HomeMy WebLinkAbout10 - Budget Amendment for Lifeguard VehiclesCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No. 10
April 27, 2004
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: General Services Department
David E. Niederhaus, Director, 949 - 644 -3055
dniederhaus @city.newport- beach.ca.us
SUBJECT: Budget Amendment for the Purchase of Lifeguard Vehicles
ISSUES:
The existing Lifeguard Vehicle Sponsorship Agreement between the City and Chevrolet
will expire on May 10, 2004. Should the City: (1) purchase seven of the thirteen vehicles
operated under the agreement from General Motors and (2) purchase two additional
vehicles from dealer stock through the normal City purchasing process?
RECOMMENDATIONS:
Authorize the purchase of seven vehicles from the General Motors Corporation at a cost
of $179,050 and the purchase of two additional lifeguard vehicles at a cost of $50,000.
Approve Budget Amendment BA , transferring $232,050 from unap-
propriated Internal Service Fund reserves to the General Services Department Accounts
6120 -9100 and 6120 -9102 to fund the cost to purchase of the nine new vehicles and the
transfer of equipment into four surplus City vehicles.
DISCUSSION:
The original lifeguard sponsorship agreement with the General Motors Corporation began
in May, 1998 and expired on March 7, 2003. The original agreement provided the City
with eleven Chevrolet vehicles (S -10 pickups and Blazer sport utility vehicles) for use on
the beach. The units were replaced by Chevrolet at the midpoint of the agreement in
2000. As the administrator of the contract, the County of Los Angeles received a
commission of $4,400 per year for the eleven vehicles.
On March 11, 2003, the Council approved a new one -year lifeguard sponsorship
agreement with Chevrolet administered by the State Parks Department. The City was
Budget Amendment for the Purchase of Lifeguard Vehicles
April 27, 2004
Page 2
one of eight cities, along with the County of Orange and the State of California, to sign the
agreement which provided for a total of 63 vehicles. The City received thirteen vehicles
(eight S -10 pickups and five Tahoes) in April 2003. The total commission paid to the State
for their use was $5,199 for the one year period for a total of thirteen units.
The 2003 agreement gave Chevrolet the option to extend the agreement for three
additional years at the end of the initial twelve month period. Chevrolet declined to do so,
but did extend the agreement for two months from the scheduled March 10, 2004
expiration date. The current expiration date is May 10, 2004 and the vehicles must be
either purchased at set prices from Chevrolet or returned to a local Chevrolet dealer by
that date.
The Fire Department has continued to pay monthly maintenance and replacement costs
into the Internal Services Fund for the maintenance, upkeep, and ultimate replacement of
these units since 1998.
General Motors has provided coalition members proposed purchase costs for each unit.
General Services and Fire Department staffs jointly evaluated various options for
purchasing and replacing the vehicles, which included purchasing the 13 units currently
being used, returning all the sponsored vehicles to Chevrolet, and purchasing new
vehicles from various auto dealers through a normal bid process, or a combination of the
two options.
Ultimately, the decision was made to purchase only seven of the thirteen vehicles
currently in service from Chevrolet. The vehicles to be purchased are 2003 model year
vehicles, and are currently equipped with emergency lighting and radios which would
need to be transferred to new vehicles if the vehicles were replaced.
The remaining six vehicles will be returned to Chevrolet. Three of those are 2002 model
year S -10 pickup trucks, which have already been in service on the beach for two years.
Council Policy F -9 guidelines provide for beach vehicles to be replaced every four years.
We believe the cost quoted by Chevrolet to purchase the vehicles is too high considering
they would be due for replacement in late 2005. The three other vehicles being returned
to Chevrolet are 2003 Tahoes. Staff is seeking approval to purchase two less expensive
pickup trucks to replace two of the Tahoes, which will be a better fit for the users than the
Tahoes currently assigned. Four of the replacement units will be surplus City vehicles
that have been retained pending the outcome of lease negotiations, and equipment will
be transferred to those units from vehicles being returned to Chevrolet.
FISCAL IMPACT:
The cost to purchase the nine vehicles will be as follows:
Unit
Year
Model
Purchase Price*
2817
2003
Tahoe LS
$33,900
2819
2003
Tahoe LS
$33,900
2821
2003
S -10 4x4
$22,250
Budget Amendment for the Purchase of Lifeguard Vehicles
April 27, 2004
Page 3
. 2822
2823
2003
2003
S -10 4x4
S -10 4x4
$22,250
$22,250
2824
2003
S -10 4x4
$22,250
2525
2003
S -10 4x4
$22,250
New
2004
Ext Cab Pickup 4x4
$24,000
New
2004
Ext Cab Pickup 4x4
$26,000
Total
$229,050
'Prices
include taxes
1'1
LJ
There are sufficient appropriated funds in the Internal Service Fund for these purchases,
and as previously stated, the Fire Department has made contributions for the eventual
end of the sponsorship program, when we would be required to again purchase lifeguard
vehicles.
ENVIRONMENTAL REVIEW:
This action requires no environmental review, as it is not a project pursuant to CEQA.
SUMMARY:
The General Services and Fire Department staffs have developed a plan for the
necessary purchase and replacement of lifeguard vehicles given the end of the
sponsorship program by Chevrolet. The purchase of the nine vehicles will allow Marine
Safety operations to continue in a seamless fashion as the summer season commences,
provided the attached budget amendment is approved prior to May 10.
Prepared by:
((L'A�2
Mike Pisani
Deputy General Services Director
Attachments: Budget Amendment Form
Submitted by:
David E. Niederhaus
General Services Director
City of Newport Beach NO. BA- 04BA -053
BUDGET AMENDMENT
2003 -04
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates
X Increase Expenditure Appropriations AND
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
from additional estimated revenues
PX from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
AMOUNT,.j $232,050.00
•
Increase in Budgetary Fund Balance
X Decrease in Budgetary Fund Balance
No effect on Budgetary Fund Balance
To increase expenditure appropriations for the purchase of nine lifeguard vehicles.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Account
610 3605
REVENUE ESTIMATES (3601)
Fund /Division Account
EXPENDITURE APPROPRIATIONS (3603)
Division
Number
Account
Number
Division
Number
Account
Number
Division
Number
Account
Number
Division Number
Account Number
Signed:
Signed:
Signed:
Amount
Description Debit
Equipment Fund Balance $232,050.00
Description
Description
6120 Equipment Replacement
9100 Rolling Equipment
6120 Equipment Replacement
9102 Contracted Setup
Approval: Administrative Services Director
City Manager
City Council Approval: City Clerk
Credit
$229,050.00
$3,000.00
Date
D e
Date
•
#10
City of Newport BeaCh NO. BA- 04BA -053
BUDGET AMENDMENT
2003 -04 AMOUNT: $232,050.00
EFFECT ON BUDGETARY FUND BALANCE:
Increase Revenue Estimates Increase in Budgetary Fund Balance
X Increase Expenditure Appropriations AND Decrease in Budgetary Fund Balance
Transfer Budget Appropriations No effect on Budgetary Fund Balance
SOURCE:
from existing budget appropriations
from additional estimated revenues
X from unappropriated fund balance
EXPLANATION:
This budget amendment is requested to provide for the following:
To increase expenditure appropriations for the purchase of nine lifeguard vehicles
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE Amount
Fund Account Description Debit Credit
610 3605 Equipment Fund Balance $232,050.00
REVENUE ESTIMATES (3601)
Fund /Division Account Description
EXPENDITURE APPROPRIATIONS (3603)
Description
Division Number 6120 Equipment Replacement
Account Number 9100 Rolling Equipment $229,050.00
Division Number 6120 Equipment Replacement
Account Number 9102 Contracted Setup $3,000.00
Division Number
Account Number
Division Number
Account Number
Signed:
Financial Approval: Administrative Services Director Date
Signed: 044-1�� ( — l
Admi ,I trative F �proval: City Manager rr e
Signed: �2( a
City Council Approval: City Clerk Date