HomeMy WebLinkAboutAgenda - 04-18-2006-9bORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 18, 2006
Action Agenda
Item No. ~1- I~
SUBJECT: Approval of Equipment and Vehicle Purchases for Fiscal Year 2005-06
DEPARTMENT: Budget PUBLIC HEARING: (Y/N) No
ATTACHMENT (S):
Attachment 1, Equipment and Vehicles
Recommended for
Purchase in Fiscal Year
2005-06
INFORMATION CONTACT:
John Link 245-2300
Pam Jones 245-2598
Wayne Fenton 245-2628
Donna Dean Coffey 245-2151
PURPOSE: To consider approval of equipment and vehicle purchases for County departments,
excluding Information Systems and Solid Waste, far fiscal year 2005-06 and authorization for
the Finance Director to finance the purchase the vehicles and major equipment through private
placement loan proposals from SunTrust Bank.
BACKGROUND: Historically, the County has funded replacement of County-owned equipment
and vehicles through its ten year Capital Investment Plan (CIP), Examples of the types of
purchases made with annually appropriated monies include replacement of some portion of the
Sheriffs vehicle fleet and Emergency Services vehicles, including ambulances, as well as
replacement of other County department vehicles and major equipment (not including
Information Technology-related equipment).
For the current fiscal year, the Board approved CIP included a plan to purchase County
equipment and vehicles through financing arrangements. Over the last few months, the
Manager, Public Works, Purchasing and Budget Staffs have worked with individual departments
to explore various options far meeting departmental equipment and vehicle needs. As we have
done over the last few years, staff recommends that the County pursue two funding
arrangements, one for athirty-six month period and the other far a period of fifty-nine months.
The life expectancy and cost of the equipment or vehicle would determine whether it was
financed far the shorter or longer-term period, Attachment 1 of this abstract outlines the
recommended purchases, Examples of recommended vehicles and equipment planned for
purchase with the assistance of a three-year financing arrangement include replacement of
Sheriff patrol vehicles (in accordance with the Sheriffs BOCC approved vehicle replacement
plan), Emergency Medical Services Initial Response Vehicles (IRV) and ambulances, and
Animal Control trucks.
Energy Conservation Initiatives and Alternative Fuel Vehicles
The County's Environmental Responsibility Goal includes the objective: "Initiate policies and
programs that conserve energy, reduce fuel/utility/resource consumption...,." In support of that
goal, in December 2005, the Board adopted a Vehicle Fuel Conservation Policy. The purpose
of the adopted policy is to reduce the County's vehicle fuel consumption, wherever possible;
improve fuel efficiency; and maximize the use of alternative fuels.
Public safety vehicles have historically not been as readily available in alternative fuel models,
However, Public Works plans to work with EMS and the Sheriff Departments to identify and
evaluate alternative fuel models as they become available.
Alternative fuel options identified by the Alternative Fuel Vehicle Institute include:
• Bio-diesel
• Compressed natural gas (CNG)
• Ethanol (E 85)
• Hydrogen
• Propane
In addition, the U,S. Department of Energy's Energy Efficiency and Renewable Energy Division
includes:
• Electricity (including fuel cells)
• LNG
• Methanol
Not all of these vehicle alternatives are readily available for commercial purchase, especially on
State Contract. A summary of each of these follows:
Bio-diesel -Public Works recently met with stakeholders (other county departments and
Town of Hillsborough) to examine issues related to the purchase and dispensing of bio-
diesel at the Public works fueling facility. Some concerns regarding the use of bio-diesel
in older model (pre-1994) vehicles do exist., At the time this report was prepared,
Orange County had 18 diesel vehicles that are pre-1994. Several of these are slated for
replacement during the 05/06 and 06/07 CIP process. The town of Hillsborough has
approximately nine pre-1994 diesel vehicles. Bio-diesel is currently cost-competitive with
regular petroleum diesel, Public Works is considering implementation of 2% bio-diesel,
with amounts to increase in future based on vehicle performance and reliability, During
calendar year 2005, the Public Works fuel facility dispensed almost 54,000 gallons of
diesel for vehicles and equipment, with approximately 45,000 gallons used by the
County.
Compressed Natural Gas (CNG) =The County's new Compressed Natural Gas (CNG)
fuel station will begin operation later this spring at the County's Public Works facility
located on Highway 86 North. As of April 11, 2006 the County had seven CNG vehicles
in its inventory, Four of those vehicles are Ford Crown Victories that were originally
purchased as gasoline fueled and then retrofitted for CNG fuel during the current fiscal
year at a cast of $10,900 per vehicle. The remainder of the CNG fleet includes three
Honda Civics. The Crown Victorias are assigned to Health department (one vehicle) and
the remaining ones to the Motor Pool fleet. The Civics are assigned to Social Services
3
and Central Services. The Purchasing and Central Services department regularly
monitors for opportunities to purchase good used CNG vehicles.
Ethanol (E 85) _Approximately 25 existing County vehicles are flex-fuel, capable of using
E 85.
Qther alternative fuel vehicles currently available on the market include
• Hybrids -There are two options for hybrid vehicles on State contract for the current year
- the two-door Insight sedan or hatchback at a cost of about $21,000 and the four door
Civic sedan at a cost of about $20,000 -both manufactured by Honda Motors., As a
paint of comparison, a gasoline fueled four-door sedan, the Dodge Neon, has a price tag
of just over $11,100, It should be noted that hybrid vehicles are usually considered to be
"borderline" alternative fuel vehicles, and most grant agencies will not fund their purchase
as an AFV. While hybrids do show emissions improvement when compared to
conventional gasoline vehicles, the emissions reductions are marginal compared to other
AFV's, However, hybrids do offer greater fi~eling flexibility than some other alternative
fuel options,
• Electric - As with the biodiesels, there are no options available on State contract. In
addition, research indicates that electric powered vehicles experience higher than normal
maintenance issues.
Attachment 1 of this abstract identifies where alternative fuel vehicles would be located. Should
the Board wish staff to explore other opportunities for purchase of alternative fuel vehicles
instead of gasoline fuel vehicles, staff would do so.
Emergency Medical Vehicles
The County currently has eight active ambulances and twelve IRVs responding to emergency
medical calls. The Board has approved replacement of six of the eight ambulances over the last
two fiscal years, The County's vehicle replacement schedule calls for the replacement of two
ambulances in the current fiscal year. Current mileage for the ambulances being replaced
ranges from a low of more than 215,000 miles to a high of more than 400,000 miles, The
average annual mileage for an ambulance is approximately 26,000 miles per vehicle, The cost
to purchase and equip two ambulances totals approximately $225,000 or approximately
$1 12,000 each.
The County currently has 12 IRVs in place.. Last spring, the Board approved the purchase of
replacement IRVs leaving ten 2002 or older models on the road.. The County's vehicle
replacement schedule provides for the replacement of two IRVs this spring. The current mileage
of 2002 model vehicles ranges from a low of approximately 85,000 miles to a high of
approximately 122,000 miles,
FINANCIAL IMPACT: The amount of funding required to purchase the equipment and vehicles
outlined on Attachment 1 totals $1,215,225, As indicated in the Background section above,
funding for the vehicle and equipment purchases would come from installment financing from
SunTrust Bank. In addition, staff plans to include the purchase of a compactor for the County's
Solid Waste Department on the same financing arrangement. (The Board approved the
a
purchase of the compactor at a total cost of $335,900 at the September 7, 2005 regular
meeting,.)
The amount of the installment-financing contract totals $1,551,125 ($335,900 for Solid Waste
and $1,215,225 for the items on Attachment 1), As outlined in the Background section above,
staff proposes to enter into two private placement arrangements with SunTrust in order to fund
the purchases. The Finance Director requested proposals from five lenders, and SunTrrast had
the most favorable interest rates.
• Thirty-Six Month Arrangement -Based on quotes received from SunTrust, projected
annual debt service payments (over a 36 month period) related to the total arrangement
would be approximately $320,000. The interest rate quoted by SunTrust for this
arrangement is 3.70 percent annually. The projected annual debt service payments were
included in the most recent (.January 20, 2006) debt capacity calculations presented to
the Board..
• Fifty-Nine Month Arrangement -Based on quotes received from SunTrust, projected
annual debt service payments (over a 59 month period) related to this arrangement
would be approximately $195,000. The interest rate quoted by SunTrust for this
arrangement is 3..74 percent annually, The projected annual debt service payments were
included in the most recent debt capacity calculations presented to the Board,
On May 4, 2006, staff will bring the resolution authorizing the installment financing arrangement
along with the Equipment and Vehicles Capital Project Ordinance to the Board for final approval.
Projected annual debt service requirements for both financing arrangements total $420,000 and
were included in the most recent debt capacity calculations presented to the Board on .January
20, 2006., It is important to note that the Solid Waste portion of the payment would be charged
directly to the Solid Waste Enterprise Fund with the remainder charged to the General Fund. In
accordance with the Board's adopted County Capital Funding Policy, the County's annual
General Fund debt service appropriations would include the debt outlined in the above section.
Staff recommends that the General Fund debt service payments be covered through the annual
available pay-as-you-go funding for capital projects and not through dedicated property tax,
It is important to note that should the Board decide to postpone the recommended action until a
later date, current year model Sheriffs vehicles will not be available for purchase.
RECOMMENDATION (S): The Manager recommends that the Board of County Commissioners:
(1) Approve the equipment and vehicle purchases (outlined on Attachment 1 of this
abstract);
(2) Authorize staff to bring to the May 4, 2006 Commissioners meeting the Equipment
and Vehicles Capital Project Ordinance and executed documents required to
accomplish the financing with SunTrust Bank
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