REPORT TO THE CITY COUNCIL
FROM: MINDY CASTO, Interim Chief of Police
Police Department
BY: ROBERT BECKWITH, Acting Deputy Chief
Police Department
SUBJECT
Title
Actions pertaining to the Fresno Police Department’s Air Support “Skywatch” Unit lease purchase and installation agreements with Airbus, Inc. and Hangar One, Inc.
1. Award a sole source agreement with Airbus Inc. for a lease of 10 years in an amount not to exceed $4,700,833.01 including 8.35% tax for the purchase and maintenance of one H125 helicopter to provide airborne law enforcement, fire suppression, air ambulance, search and rescue and many other public and private operations with specific mission needs within the city.
2. Award a sole source agreement with Hangar One, Inc. for a lease of 10 years in an amount not to exceed $2,226,224.54 including 7.75% tax for purchase and installation of police equipment on the H125 helicopter.
3. ***RESOLUTION - Adopt a resolution authorizing an exception to formal bidding procedures and approving the sole source purchase of an Airbus H125 Helicopter for the Fresno Police Department (Subject to Mayor’s Veto)
4. ***RESOLUTION - Adopt a Resolution authorizing an exception to formal bidding procedures and approving the sole source purchase and installation of Police equipment on an Airbus H125 Helicopter for the Fresno Police Department (Subject to Mayor’s Veto)
Body
RECOMMENDATION
Staff recommends Council authorize the Controller to enter into an Equipment Lease-Purchase Agreement with Banc of America Public Capital Corporation (BAPCC) and the City of Fresno for the lease purchase of one Airbus H125 police helicopter in an amount not to exceed $4,700,833.01 including 8.35% tax and the installation of police equipment on a police H125 helicopter in an amount not to exceed $2,226,224.54 including 7.75% tax and adopt the resolutions authorizing the execution and delivery of the equipment lease purchase agreement.
EXECUTIVE SUMMARY
The Fresno Police Department seeks to purchase one Airbus H125 police helicopter, purchase and installation of police equipment on the H125 police helicopter that will provide public service and serves as a platform for various mission configurations. It is used in airborne law enforcement. The new helicopter will serve as support to our patrol officers on emergency response to critical incidents and 911 calls. The units will be purchased as replacements through a sole source without advertised competitive bidding.
The Police Department was authorized during the FY25 budget adoption process to lease-purchase one police helicopter for our Air Support “Skywatch” Unit to replace an aging 20+ year old police helicopter that is near the end of its useful life span and must be replaced. The new equipment will be lease-purchased and will improve the air support fleet and the public and should minimize out of service time and reduce repair costs. The cost for replacement one police H125 helicopter is approximately $4,701,000.
BACKGROUND
The Fresno Police Department owns and operates two EC120 Colibri helicopters to conduct airborne law enforcement operations. The helicopters were originally manufactured by American Eurocopter, which officially changed its name to Airbus Helicopters Inc. in 2014 (hereinafter “Airbus”). Airbus discontinued the manufacturing of EC120 helicopters in 2017 and began focusing on the production and sales of the more widely used H125 helicopter. Although Airbus continues to provide service support for the legacy aircraft, parts inventory availability has been limited.
The City of Fresno purchased the first EC120 helicopter new and directly from American Eurocopter in 2003. The helicopter is registered with the Federal Aviation Administration as N514JD and has more than 14,700 flight hours on it. The helicopter has been maintained in an airworthy condition and has served the citizens of Fresno well for the last 21 years. However, the increased unscheduled maintenance cost, limited parts availability, and outdated technology, justifies the purchase of a replacement helicopter.
As the need for a replacement helicopter became evident, members of the Air Support Unit considered several makes and models of helicopters within the same class as the EC120. The unit’s mission needs, service support, aircraft capabilities, and history of reliability were taken into consideration. The Airbus H125 helicopter surpasses other helicopters in class comparison. It is the only helicopter with similar flight characteristics as the EC120, which allows for seamless transition training for the pilots.
The larger ergonomic cockpit, open cabin, extended windows, and wider cabin interior of the H125 is conducive to the patrol mission of the Air Support Unit. The flight characteristics of the H125 exceeds its competitors in most areas of performance and will increase the efficiency and effectiveness of the Air Support Unit. The current weight and fuel limitations of the EC120 in the unique climate of the Central Valley will not be a significant factor with the H125.
Airbus Helicopters Inc. is the manufacturer of both the EC120 and H125. The City of Fresno and Airbus Helicopters Inc. have shared a long-standing positive relationship for over 20 years. Even with the EC120 part inventory strain on the industry, Airbus has continually advocated for and facilitated in acquiring necessary parts. The inventory challenges of the EC120 do not extend to the H125, as the H125 continues to be the most versatile and widely used helicopter in public service. The Air Support Unit’s maintenance staff have an established relationship with Airbus service support representatives. Maintenance personnel have acquired a large tool inventory that has been tailored for Airbus products, so there would be no need to expand their tool inventory.
The H125 is the most recent variant of the AS350 family evolution dating back to 1977. Seventy one percent of all intermediate single engine law enforcement helicopters delivered in North America since 2007 have been Airbus helicopters. The California Highway Patrol, LAPD, LASD and many other large California law enforcement agencies utilized the H125 in their air operations, which is a testament of their reliability.
The Airbus H125 and the EC120 have similar flight characteristics, instrument panels, and established emergency procedures. Within the class of helicopters that are viable options, the H125 is the only helicopter that has the same rotational spin of the rotor system. This makes the flight inputs during normal operations and emergency procedures to be consistent with the EC120, which allows for a seamless and rapid transition for the pilots. Although training pilots to apply opposite inputs can be accomplished with additional training, there could be some challenges with alternating between two helicopters with opposite rotor systems. Challenges would likely be amplified with the stress of any in flight emergencies.
Additionally, both the EC120 and the H125 use nearly identical Vehicle and Engine Multifunction Display (VEMD) system, which is unique to Airbus helicopters. The VEMD combines multiple engine monitoring readings into one display, which automatically displays the closest factor nearing the engine’s limitation. The Airbus developed VEMD lessens the pilot’s workload by providing several readings in one location, which allows the pilot to focus on the external environment through a quick and easy scan.
The Airbus H125 is the leading single engine light turbine helicopter in its class. It is the most widely used helicopter in public service and has a historical record of reliability. Not only is the Airbus H125 very similar to the EC120 it would be replacing, its increased capabilities and performance will allow for the expansion of the unit’s mission capabilities. The Fresno Police Department Air Support Unit has maintained a lengthy and positive relationship with Airbus Helicopters Inc. and has an appreciation for their service support commitment.
The purchase and installation of the police equipment will be handled by Hangar One Avionics, also utilizing the sole source process. Hangar One, located in Carlsbad, CA, has a proven track record for servicing aircraft for airborne law enforcement agencies. They also have experience in both helicopter and fixed wing installations and modifications. Hangar One is one of the few facilities in the country capable of integrating modern airborne law enforcement equipment into aircraft. As a member of the Airborne Law Enforcement Association, Hangar One actively stays at the forefront of technologies needed by law enforcement agencies to perform crime prevention, safety and rescue missions. Hangar One has worked with San Diego Police, Tucson Police, East Bay Regional Park Police, Placer County Sheriff, Stanislaus County Sheriff, U.S. Customs and Border Protection, California Highway Patrol, and U.S. Department of Justice, Drug Enforcement Administration (DEA).
When Airbus manages the helicopter completion, they coordinate the transportation of the base helicopter via ground transportation to Hangar One Avionics. Hangar One Avionics serves as a one stop shop for the second phase of a helicopter completion. They are preferred and certified for distribution and service support by numerous vendors supplying mission specific equipment. Hangar One’s established relationship with the various vendors allows for them to collaboratively troubleshoot any issues that arise during the complex integration of various electronic and data driven components.
Hangar One Avionics has been the Airbus Certified Completion Center since 2016 and is a member of the Aircraft Electronics Association. With a large facility and over twenty professionally certified technicians, they provide design engineering and in house fabrication of parts and wiring harnesses needed for installation. They have FAA Designated Engineering Representatives on staff to engineer, design, and review any electrical and structural modifications to meet or exceed FAA Aircraft Certification requirements. Hangar One uses state of the art computer aided software that integrates design and manufacturing systems for automated control, movement and precision of machine tools. Hangar One has a robust testing and quality assurance process, ensuring that all installed equipment is reliable, safe, and compliant with relevant regulations and standards. Hangar One Avionics does not use sub-contractors, and all work is completed on their site, eliminating the need to relocate the helicopter. Hangar One’s project management of all in house installations allows for a single point of contact, guarantees interoperability of systems, and ensures certain safety measures are in place to prevent oversight.
Hangar One Avionics has extensive experience with law enforcement helicopter completions and have completed similar projects for agencies throughout California and surrounding states. They are the only vendor on the West Coast with the experience, facility and staff to complete the complex completion project within a reasonably projected time frame. The locality of Hangar One Avionics being just over 300 miles from Fresno allows for ongoing service, maintenance, and warranty coverage to occur expeditiously, thus limiting the disruption of service the Air Support Unit provides to the community. In some cases, Hangar One technicians can respond to the Fresno Police Air Support Unit’s base of operation and avoid the need to move the Helicopter to the Hangar One Avionics facility.
Feasibility research into a replacement helicopter has been ongoing for several years. Equipment evaluation, rough order of magnitude estimates, and detailed quotes have been revised annually to account for market cost increases. The simplest approach is for Airbus Helicopters Inc. to manage both phases of the mission ready helicopter production. The initial quote for the base Airbus H125 helicopter and their managed completion through a sub-contracted agreement with Hangar One Avionics for the purchase and installation of all mission specific equipment was over $7.2 million before taxes. At a .0835 tax rate, the Airbus quote for a mission ready helicopter was $7,801,200.
In search of a cost saving alternative, we bifurcated the process and explored a split configuration approach. We requested a quote from Airbus Helicopters Inc. for a base helicopter with the required options that needed to be installed during the manufacturing phase. The reduced Airbus quote is $4,338,563 before taxes. At a .0835 tax rate, the Airbus quote for a base helicopter with limited options installed during the manufacturing phase is $4,700,833.01.
We examined the proposed equipment list from Hangar One and eliminated several non-essential equipment options. We were able to acquire a discount price for a new camera system through our relationship with the vendor and the discount is reflected in the updated quote we received from Hangar One Avionics. The direct quote from Hangar One Avionics allowed for us to avoid the Airbus management fee and equipment price markup, rendering a significant cost savings. The current Hangar One Avionics quote is $2,066,101.66 before taxes and $2,26,224.54 at a .0775 tax rate. Over 75% of the cost is for equipment and less than 25% of the cost is for labor and installation.
The split configuration approach of purchasing a base helicopter from Airbus Helicopter Inc. and contracting directly with Hangar One Avionics for the purchase and installation of essential mission equipment will reduce the overall cost of a mission ready police helicopter by $861,745.
Since Airbus would no longer be managing the completion of the helicopter, we would be responsible for accepting it at their production center in Columbus, Mississippi. We will assume the responsibility of transporting the helicopter from the production center in Mississippi to Hangar One Avionics in Carlsbad, CA. The cross-country flight will take approximately three to four days. The cost of fuel, per diem, and hotel rooms for 3 pilots will be minimal with respect to the overall cost savings.
Hangar One Avionics is the certified completion center for Airbus helicopters and the preferred installation and service center for many of the vendors who will be supplying equipment during the helicopter completion. Their locality within the State of California allows for continued warranty service and support within reasonable proximity. Their large state of the art facility, advanced engineering design and fabrication ability, certified technicians, and lengthy experience with police helicopter completions, makes them uniquely qualified to meet the specific needs of our helicopter mission equipment project. Therefore, I am requesting Hangar One Avionics be deemed the sole source provider for the purchase and installation of all mission critical equipment for the completion phase of our helicopter project.
The current FY 2025 budget includes one half ($300,000) of the estimated annual payment of $600,000. Given that the helicopter’s delivery is anticipated in the spring of 2025, lease payments will begin in FY 2026. Therefore, the required downpayment of $1.3 million per the Purchase Contract will be funded by existing resources from current fiscal year appropriations including the currently budgeted $300,000 lease payment, along with available appropriations in the Asset Forfeiture fund, and in the Contract Law Enforcement Services fund.
In an effort to lock in the price of the Airbus H125 Police Helicopter and not be moved to the back of the purchase list; there is an urgent need to have this purchase reviewed and approved by City Council before September 30, 2024. After this date, the price will increase between 5-10% and the strong possibility of not being able to lease/purchase a helicopter until 2027. In addition, the 12-year FFA requirement inspection will be required on the EC120 in 2027 and the helicopter grounded during this time. The first 12-year inspection that occurred in 2015 resulted in approximately $300,000 in repairs. Because the current helicopters are over 20+ years old and parts are no longer available or limited availability, there is a critical need to start the process of securing a new helicopter.
The General Services Department Purchasing Division has reviewed and approved the purchase agreement and sole source resolutions. The City Attorney has reviewed and approved as to form.
ENVIRONMENTAL FINDING
By the definition provided in the California Environmental Quality Act (CEQA) Guidelines Section 15378, the award of this contract does not qualify as a project as defined by CEQA.
LOCAL PREFERENCE
Local preference did not affect the award of this agreement because there was only one vendor who can provide the helicopter that will result in a seamless transition from the existing EC120 helicopter to the new H125 helicopter; and one vendor who can complete the purchase and installation of the police equipment required for the helicopter.
This contract would be awarded as a sole source, meaning local preference would not apply since there is a single provider of the specified equipment and one single provider of the installation of equipment.
FISCAL IMPACT
Sufficient funding for the $1.3 million downpayment is included in the FY 2025 budget. The General Fund will be used for future lease payments. The lease payment schedule will be included in the annual budget request for appropriations beginning in FY 2026. The estimated annual obligation of $600,000 will be requested in each budget year accordingly.
Attachments:
Airbus, Inc. Purchase Agreement
Sample Product Purchase Contract for Hangar One, Inc.
Hangar One, Inc. Quotation
Airbus, Inc. Sole Source Resolution
Hangar One, Inc. Sole Source Resolution