HomeMy WebLinkAboutCSD-2023-468 - Pre-Approval of Funding - Three (3) Fire ApparatusCommunity Services Department www.kitchener.ca
REPORT TO: Committee of the Whole
DATE OF MEETING: October 16, 2023
SUBMITTED BY: Bob Gilmore, Fire Chief, 519-741-2600 ext. 5501
PREPARED BY: Terry Gitzel, Deputy Fire Chief, 519-741-2600 ext. 5502
WARD(S) INVOLVED: N/A
DATE OF REPORT: September 22, 2023
REPORT NO.: CSD-2023-468
SUBJECT: Pre-Approval of Funding - Three (3) Fire Apparatus
RECOMMENDATION:
That the purchase of three (3) fire apparatus as outlined in report CSD-2023-468 be
preapproved.
REPORT HIGHLIGHTS:
The purpose of this report is to obtain pre-approval to procure fire apparatus in order to meet
future operational requirements.
Pre-approval is being sought to secure more favourable pricing and to accommodate the
long production lead time due to supply chain challenges associated with apparatus
manufacturing;
This report supports the delivery of core services.
BACKGROUND:
Three fire apparatus are scheduled to be replaced in 2026. This includes one fire pumper truck,
one rescue unit and one tanker unit. The Fire service has its apparatus built to defined
specifications based on the intended use of the unit. These units are custom built by an
American manufacturer on behalf of the authorized Canadian dealer.
two most recent procurements in 2017 and 2021 secured a total of eight (8) apparatus
with deliveries staggered over multiple years. The procurement of multiple apparatus at one time
is seen as strategic opportunity which provide financial savings, in addition to the following
benefits:
stabilizing the sourcing exercise,
mitigating supply risks and price escalations,
contributing to standardization of the fleet,
realizing significant cost savings over the apparatus life cycle,
time savings in specification development and reduced engineering costs;
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time savings in contract administration through the entire build process,
time savings in training of suppression staff on each apparatus,
time savings in training of mechanical staff on diagnosis and repair,
reducing the need for specialty parts being inventoried, and
increasing operational readiness.
REPORT:
Supply chain and labour issues continue to impact the manufacturing of fire apparatus, which
has led to unprecedented production lead times. In the past, production had been 10-20 months
depending on size and complexity of the apparatus. Manufacturers have confirmed that lead
time on apparatus is now 30-55 months from issuance of a purchase order.
In addition, new regulations specific to engine classification and emissions are slated for Q1
2026. It is anticipated that this could add a projected increase per truck of $100,000 for any open
orders that are not in production with a manufacturer by a specified date (still yet to be
determined).
Staff have been able to secure pricing for the three replacement units until the end of October
2023. Delaying the order beyond then will risk additional inflationary increases and potentially
incur the additional $100,000 for new regulations.
In order to lock in 2023 prices, plan for the production lead time, mitigate supply chain risks, staff
are recommending the pre-approval of funding to allow the procurement of the apparatus. This
will provide the best possible opportunity to receive apparatus in future years as they are
required.
Fire department staff are currently exploring opportunities to purchase an electric fire truck for
the opening of fire station 8. Staff will be bringing a report forward on this issue at a later date
once more research is completed.
STRATEGIC PLAN ALIGNMENT:
This report supports the delivery of core services.
FINANCIAL IMPLICATIONS:
The net cost for this purchase (A), is fair and reasonable for a project of this scope and the upset
limit is within the planned available (B) for this project. Funding for this project is included within
the planned capital budget (2024-2026). The estimated surplus (D) will fluctuate depending on
the exchange rate at time of delivery and will remain in the account to fund future vehicles and
equipment.
Pre-Approval of Funding - Three (3) Fire Apparatus
Estimated Cost for this Purchase
Costs, including HST in US Dollars 3,112,000.00
Assumed Exchange Rate 1.300
Costs, including HST in CDN Dollars 4,045,600.00
less: HST rebate (402,411.71)
Net Cost Being Awarded 3,643,188.29 A
Add: Projected Costs for Equipment to Outfit the
Vehicles 693,000.00
Less: Projected disposal value on old vehicles (185,398.00)
Total Estimated Cost 4,150,790.29 C
Budget for this proposal
Existing Capital Balance, October 5 2023 6,756,000.00
Less: Vehicles already ordered & awaiting delivery (7,386,000.00)
Less: Other Equipment Replacement (2024-2026) (249,000.00)
Less: Planned SCBA Replacement (2026) (2,000,000.00)
Planned Fire Fleet Capital Budget Funding - 2024 2,300,000.00
Planned Fire Fleet Capital Budget Funding - 2025 2,400,000.00
Planned Fire Fleet Capital Budget Funding - 2026 3,380,000.00
Total Budget 5,201,000.00 B
Estimated Surplus/(Deficit) (B - C) 1,050,209.71 D
COMMUNITY ENGAGEMENT:
INFORM
council / committee meeting.
PREVIOUS REPORTS/AUTHORITIES:
FIN-2021-65 - P21-085 Two (2) Fire Pumper Trucks and Three (3) Fire Aerial Units
APPROVED BY: Michael May, General Manager, Community Services Department and
Deputy CAO