To: Board of Directors
From: Lewis Broschard, Chief, Contra Costa County Fire Protection District
Report Title: Fire Apparatus (Type 1 Engines) Acquisition and Lease-Purchase Program
☒Recommendation of the County Administrator ☐ Recommendation of Board Committee
RECOMMENDATIONS:
1. APPROVE and AUTHORIZE the Fire Chief, or designee, to execute a purchase contract with Golden State Fire Apparatus, Inc., for the manufacture and sale of five (5) Type 1 fire engines, in an amount not to exceed $6,658,505, including indemnity by the Contra Costa County Fire Protection District.
2. APPROVE and AUTHORIZE the Fire Chief, or designee, to execute a new lease schedule under the Master Lease Agreement with PNC Bank, National Association, for an amount not to exceed $7,832,245 in ten (10) annual payments of approximately $783,224.43 and a term of ten years for the lease-purchase of the Pierce fire engines.
3. APPROVE and AUTHORIZE the Fire Chief, or designee, to execute a four-party agreement among Golden State Fire Apparatus; PNC Bank, National Association; Pierce Manufacturing, Inc.; and the Contra Costa County Fire Protection District regarding the manufacture, delivery of the fire engines, and initiation of the lease.
FISCAL IMPACT:
Budgeted. 100% CCFPD General Fund
The apparatus will be acquired using the Houston-Galveston Area Council (HGAC) cooperative purchasing program. The fire engines are priced at $1,266,701 each, for a total purchase price of $6,333,505, including sales tax. The purchasing authority includes an additional $325,000 to allow for contingencies.
The total financing cost, at an annual interest rate of 4.13%, will not exceed $1,498,740.92. This rate is lower than the most recent lease-purchase schedule but higher than previous lease-purchases due to current market conditions and the federal elimination of tax-exempt municipal financing. PNC Bank, National Association, under the MLA, will pay the purchase price for the apparatus. The annual payment amount will be $783,224.43. The first payment in the ten-year lease schedule will be due in August 2026. All costs will be fully funded by the Contra Costa County Fire Protection District Operating Fund and included in the District’s FY 2026-2027 budget.
BACKGROUND:
On December 12, 2023, the Board approved and authorized the Fire Chief to enter into a Master Lease Agreement with PNC Equipment Finance, LLC ("PNC"). On December 15, 2023, the Contra Costa County Fire Protection District ("District") entered into the Master Lease Agreement (the "MLA") with PNC.
The District now desires to finance the purchase of additional Pierce apparatus by executing a new lease schedule under the MLA. While the District has made significant capital purchases of fire apparatus in recent years, the need exists to continue replacing front-line engines and trucks. As the District has expanded and added in-service companies, demand for a larger Type 1 engine fleet has increased.
The District has a fleet of 59 Type 1 engines, including training engines, Traffic Safety Units, and Reserve units. Those engines are distributed as 32 frontline engines for primary response, one cross-staffed engine at fire stations staffed with aerial apparatus, and reserve and training engines. The District spends a tremendous amount of time and dollars maintaining older, high-mileage apparatus.
The National Fire Protection Association (NFPA) Standards 1901 (Standard for Automotive Fire Apparatus) and 1911 (Standard for the Inspection, Maintenance, Testing, and Retirement of In-Service Automotive Fire Apparatus) both recommend that front-line apparatus be retired to reserve status after 15 years of service. This guideline mainly aims to ensure safety. Older apparatus do not offer firefighters the same safety as modern equipment due to cab designs and built-in safety features such as airbags, advanced braking systems, and other safety measures. The standards also suggest that all reserve apparatus should be taken out of service after a maximum of 25 years. They note that high usage, mileage, and other factors can lead to earlier retirement of front-line apparatus than the 15-year mark. In our district, the high usage and mileage of our front-line apparatus indicate a retirement timeline of less than 15 years.
The acquisition of the apparatus under this order will accomplish several objectives. The new apparatus will directly and immediately impact the District's ability to provide increased reliability for emergency response, compared to the existing fleet, with reduced out-of-service time for maintenance and repairs. Additionally, the new units will have a direct, immediate impact on reducing maintenance costs now and into the future, driven not only by the age of the apparatus but also by the quality of the apparatus being acquired. Finally, the new apparatus will enable the District to comply with NFPA 1901 and 1911 recommendations, increasing firefighter safety and fleet reliability.
This additional capital investment, annually over the next ten years, will allow the District to make another significant step forward in fulfilling one of the recommendations from the Fitch study, which emphasizes the need to allocate at least 4% of our budget annually to facilities and equipment. Ensuring the availability of safe, reliable, and modern fire apparatus is crucial to achieving the district's mission.
If approved, the new fire apparatus will arrive in 49.5-52.5 months and be in service shortly after delivery. Older apparatus will rotate to reserve status, and the oldest apparatus in the fleet will be removed from service and declared surplus.
Under the four-party agreement, if Pierce does not deliver an engine to Golden State Fire Apparatus (GSFA) within the time outlined in the purchase contract between GSFA and the Fire District, Pierce will make certain payments under the lease.
The purchase contract contains an indemnification provision from the District to Golden State Fire Apparatus.
CONSEQUENCE OF NEGATIVE ACTION:
Without approval, the District cannot acquire the new apparatus. The fleet's current age and condition will continue to decline, affecting the District’s ability to deliver reliable and effective emergency response. Furthermore, higher maintenance costs would negatively impact the operational budget, and mechanical breakdowns would lead to increased out-of-service time for fire crews.