPORT IN BRIEF
Requests approval to accept an insurance reimbursement and appropriate funds to replace a destroyed street sweeper, as well as waiving the City's competitive bidding requirements to purchase the street sweeper utilizing a cooperative purchasing agreement with Sourcewell.
RECOMMENDATION
City Council - Adopt a motion:
A. Accepting insurance reimbursement and increasing revenue in an amount up to $311,301(estimate) from McLaren’s Insurance in Fund 674 - Fleet Capital Replacement; and,
B. Approving a supplemental appropriation in the amount of $311,301 to Fund 674 - Fleet Capital Replacement to purchase the replacement of the destroyed street sweeper; and,
C. Authorizing the use of pooled cash until a reimbursement is received from McLaren’s Insurance; and,
D. Waiving the City’s competitive bidding requirement as permitted by Merced Municipal Code section 3.04.210 and authorizing the purchase of the street sweeper to be made through a cooperative purchasing agreement with Sourcewell, a government procurement program; and,
E. Approving the purchase of one street sweeper model A9, in the amount of $311,300.70, from Municipal Maintenance Equipment (M.M.E.) through Sourcewell contract # 122017-SZW; and,
F. Authorizing the City Manager or the Deputy City Manager to execute any necessary documents and to approve change orders not to exceed 10% of the total purchase amount, the Finance Officer to make the appropriate budget adjustments, and City Buyer to issue the Purchase Order.
Body
ALTERNATIVES
1. Approve, as recommended by staff; or,
2. Approve, subject to other than recommended by staff (identify specific findings and/or conditions amended to be addressed in the motion); or,
3. Deny; or,
4. Refer to staff for reconsideration of specific items; or,
5. Continue to a future meeting (date and time to be specified in the motion).
AUTHORITY
Merced City Charter, Section 200. Municipal Code Section 3.04.210 - Exemptions from competitive bidding.
CITY COUNCIL PRIORITIES
As provided for in the FY 2021/22 Council Priorities under Operational Sustainability.
DISCUSSION
Fleet Services is requesting approval from Council to appropriate $311,301 to purchase one new 2021 M9 street sweeper in the amount of $311,300.70. This purchase is necessary to replace a street sweeper that sustained an auxiliary engine fire with repair cost that exceeded the value of the sweeper.
The City has received a partial payment for the replacement cost in the amount of $105,000 from McLaren’s Insurance. Per the insurance stipulations, the remaining reimbursement will be processed after the City has purchased the vehicle. The insurance reimbursement amount is estimated to be $311,300.71 and will be credited back to Fund 674 - Fleet Capital Replacement. If the full amount of $311,300.70 is not reimbursed by McLaren’s Insurance, the cost difference will be covered by the Street Sweeping Unreserved Designated Fund Balance in Fund 674 - Fleet Capital Replacement.
Section 3.04.210 of the Merced Municipal Code provides that the City Council can approve a waiver of the City’s competitive bidding requirements when such purchases are made pursuant to cooperative purchasing in conjunction with other governmental entities. Staff requests waiving the City's competitive bidding requirement and purchase directly from Municipal Maintenance Equipment through Sourcewell contract #122017-SZW.
HISTORY
Over the last several years, the City has purchased a variety of equipment not provided by local vendors including, street sweepers, leaf trucks, fire trucks, refuse trucks, etc. through the Sourcewell government procurement program with the goal of standardization. Standardization reduces overall parts and maintenance expenses for Fleet Services, and improves repair time when breakdowns do occur, due to technician familiarity with a specific vehicle type. This has proven to be a cost saving procedure for the City.
IMPACT ON CITY RESOURCES
The $311,300.70 reimbursement from McLaren’s Insurance is an estimated amount and appropriated for the purchase of a new replacement Street Sweeper. If the actual reimbursement from McLaren’s Insurance is less than the $311,300.70, funds are available in the Street Sweeping Unreserved Designated Fund Balance in Fund 674 - Fleet Capital Replacement to cover any difference.
ATTACHMENTS
1. Municipal Maintenance Equipment Quote
2. Sourcewell Certificate of Membership