09-06-2022 Council Work Session Packet

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WS — Item 5 WORK SESSION STAFF REPORT Work Session Item No. 5 Date: September 6, 2022 To: City Council From: John Swenson, Public Safety Director Re: Replacement of Fire Apparatus - Tenders Backjround During the August 1, 2022 Council Work Session staff was directed to work through the Sourcewell contract with Custom Fire to establish pricing for the replacement of T1 and T2. As previous discussed members of the Fire Division participated in Apparatus Build Committee to establish the specifications needed to meet the operational needs of the community. These specifications were provided to Custom Fire in order to establish the pricing of the Tenders. Attached is the Custom Fire contract for the purchase of replacement apparatus for your review. The cost to purchase the first Tender is $1,157,130.00. If we purchase two Tenders and they are manufactured at the same time, the cost of second Tender would be $1,104,870.00. This cost saving stems from efficiencies in the engineering and manufacturing processes. This pricing is guaranteed through September 13, 2022. Wayde Kirvida with Custom Fire will be present at the meeting to address any questions on the pricing and Deputy Director Dan L'Allier will be present to address any questions on the specifications of the Tenders. Staff recommends financing the water tenders in the amount of $2,200,000 by authorizing an interfund loan. The Sewer Fund (602) has sufficient reserves to issue a loan and payback would occur over 10 years at a 1.0% interest rate through the Operating Tax Levy. Drafting of the 2023 — 2027 Financial Plan is currently in progress. The Plan includes many assumptions over the next 5 years, but is currently showing the following tax rates with the addition of a tax levy for the water tenders. The levy for the water tenders would begin in 2024 and continue through 2033.