Title
Resolution to Amend Two Purchase Orders with Bell Equipment Company for Electric Refuse Trucks ($10,000.00)
Memorandum
On June 7, 2021, City Council approved Resolution #21-193 approving the purchase of an electric rear load refuse truck from Bell Equipment Company in the amount of $531,532.00. On December 6, 2021, City Council approved Resolution #21-435 approving the purchase of a second electric rear load refuse truck from Bell Equipment Company in the amount of $601,205.00. The electric chassis for each of these purchases are built and supplied by Peterbilt who then provides them to Heil Corporation to have the refuse bodies installed. Bell Equipment Company is the local Heil dealer and coordinates delivery of the finished product.
Peterbilt recently notified Bell Equipment Company of a $5,000.00 per vehicle price surcharge. The price surcharge is a result of many factors including inflation related parts and wage increases, raw material issues, labor shortages and freight cost increases (surcharge letter is attached in Legistar). While the City has seen these issues in other vehicles purchases, this is the first time that we have seen a price surcharge once an order has been placed. The City has requested, but not received, assurances that this is a one-time surcharge.
Staff is recommending that the City Council approve the surcharge for these two vehicles. The increase of $10,000.00 is a small amount when compared to the combined purchase price of over $1.1 million for these trucks. Cancelling the order negatively impacts solid waste operations, sustainability efforts and may impact the grants received towards the purchase of each truck.
The proposed surcharge would increase PO #21-0868 to an amended total of $536,532.00 and PO #22-0515 to an amended total of $606,205.00. The funds for both PO's would be available without regard to fiscal year.
Budget/Fiscal Impact: Funding for this surcharge is available in the FY22 Fleet Services Fund O...
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