HomeMy WebLinkAbout2013/12/10 Item 19 ,.�. -- .�-�--
- -�-��..�.•-�i CITY COUNCIL
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CHUTAVISfA
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12/10/13, Item �%•'
ITE1I TITLE: RESOLUTION OF THE CITY COUi�'CIL OF THE CITl' OF CHULA
VISTA AMEI�'DII�'G THE COMPEI�'SATION SCHEDULE AND
CLASSIFICATIOI�i PLAI�T TO REFLECT THE ADDITION OF A
FLEET INVENTORY CONTROL SPECIALIST
RESOLUTION OF THE CITY COiINCIL OF THE CITY OF CHULA
VISTA AMEI�'DING THE FISCAL YEAR 20li-14 AUTHORIZED
POSITION COiNT FOR THE CENTRAL GARAGE OPERATIONS
FUND TO ADD A 1.0 FTE EQUIPMEI�'T MECHANIC AND A 1.0 FTE
FLEET I\'VENTORY CONTROL SPECIALIST AI�'D
APPROPRIATII�TG FUNDS ACCORD Y
SUBAIITTED BY: DIRECTOR OF PUBLIC �VO
ASSISTANT DIREC R OF PU ��
REVIER'ED BY: CITY MANAGER
ASSISTANT CI MANAGER.3'�J
' 4/STHS VOTE: YES � NO ❑
SiTi4IAiARY
The Public Works Department implemented continuous improvement tools to increase the
percentage of scheduled vehicle preventive maintenance inspections that aze completed each
month in an effort to reduce repair costs and vehicle failures. Staff identified a number of
countermeasures to reduce or remove non-��alue added steps, reducing the pre��entive
maintenance process from 32 to 15 steps and saving an estimated 3.4 mechanic hours per day.
Adding an equipment mechaniq and, discontinuin� a contract �rith NAPA for parts procurement
and reallocating the savings to an in-house fleet inventory control specialist are recommended.
The proposed resolutions amend the Fiscal Year 2013-14 Central Garage operating budget to add
the positions and appropriate S70,114 to fund the proeram.
ENVIRONNIENTAL REVIE�V
The Development Services Director has reviewed the proposed activity for compliance with the
Califomia Em�ironmental Quality Act (CEQA) and has detemuned that the activity is not a
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12/10/13, Item �g
Page 2 of 7
"ProjecP' as defined under section 15378 of the State CEQA Guidelines because the activity
consists of govemmental administrative/fiscal activity that will not result in direct or indirect
physical changes in the environment; therefore, pursuant to Section 15060(c)(3) of the State
CEQA Guidelines the activity is not subject to CEQA. Thus, no environmenta] review is
required.
RECOMAZENDATION
• City Council adopt the resolutions.
DISCUSSION
The City of Chula Vista is committed to matimizing its service delivery through continually
looking to eliminate waste in its delivery processes and maximizing the value of those services to
our customers. One of the initiatives under the citywide strategic plan is to implement continuous
improvement efforts tliroughout the organization.
The Fleet Management Section (Garage) within the Public Works Department services vehicles
and equipment for City departments. Tl�e fleet includes approximately 350 light- to medium-duty
vehicles that are used by Parks, Streets, Wastewater, Traffic Operations, Construction Inspection,
Code Enforcement, Police, and Fire. The Garage schedules preventive maintenance inspections
of vehicles based on manufacturer specifications to ensure that vehicles are operating safely and
meet various state and federal standards. The performance goal is to have properly functioning
vehicles that are up to date and specific to their missions. By keeping Police, Fire, and Public
Works vehicles in good working condition, the Garage helps ensure that public services are not
disrupted.
Since 2006, the Garage has lost seven staff, and now only has a team of seven that manage the
City's 560 vehicles (�vhich includes the 350 light- to medium-duty vehicles and also Fire
apparatus, full-size vehicles like wastewater vactors .and small equipment ]ike mowers). In
addition, the number of non-safety vehicles that are replaced each year has been reduced
significantly due to limited resources. With the reduced staffing and aging fleet, the Garage has
not been able to meet its goal for the percentage of scheduled preventive maintenance
inspections (PMs) that are completed each month, resulting in increased repairs at higher costs.
The following table represents the percentage of scheduled PMs completed each year.
PM's Completed on Time
100% ,.,.�„ r..
90% �.
80%
T
70%
60% � -
50% ^ �
40% � �
30% "' Y i k y
20% ��
10% 4"�k " r 6�
or .
2009 2010 2011 2012 2013
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12/10/13, Item ��
Page 3 of 7
One of the Continuous Improvement principles is that investment in preventive maintenance is
much more cost effective than performing repairs. Given the importance of this metric; a
continuous improvement team comprised of representatives from Police, Fire; and Public �Vorks
(Team) held multiple working sessions over a seven ���eek period to map out the process to
complete PMs and identify non-value added steps that could be reduced or eliminated to increase
the percentage of scheduled PMs that aze completed each month.
Spa�hetti diagams and the review of the current state process indicate that the mechanics are
productive. How�ever, with the age of the fleet and the high ��ehicle to mechanic ratio, it �vas
calculated prior to the continuous improvement inter��ention that an additional 3.1 full-time
equivalent (FTE) of inechanic staff time is needed. A number of countermeasures were identified
to reduce or remove non-value added steps in the pre��entive maintenance process, reducing ihe
process from 32 to l i steps. This saves an estimated 3.4 mechanic hours per day, reducing ihe
estimated additional mechanic need to 1.9 FTE.
The Team is only recommending adding one mechanic no��� and undertaking additional kaizen
events in early 2014 to LEAN out the vehicle repair process and the process for maintenance and
repair of small equipment (mowers, etc.), which is anticipated to save additional mechanic time.
Hirin� an additional equipment mechanic is anticipated to have a net benefit as highlighted
below:
• Repairs and vehicle failures cause unplanned do�vntime (vehicles out of service) that
prevents field crews from performing city services, such as park maintenance. It is
conservatively estimated that at least 1,000 hours per year are lost due to vehicles being
unavailable. Assuming a reduction of 300 to �00 hours per year at an averaee rate of S45 per
hour, the value of the productivity gains is estimated at S 15,000 per year.
• Increased pre�=entive maintenance generates future cost avoidance by reducing the cost of
fleet care. A number of unanticipated repairs and vehicle failures occur due to insufficient
preventive maintenance. Based on recent experience, more preventive maintenance is
estimated to eenerate at least 530;000 in annual cost avoidance (i.e. six engines were lost in
FYli at a cost of��,000 to S6;000 each to replace and many vehicles were sent to outside
vendors for repair work).
• The largest area of cost a��oidance is extending vehicle life. On average, six to eieht General
Fund vehicles are replaced each year at a cost of approximately �250,000 (plus one or ri�-o
unplanned replacements during the year due to eneine failures, etc.). Extending the life of
vehicles throu�h additional preventive maintenance reduces the number of vehicles needed to
be replaced each year, for an estimated annual savings of S30,000 to �50,000.
• Additional savines are derived from a second recommendation to staff an in-house fleet
inventory control specialist as discussed in detail below.
Fleet Automotive Parts Inventorv
In 2003, the City entered into a contract �;�ith I�'APA to provide parts services for the Gazage.
The City was in the midst of a fiscal crises and the contract provided a one-time savings of
approximately �90;000 through the sale of on-hand inventory to NAPA, �vhich helped lessen the
impact of layoffs and drastic budget cuts. The contract was for a five-year term with five one-
year options and is currently set to eYpire in June 2014.
19-3
12/10/13, Item �9
Page 4 of 7
The contract ���ith NAPA includes a Parts Manager on site. The contract allows the Garage to
procure NAPA-branded parts at ���holesale costs; but NAPA charges a ]0% surcharge on all parts
as �vell as reimbursement for the Parts Manager salazy & benefits and a guaranteed monthly
profit margin. Based on a review of parts espenditures, the NAPA contract has not pro��ided
ongoing budget savings due to the follo���ing t���o reasons: 1) NAPA does not purchase non
NAPA-branded parls at lo��er rates than the Garage would pay and NAPA adds the 10%
surcharge; and 2) NAPA sells NAPA-branded parts at wholesale, but also adds the same 10%
mark up; diminishing the benefit of purchasing at wholesale.
The City incuned $�3;000 in additional compensation to NAPA in Fiscal Year 2012-li. The
Team recommends discontinuing the contract and redirecting the savings to�i�ards hiring a fleet
inventory control specialist to manage the inventor}� in-house. Benefits of managing the
im�entory in-house include:
• Competitive bidding to reduce parts costs (estimated annual savings of$25,000)
• Greater availability of parts/reduced wait time
• Greater coordination ��ith the mechanics to reduce disruptions
Classification Revie��
The department has worked ���ith the Human Resources Department to determine the appropriate
classification and compensation for the new Fleet Inventory Control Specialist position. The new
classification, bareaining �roup and E-Step bi-weekly salary is included in the table below:
x
� . �; � ,«_.,
. '�.�
Fleet Inventory Control Specialist CVEA $2,209.23
Im�entorv Management Svstein
To improve the availability of parts, the Team recommends implementing an inventory
management s}'stem applying LEAN principles such as Kanban. A Kanban is a signal �vhich
authorizes replacement of���hat has been used. Belo�v is an example of a rii�o-bin Kanban. The
number of parts in each bin is set based on the frequency of demand and order deliverv time so
that when the first bin is emptied; parts are reordered and received prior to the second bin being
depleted. The replenishment of the parts is triggered by actual consumption allo���ine for minimal
inventory levels while also maintaining sufficient parts on-hand.
Two-Bin Kanban
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19-4
12/10/13, Item /�
Pape 5 of 7
The Team recommends enaaging a LEA\i consultant to desien and implement the im=entory
manaeement s��stem and train the fleet in��enton� control specialist. The fleet inventor�� control
specialist «�ould be hired b� April, 2014 to have the inventory svstem implemented and the ne�ti�
person trained prior to expiration oF the I��APA contract in June, 2014. The strateev �rill prevent
disruption of sen�ice. The ne��� person n�ill be responsible for manaeing the imentor}
manaeement system; proactively obtainine competiti��e bids for parts, and stasine parts for
mechanics to improve ���orl:flo«�.
Mechanic Intemship Proeram
The Team also recommends allocating S2;000 to support stipends to support the internship
proeram «�ith South���estem Colieee. The funds ���ill be used to provide several stipends. The
internship proeram increases the capacity of the Gazage. Students 2ain valuable n ork experience
to pursue cazeers ��'ith the City or others.
Proeram Summarv
The proposed resolutions add one Equipment D4echanic and Fleet Inventon� Control Specialist
positions and amend the Fiscal 1'ear 2013-14 Central Garage operatino bud�et to appropriate
�6�,114 for the positions and S�;000 to eneaee the consultant to set up the inventory
manaeement system.
RELATIONSHIP TO CTTP'S STRATEGIC PL�\'
The Citv's Strategic Plan has five major goals: Operational Excellence, Economic Vitalitv;
Healthy Communih�. Strong and Secure Neiehborhoods and a Connected Communitv. This
action supports the goal of providine Healthy Communities; as keeping sen�ice vehicles in 2ood
���orkine condition allo���s staff to maintain and operate communiry and neiehborhood facilities.
This action also supports the eoal of providine Svong and Secure Nei2hborhoods; as keeping
police and fire ��ehicles in Qood���orkine condition helps ensure that the public is protected.
DECISION A'IAKER CONFLICT
Staff has revie���ed the decision contemplated by this action and has determined that it is not site
specific and consequentl}, the �00-foot rule found in California Code of Regulations section
18704.2(a)(1); is not applicable to this decision. Staff is not independentiv an�are, and has not
been informed b}� an�� Cit�� Councilmember, of am� other fact that mav constimte a basis for a
decision maker conflict of interest in this matter.
CtiRRENT YEAR FISCAL I�4PACT
Approval of the resolution �eill result in the appropriation of 570,114 to the Central Garage
Fund's personnel semices expenditure category. These expenditures will be offset by increased
billings to other departments revenue that is generated b}� fleet maintenance chazges that are
budseted �vithin various City funds. In addition; the supplies and services budgets of various
affected funds ��ill be amended to reflect increased fleet maintenance charees. The total impact
to other funds is �70;114, of��hich ��8;136 ���ill be reflected in the General Fund. The impacts
to other funds affected by this action ���ill be offset from the available fund balances within these
funds. These impacts are summarized on the follo��ing tables:
19-5
12/10/13, Item �n'/
Page 6 of 7
Central Garage O erations Fiscal Impact
E�EA'DITURES • CURRENT ' ONGOING
-- - PEAR .
E�ui ment Mechanic $43,7�0 $87,500
Invento - Control S ecialist $21,364 $87,200
Lean Consultant $5,000
Internshi Pro�ram Sti ends $2,000
Parts Procurement Savin s ($25,000)
Contract Com ensation Sa��in s ($53,000
TOTAL BUDGET ADJUSTMENT $70,114 $98,700
REVEA'UE BILLIIVGS TO OTAER DEPTS. 570,114 �98,700
NET IMPACT $0 $0
Other Funds Fiscal Im act - -
FLEET•MAIIvTTENANCE CIIARGES' ' .;:.;;:.� �� CURRENT:'°, ' ONGOING,
�,,' � - - �YEAR
GENERAL FUND:
Animal Care Facili � $701 $986
Develo ment Svcs. General Fund $3�3 $42�
Police $27,420 $38,600
Fire $10,006 $14,085
Public Works $19,282 $27,143
Recreation $424 $597
TOTAL GENEItAL FiTND �58,136 $81,838
OTHER FUIVDS:
Em�ironmental Services $531 $747
Central Garaee $240 $338
Transit $4,708 $6,628
Develo ment Services $501 $705
Sewer Service $5,998 $8,444
TOTAL OTHER FUNDS 511,978 $16,862
>TOTAL`BUDGET ADJUSTIVIENT :"i>- --:'.�"' ' ' ' - �70,1-14; ��..`�-�' '`.598;700
If the contract ���ith NAPA is discontinued, the Garage �vill be required to purchase all remaining
non-NAPA branded inventor}� on hand. However, only a small portion of the existing inventory
is non-I�'APA branded and the Garage staff will ���ork �vith the Parts Manager to limit excess
orders of non-NAPA branded inventary for the remainder of the fiscal year, such that parts
expenditures are not anticipated to eaceed the current operating budget.
ONGOING FISCAL IMPACT
The ongoing net fiscal impact to the Central Garage operating budget and corresponding increase
in billings to other departments is �98,700 as reflected in the fiscal impact tables. Departments
are anticipated to realize reductions in unanticipated repair and replacement costs and increased
productivity due to decreased ��ehicle donmtime. �
1 9-6
• 12/10/13, Item /�
Page 7 of 7
ATTACHbfENTS
1. Fleet Continuous Impro�ement Po���erPoint Presentation
2, NAPA On-Site Store Aereement
Preparedbv: d�ichaelLen�vel, SenrorManagement.9nalvsr
H:�PUBLIC WORf:S- EK'GWGEtKDA\C.AS2013U?-10-131FIttt Continous Improvcmena Aecnda StarementULEPORT-P\1'-Flee[ Connnous
Improvemrnt A_enda S[acementdoc
19-7
RESOLUTION NO. 2013-
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
CHULA VISTA AMENDING THE COMPENSATION
SCHEDULE AND CLASSIFICATION PLAN TO REFLECT
THE ADDITION OF A FLEET' INVENTORY CONTROL
SPECIALIST
�T�HEREAS, the City has a contract with NAPA to provide parts services for the Gara�e
that is set to espire in June 2014 and it is being recommended to discontinue the contract and to
hire a new employee to implement and manage an in-house im�entory management system; and
WHEREAS, the Human Resources Department worked with the Public V✓orks
Department to determine the appropriate classification and compensation for the position based
on the proposed workload and scope of responsibility; and _ _
R'HEREAS, the recommended Fleet Inventory Control Specialist position is a ne��
classification title that is not currently reflected in the Compensation Schedule and Classification
Plan.
NOW, THEREFORE, BL IT RESOLVED that the City Council of the Cit}� of Chula
Vista does hereby amend the Compensation Schedule and Classification Plan to reflect the
addition of the Fleet Inventory Control Specialist.
Presented by Approved as to form by
% //�� /��
/Ylrt�iyl // v
Richard A. Hopkins Glen R. Googins
Director of Public Works City Attorney
J:�Attornev\FINAL RESOS AND ORDINANCES4013\I2 10 13\RESO-PN'-A-Pleet Inventorr Control Specialist doc
I V25/2013 12:48 PD1
19-8
RESOLUTION N0. 2013-
RESOLUTION OF THE CITY.COUI�iCIL OF THE CITY OF
CHULA VISTA A��fENDIi�'G THE FISCAL YE.AR 2013-1�
AUTHORIZED POSITION COUi�TT FOR THE CENTRAL
GARAGE OPERATIOI�'S FUND TO ADD A 1.0 FTE
EQUIPA7EI�'T n4ECHANIC AI�TD A 1.0 FTE FLEET
Il�iVENTORY COI�'TROL SPECI.ALIST A\TD
APPROPRIATII�TG FUNDS ACCORDINGLY
\�'HEREAS, the City of Chula Vista is committed to ma�:imizin2 its service deliven�
through continuall}� looking to eliminate waste in its deliven� processes and maximizing the
value of those semices to our customers an one of the initiatives under the cit��ride strateeic plan
is to implement Continuous Improvement efforts throuehout the or2anization; and
\'�'HEREAS, the Central Garaee Operations ���ithin the Public �'�'orks Department sen�ices
vehicies and equipment for Cit}� departments and «ith reduced staffina and an agine fleet, the
Central Gazaee Operations has not been able to meet its eoal for the percentase of scheduled
pre��entive maintenance inspections ("PMs ') that aze completed each month; andy
NHEREAS, a Continuous Improvement principle is that investment in preventive
maintenance is much more cost effective than performin2 repairs and addine one additional
equipment mechanic to the Central Gazage Operations is being recommended to increase the
percentaees of P�4s that aze completed each month; and
�'�'HEREAS, the City has a contract ���ith NAPA to provide parts services for the Garaee
that is set to eapire in June 2014 and it is beine recommended to discontinue the contract and
hire a Lean consultant to implement an inventorv manaeement system and to hire a fleet
in��entory control specialist to have the s}�stem implemented and the ne�+� person trained prior to
expiration of the\'APA contract in June to prevent any disruption of service.
\'OW. THEREFORE. BE IT RESOLVED that the Cirv Council of the Citv of Chula
Vista does hereby amend the fiscal ��ear 2013-14 position count for the Central Gazaee
Operations Fund to add an equipment mechanic and a fleet im�enton control specialist; and
BE IT FURTHER RESOLVED that the Citv Council of the Citv of Chula Vista does
hereby appropriate �6�,114 to the fiscal vear 2013-14 Personnel Services cateeory and 5�;000 to
Supplies and Sen�ices cateeor}� of the Central Gazage Operations budeet ��ithin the Central
Gazaee Fund to add the equipment mechanic and the fleet im�enton� control specialist and to hire
a Lean consultant to set up an in��entorv management system and does herebv appropriate to the
Supplies and Services category of the follo��ing funds to reimburse the Central Gara2e for the
additional expenditures.
1:Wttomey�FMAL RESOS AND ORDINA\CES�?Oli11? 10 liUtESO-PN'-B-Fleet Continous Improvement Agenda
" Statementdoc
1?l3l?013 9:31 �4\9
� 9-9
Resolution No.
Page 2 .
-- - - — . . - --- _-..--.:e..�.-. ,.. _. . -
;ELEET:MAINTENANCE�CHARGESr�aF:P:e:�i:€i�iCURRENT„YEAR t;;j
GENERALFUND:
Animal Care Facility $701
Development Svcs. General Fund $303
Police $27,420
Fi re $10,006
Public Works $19,282
Recreation $424
TOTAL GENERAL FUND $58,136
OTHER FUNDS:
Environmental Services $531
Central Garage $240
Transit $4,708
Development Services 5501 "
Sewer Service $5,998
TOTAL OTHER FUNDS $11,978
TOTAL: . . . . _. _.. ___E.:�..x V'i4;�:<:., n,:c�a:��-:-...__ . . _...__
BUDGET�ADIUSTMENT.`,-;-�,j;•�..;;;..•" ;;,�;4„y;':,:-� , ;S70:1i4
Presented b}� Approved as to form by
�-
Richard A. Hopkins G en R. Googins
Director of Public Works City Attomey
J:Wtrorney\FINAL RESOS AND ORDINANCES\?013V2 10 13\RESO-VN'-B-Fleet Continous Improvement Agenda
StatemenLdoc
12/3/?013 9:31 M9
19-10
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ON-SITE STORE AGREEMENT
THIS AGREEMENT is made and entered into this tenth day of June, 2008 ("Effective
Date"), by and between the CITY OF CHULA VISTA ("City"}, a municipal corporation,
276 4�' Avenue, Chula Vista, California 91910; and "��'s��� ��=`R" ' f`-�=��="��", a
Georgia Corporation ("Contractor"), with its principal place of business at 2999 Circle 75
Parkway, AUanta, Georgia 30339. City and Contractor are sometimes hereinafter
individually referred to as "Party" and hereinafter collectively referred to as the "Parties".
RECITALS _ _
WHEREAS, Contractor desires to establish inventory in a City location to service the
fleet paRs needs of City and to serve as the primary supplier of automotive replacement
parts and other goods as required by the City (the "Inventory"); and
WHEREAS, City desires to provide space for the Inventory on the premises of the City
for use by Contractor ("On-Site Store") and agrees that Contractor will be its primary
supplier of the Inventory pursuant to the terms herein.
NOW THEREFORE, in consideration of the mutual promises and covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency of which
are acknowledged, the parties hereto agree as follows:
ARTICLE 1 - DUTIES AND RESPONSIBILITIES OF CONTRACTOR
Contractor's duties include, but are not limited to, the foliowing duties and
responsibilities:
1. Contractor will establish and operate the On-Site Store at 1800 Maxwell
Rd., Chula Vista, California 91911, (John Lippit Public Works Center) and
provide the �nventory as agreed upon by Contractor and City.
2. Contractor shall provide all personnel management, parts and supplies.
5>45?"_
.ZOOb' — /7"�f
19-24
3. Contractor shall suppiy all paRs and shop supplies necessary to maintain,
repair and operate a fleet of vehicles and equipment including a full line of heavy
duty equipment parts, Original Equipment Manufacturer (OEM) parts, small
engine parts, agricultural parts, hydraulic hoses, fasteners, chemicals, tools and
equipment.
4. Contractor shall accept industry standard cores for rebuilding where the
parts are acceptable as core exchanges including water pumps, altemators, etc.
5. Contractor shall have access to and control over sufficient Inventory,
either by Coniractor's on-site or off-site stock in its own warehouse, which must
be within a 30 minute driving distance from the On-Site Store.
6. Contractor shall furnish at least eighty-fve (85%) percenl of the City's
parts requiremenis on demand and at least ninety-five (95%) percent of Citys
parts requirements by staR of next business day.
7. Contractor shall inventory City's present parts stock and supplies, and
shall purchase from City a mutually agreed upon amount of stocked parts and
supplies, so long as such parts and supplies are undamaged, in saleable
condition, and non-obsolete. Contractor shall resell these items to City on
consignment. City's purchase price to be consistent with the purchase plan listed
in Article 3.
8. Contractor shall provide stock and non-stock original equipment parts,
supplies and equipment, or aftermarket items in equal or higher quality.
Contractor shall provide a minimum Grade 5 for all fasteners. All hydraulic
equipment, components and parts must meet OEM and the Society of
Automotive Engineers {SAE) specifications.
9. Contractor shall not issue parts or supplies to City personnel without a
proper work order requisition. Contractor shall provide a receipt containing
specific information with items delivered to City employees for each work order
requisition. Said receipt shall contain specific tracking information, i.e.,
equipment number, reference number, receiving employee name, parts
quantities, part number and alpha description, price detail and any other data
deemed necessary for effective tracking and accounting.
10. Conlractor shall maintain warranty records of items sold to"city and issued
any credits including labor and parts, due to City that are covered under these
warranties.
11. Contractor shall provide City with full manufacturer's warranties and
Guarantees of Merchantability. Contractor shall pass through to the City the
benefit of all manufacturer's warranties that Contractor receives.
ssssz;i
19-25
12. Coniractor shall use current state of the art computer hardware and
software to control and report on its operations. Contractor shall work in good
faith to interface its computer system with City's computer tracking system. The
payment of any out of pocket costs of such interface shall be mutually agreed
upon by Contractor and City prior to commencing the interface.
13. Contractor shall use a bar coding system to identify by manufacturer part
number and track all parts. Said bar coding system will be readable by the
computer system used by Contractor and Contractor shall work in good faith to
integrate the bar coding system with the City system's inventory control plan. The
payment of any out of pocket costs of such integration shall be mutually agreed
upon by Contractor and City prior to commencing the integration.
14. Contractor shall enter auto parts supply dale into City's Fleet Management
software system. Contractor shall provide sufficiently trained, knowledgeable and
service oriented personnel to efficiently and effectively operate the total parts
function as detailed.
15. Contractor shall be responsible for hiring, slaffing, promoting, transferring
and dismissing any person employed in the performance of this Agreement.
Said employed persons shall be Contractor's employees. Contractor shall be
responsible for all wages, taxes, fringe benefits, work schedules and training of
these employees.
16. Contractor is responsible for any changes to the physical fayout or capital
improvements of the parts room. Upon termination of this Agreement, Contractor
shall repair and restore the Service Center to such condition as existed prior to
installation of the Inventory and to repair and to restore any damage caused by
the repossession;
17. Contractor shall provide specialized equipment required to successfully
operate the parts room, such as, printers, office machines, file cabinets, and
other equipment as needed.
18. Contractor, pursuant to this Agreement, shall only sell parts and supplies
to meet the City's Service Center needs. Contractor shall not sell or distribute
parts, supplies, goods, or services to any person or entity other than City from
the On-Site Store.
19. Contractor shall comply with all federal, state and City laws, directives,
orders, rules and regulations.
ARTICLE 2 - DUTIES AND RESPONSIBILITIES OF CITY
556527:
19-26
City shall have the following duties and responsibilities during the term of this
Agreement:
�. City shali provide, at its sole expense, usable space for the On-Site Store
and Inventory. City shall provide access to restroom facilities for Contractor
employees. Further, City shall fumish, at its sole expense, all utilities for the On-
Site Store including: water, sanitation, sewer, light, telephone, heat, gas,
electricity and all other utilities and services rendered or delivered to the On-Site
Store.
2. City reserves the right to purchase parts and or services from other
sources (i) if Contractor cannot obtain the desired part(s) by start of business day
following City's request, o� (ii) in emergency situations, including, but not limited
to, when any part is needed during a period outside of City's normal working
hours of 6:00 a.m. - 5:00 p.m.
3. City shall, at all times during the term of this Agreement, at City's sole
expense, maintain in good condition and repair (so as to prevent any damage or
injury to Contractor's Inventory or other personal property located in the On-Site
Store) the roof, exterior walls, foundation, and structural portions of the On-Site
Store and all portions of the electrical and plumbing systems lying outside of the
On-Site Store but serving the On-Site Store.
ARTICLE 3 - PAYMENT TERMS/PRICING
City shall purchase Inventory from Contractor, and Contractor shall provide services
hereunder, according to the pricing terms of Exhibit A attached hereto. The Parties
agree that the total amount paid by City to Contractor over the course of any single
fiscal year for Inventory (but not including other costs set forth on Exhibit A) will not
exceed Four Hundred Seventy-five Thousand Dollars (�475,000), unless approved by
the City Council. City shall not procure Inventory from Contractor that shall cause the
Ciry to exceed this amount, unless City has received approval for additional funds from
the City Council. Contractor shalf invoice the City for ail Inventory purchased pursuant
to this Agreement on a weekly basis. All invoices will be paid �viihin 30 (thirty) days of
City's receipt of invoice. Contractor shall keep complete, accurate, and detaited
accounts of Contractors cost for all Inventory purchased by City, and shall provide City
with all such accounting records upon request.
?56!2].2
19-27
ARTICLE 4— TERM
The initial term of this Agreement shall be for a five (5) year period beginning on the
Effective Date. The City Manager may extend the contract for an additionai five years,
however such extension, if any, shall be in one year increments. To extend this
Agreement the City shall notify the contractor in writing of its intent to renew the
Agreement at least sixty (60) days prior to the expiration of the initial term.
ARTICLE 5—TERMINATION
This Agreement shall be subject to tertnination by either party upon sixty days (60)
written notice. City may also terminate this Agreement if the City is prevented from
proceeding with the Agreement by law or official action of a public a�thority oiher than
the Ciiy, by the unavailability of City Funds, or if the Contractor violates any material
provisions of this Agreement. The City, may, by written notice to the Contractor,
terminate the contract if the Contractor has failed to perform its services in a manner
satisfactory to the City as per specifications, including delivery as specified.
Prior to cancellation of this agreement, the non-offending party shall advise the
offending party of any deficiencies and shall allow the offending party a ten (10) day
period to correct any deficiencies at the offending party's expense.
Any notice of termination tendered by either party pursuant to this Article 5 shall be
provided by a method of notification specified in ARicle 6 of this Agreement.
EFFECT OF TERMINATION. Immediately upon the expiration of this Agreement or the
termination of this Agreement by either party for any reason:
1. Contractor shall vacate the space being utilized ior the On-Site Store and
repair and restore the space to the condition existing prior to this Agreement,
normal wear and tear excepted.
556577.2
19-28
2. City shall purchase all non-NAPA branded Inventory, and shall have the
option to purchase NAPA branded Inventory, which is located in the On-Site
Store, at Contractor's acquisition cost.
3. Each party shall immediately retum to the other party all equipment,
software, books, records, tools and any other personal properry owned by the
other party that are in such party's possession. City shall aliow Contractor full
and unrestricted access to enter into the On-Site Store and immediately remove
all equipment and other items of personal property owned by Contractor without
being deemed guilty of trespass or any other violation of the law. All Inventory
records, sales history, sales analysis and all other information generated by
Contractor under this Agreement will be retumed to City.
4. Should Contractor fail to remove the Inventory not purchased by City or
other property of Contractor within sixty (60) days after written nolice from City as
provided by this Agreement, Contractor agrees that said Inventory or property
shall be deemed abandoned by Contractor. In the event of such abandonment
by Contractor, City may take possession of such Inventory or property and shall
not thereafter be liable to Contractor or its successors or assigns with respect to
the abandoned Inventory or property, including as any manne� of baifee of the
Inventory or property.
ARTiCLE 6 — NOTICES
Whenever any notice, demand or request is required or permitted hereunder, such
notice, demand or request shall be hand-delivered in person or sent via facsimile, by
overnight mail through a reputable service, or by certified mail, retum receipt requested,
to the addresses set forth below:
t<657i2
19-29
CITY CONTRACTOR
City of Chula Vista Genuine Parts Company
Steve Dorsey, Fleet Manager Mike Harris, District Manager
180Q Maxwell Rd. 7440 Convoy Court
Chula Vista, Califomia 91911 San Diego, CA 92111
Each such notice shall be deemed delivered (i) on the date of receipt if delivered by
hand, overnight courier service, or(ii) on the date five (5) business days after depositing
with the United States Postal Service if mailed by registered or certrfied mail. Either
party may change its address specified for this notice by giving the other paRy at least
ten (10) days written notice in accordance with this Section.
ARTICLE 7 - INSURANCE REQUIREMENTS OF CONTRACTOR
Contractor shall procure and maintain for the duration of the contract insurance againsl
claims for injuries to persons or damages to property which may arise from or in
connection with the performance of the work hereunder by the Contractor, his agents,
representatives, employees or subcontractors. The cost of such insurance shall be
borne by the Contractor. Failure to maintain or renew coverage or to provide evidence
of renewal may be treated by City as a materiai breach of contract.
Minimum Scope of Coverage
Coverage shall be at least as broad as indicated below:
1. Insurance Service Office Commercial General Liability coverage
(occurrence form CG 0001).
2. Insurance Services Office Form Number CA 0001 covering Automobile
Liability, code 1 (any auto).
3. Workers' Compensation insurance as required by the State of California.
Such worker's compensation insurance shall be endorsed to provide for a
waiver of subrogation against City.
4. Employer's Liability insurance.
Minimum Limits of Insurance
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Contractor shall maintain these policies and shall cause all parties supplying services,
labor, or materials to maintain the following insurance in amounts not less than those
specified below:
1. General Liability (including operations, products and completed operations):
$1,000,000 per occurrence for bodily injury, personal injury and property
damage. If Commercial General Liability Insurance or other form with a general
aggregate limit is used, either the general aggregate limit shall apply separately
to this projecUiocation or ihe general aggregate limit shall be twice the required
occurrence limit.
2. Automobile Liability: $1,000,000 per accident for bodily injury or property
damage. - -
3. Worker's Compensation: Statutory amount as required by the State of
CaliFomia.
4. Employers Liability: S1,000,000 per accident for bodily injury or disease.
Other Insurance Provisions
The general liability policy,and automobile liability policy are to contain, or be endorsed
to contain, the following provisions:
1. The City of Chula Vista, its officers, council members, officials, and
employees, are to be covered as additional insureds with respect to liability
arising out of automobiles owned, leased, hired or borrowed by or on behalf of
the Contractor, and with respect to liability arising out of work or operations
perFormed by or on behalf of the Contractor, including materials, parts or
equipment furnished in connection with such woric or operations. The coverage
shall contain no special limitations on the scope of protection afforded to
additional insureds. General insurance, liability coverage can be provided in the
form of an endorsement to the Contractors insurance, or as a separate owner's
policy{CG 20 10 11 85).
2. For any claims related to this project, the Contractor's insurance coverage
shall be primary insurance with respect to 'the City, its o�cers, officials,
employees and volunteers. Any insurance or self-insurance maintained by the
City, its officers, officials, employees or volunteers shall be in excess of the
Contractor's insurance and shall not contribute to it.
3. Each insurance policy required by this clause shall be endorsed to state
that coverage shall not be canceled or materially changed by either party, except
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19-31
after thirty (30) days prior written notice has been given to the City by certified
mail, return receipt requested.
4. Coverage shall not extend to any indemnity coverage for the aciive
negligence or misconduct of the additional insured in any case where an
agreement to indemnify the additional insured would be invalid under Subdivision
(b) of Section 2782 of the Civil Code.
Acceptability of Insurers
Insurance is to be placed with insurers with a current A.M. Best rating of not less than
A:VII.
Verification of Coverage -
Contractor shall furnish the City with original certificates and amendatory endorsements
affecting coverage required by this clause. All certificates and endorsements are to be
received and approved by the Chula Vista City Attorney's Office before work
commences. Contractor shall provide to the City insurance certificates certifying such
coverage upon renewal of its policies, or upon the City's request.
ARTICLE 8— INDEMNIFICATION
Contractor shall indemnify and hold harmless the City and its officers, City Council
Members, officials, employees, agents, and volunteers ("Indemnitees") from and against
any and all liability, claims, judgments, arbitration awards, settlements, costs (including
attorneys fees), demands, orders and penalties (collectively, "Claims") including, but not
limited to, demands arising from injuries or death of persons {Contractor's employees
included) and damage to property, arising directly or indirectly out of, relating to, or
pertaining to the performance of the program or work described herein which is caused
by any negligent or intentional wrongful act or omission of Contractor, any
subcontractor, anyone directly or indirectly employed by any of them or anyone for
whose acts any of them may be liable, except where caused by the acfive negligence,
or wiliful misconduct of the City.
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If any action or proceeding is brought against indemnitees by reason of any of the
matters against which Contractor has agreed to indemnify Indemnitees as provided �
above, Contractor, upon notice from City, shall defend Indemnitees at Contractor's
expense by counsel acceptable to City, such acceptance not to be unreasonably
withheld. Indemnitees need not have first paid for any of the matters to which
Indemnitees are entitled to indemnification in order to be so indemnified. The provisions
of this Article shall survive the expiration or earlier termination of this Agreement.
ARTICLE 9 - WARRANTY DISCLAIMER
All automotive parts supplied pursuant to this Agreement are subject to the terms of
written warranties provided by the manufacturer of each part, and Contractor shall use
reasonable commercial efforts to assist the City in processing all warranty claims that
the City may have against a manufacturer. This will include a) Researching the sale of
the part in question, b) Collecting all necessary documents for processing the warranty
claim, c) Processing the claim wifh the manufacturer, d) Credit the City's account
properly. Copies of the manufacturers' warranties shall be made available to City upon
request.
ARTICLE 10 - NO LIENS '
Except in the case of a breach of contract, the City warrants that it shall take no action,
including but not limited to the granting of a security interest, or fail to take any action, '
which would operete or does operate in any way to encumber the Inventory of
Contractor located in the On-Site Store.
ARTICLE 91 - pUIET ENJOYMENT
City represents and warrants to Contractor that so long as Contractor performs all Yhe
obligations of Contractor under this Agreement, Contractor shall have quiet and
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19-33
peaceful possession of the On-Site Store during the entire term of this Agreement and
City.
ARTICLE 12 — RELATIONSHIP OF PARTIES
No Agency relationship between the City and Contractor is intended or created by this
Agreement. Contractor is not authorized and shall not at any time or in any manner
represent that it is an agent, servant or employee of the City, it being expressly
understood that Contractor and its employees, officers and agents are and at all times
shail remain wholly independent under this Agreement and shail-not be construed for
any purpose to be employees of City.
ARTICLE 13 - LlMITATIONS OPl RIGHTS OF THIRD PARTIES
All obligations of a party under this Agreement are imposed solely and exclusively for
the benefit of the parties, and no other person shall, under any circumstances, be
deemed to be a beneficiary of such obligations.
ARTICLE '14 - SUCCESSORS AND ASSIGNMENTS
The provisions of this Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective officers, directors, employees, successors and
assigns. Notwithstanding the foregoing, the rights and obligations of either paRy to this
Agreement may not be assigned without the prior written consent of the other party
hereto, which consent shall not be unreasonably withheld.
ARTICLE 15 - CONFIDENTIALITY
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19-34
City and Contractor may, from time to time, acquire or otherwise receive confidential or
proprietary information conceming the other party's products, pricing, business affairs
and practices. In consideration of the confidential and proprietary nature of this
information, each party agrees as follows:
1. All confidential or proprietary knowledge and information received from the
other party shall for all time and purposes be regarded by the receiving party, iis
employees and agents as strictly confidential and will not be disclosed to any
third parties or to any of the other affiliates of the receiving party except to
perform obligations required herein, or except as otherwise required by law.
Contractor understands and acknowledges that City is a public local agency
subject to the California Public Records Act, Califomia Government Code
Section 6250, et seq. (the "CPRA"). In the event that City receives a request
under the CPRA for documents in the Cit�s possession or control that Contractor
has previously advised the City it considers to be proprietary, City wili notify
Contractor of such request and allow Contractor the opportunity to seek relief in
the appropriate court to prevent disclosure of the documents prior to expiration of
the statutory time period in which the City is required to respond to the request.
In the event any legal action or proceeding is brought against City seeking to
compel the disclosure of documents by Gity that Contractor considers to be
proprietary and has requested City not to disclose, Contractor shall indemnify
and defend City against such action or proceeding at Contractor's expense, with
counsel acceptable to City, such acceptance not to be unreasonably withheld.
2. Each party agrees to utilize any information provided by the other party
only for the purposes of carrying out this Agreement and further acknowledges
that it will not utilize any information provided by the other parly for any other
purpose including but not limited to directly"or indirectly competing with the other
party or otherwise assisting another person or entity in doing the same.
3. Within three (3) business days of the termination of this Agreement all
confidential or proprietary infortnation relating to the other party's products,
pricing, business affairs or practices shall be retumed to such other party.
ARTICLE 16 - EQUAL EMPLOYMENT
Contractor agrees that during the performance of this Agreement, it will not discriminate
against any employee or applicant for employment because of race, color, religious
creed, national origin, ancestry, sex, sexual orientation, age, physical handicap, medical
condition or marital status.
ARTICLE 17 - CNANGES, AMENDMENTS AND MODIFICATIONS
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No amendment to this Agreement shall be binding on either party hereto unless such
amendment is in writing and executed by both parties wiih the same formality as this
Agreement is executed.
ARTICLE 'IS — SEVERABILITY
In the event that any condition or covenant herein is held to be invalid or void by any
court of competent jurisdiction, the same shall be deemed severable from the remainder
of the Agreement and shall in no way affect any other covenant or condition herein
contained as long as the invalid provision does not render the Agreement meaningless
with regard to a material term in which event the entire Agreement shall be void. If such
condition, covenant, or other provision shail be deemed invalid due to its scope or
breadth, such provision shall be deemed valid to the extent of the scope or breadth
permitted by law.
I ARTICLE 19 —WAIVER
Waiver by any party to this Agreement of any term, condition, or covenant of this
Agreement shall not constitute a waiver of any. other term, condition, or covenant.
Waiver by any party of any breach of the provisions of this Agreement shall not
constitute a waiver of any other provision, nor a waiver of any subsequent breach or
violation of any provision of this Agreement. Acceptance by the City of any work or
services by Contractor shall not constitute a waiver of any of the provisions of this
Agreement.
ARTICLE 20 - ATTORNEYS FEES, COST.S AND EXPENSES
In the event litigation or other proceeding is required to enforce or interpret any
provision of this Agreement, the prevailing party in such litigation or other proceeding
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shafl be entitled. to an award of reasonable attorney's fees, costs and expenses, in
addition to any other relief to which it may be entitled
ARTICLE 21 - ENTIRE AGREEMENT
This Agreement, including Exhibit "A", is the entire, complete, final and exclusive
expression of the paRies with respect to the matters addressed therein and supersedes
all other Agreements or understandings, whether oral or written, or entered into
between Contractor and City prior to the execution of this Agreement. No statements,
representations or other Agreements, whelher oral or written, made by any party which
are not embodied herein shall be valid and binding unless in writing and duly executed
by the parties or their authorized representatives.
ARTICLE 22 - GOVERNING LAW; VENUE
This Agreement shall be interpreted, construed and governed according to the laws of
the State of Califomia. In the event of litigation between the parties, venue in state trial
courls shall lie exGusively in the County of San Diego, Superior Court, South County
Division, located at 500 3rd Avenue, Chula Usta . In the event of litigation in the United
States District Court, venue shall lie exclusively in. the Southem District of Califomia, in
San Diego.
ARTICLE 23 - MISCELLANEOUS
1. The parties waive any benefits from the principles of contra proferentum
and inierpreting ambiguities against drafters. No party shall be deemed to be the drafter
of. this Agreement, or of any particular provision or provisions, and no part of this
Agreement sha�l be construed against any party on the basis that the particular party is
the drafter of any part of this Agreement.
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2. A4reement Execution Authorization._Each of the undersigned represents
and warrants that he or she is duly authorized to execute and deliver this Agreement
and that such execution is binding upon the entity for which he or she is executing this
Agreement.
3. Counterparts. This Agreement may be executed in counterparts, and
when each party hereto has signed and delivered at least one such counterpart, each
counterpart shall be deemed an original and, when taken together with the other signed
counterparls, shall constitute one Agreement, which shall be binding upon and effective
as to all parties hereto.
4. Article titles, paragraph titles or captions contained herein are inserted as
a matter of convenience and for reference, and in no way define, limit, extend, or
describe the scope of this Agreement or any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date and year first above written.
CITY OF CHULA VlSTA GENUINE
PARTS COMPANY
��
Cheryl Cox Brad haffer
Mayor Division Vice President
ATTEST:
/I Gz,,�a � �h�,��
D nna Norris, C�ity Cler�i
APPROVE �AS' O FORM:
/
�M� �
ity Attornley
I
556527 2
19-38
Exhibit "A"
Compensation
Conttactor shall im�oice the City for all Inventory purchased, and all services rendered, pursuant
to this Ageement on a monthly basis according co the pricing plan below.
The overall ��oal of City's pricing plan is to achieve a ten percent (10%) net profit for
Contractor(the"]�et Profit TazgeY`) by adjusting the pricing of two elements:
(a) Prnduct Cosrs The pncing of[he Im�entory to be supplied to City by Contractor
pursuant ro this Ageement. Product Costs shalf be funher divided into `11'APA
Product Cn.crs," which is Ihe pricing of products manufactured by suppliers in
Contractor's normal supply chain; and "Nnn-A'APA Prndnc� Cnsts." which is the
pricing of products which have not been manufactured by Contractor's nortnal
suppliers but �vhich have been acquired for City by Contractor punuan[ to this
Agreement.
(b) Opera�ionaf Cosrs. Any and a11 costs and expenses associated with the operation
of the On Site Store(s) or the vehicles used by Contrac[or in ihe operation of the
On Site Store(s), including, but not limited to, salary and benefits payable to
Contractor emplo��eu at the On Site Store(s), worker's compensation benefits and
insurance, unemplo}Tnent insurance, personal property insurance for the On Site
Store(s) and Inventory; any deductible for losses co��ered under the personal
property, automobile liability or general liability insurance policies of Contractor
and all equipment supplied by Contractoc An example of a profit and loss
statement reflecting such costs and expenses is attached hereto.
PRICING PLAN Sli117i11AR1'
NAPA Product Costs Billed co City at a 10%�oss profit rate
Non-NAPA Product Costs Billed to City at a 10%gross profit rate
Operational Costs Billed to City at cost
Net Profit Target 10%net profit for Con[ractor
Both NAPA Product Costs and Non-\'APA Product Costs shall be set by Contractor to yield
a s�ross profit of ten percent (10%). Operational costs �+�ill be chareed [o City at cost, with all
such charges for Operational Costs to be included in City's month]y billing statement. City will
be billed at the end of each month for operational costs on an "in arrears"basis.
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I