REPORT TO THE CITY COUNCIL FROM: GREGORY A. BARFIELD, M.A., Director Department of Transportation BY: SHARLEE FLORES, Senior Management Analyst Department of Transportation BLAKE RINCON, Fleet Operations Specialist Department of Transportation SUBJECT ..Title Actions pertaining to acceptance of a gift exceeding $25,000 in value from Gillig, LLC to the City of Fresno: 1. Approve acceptance of unsolicited gift items from Gillig, LLC (Gillig) for accidental installation of Thermo King Air Purification Systems into twelve (12) Compressed Natural Gas (CNG) buses for a total value of $45,246.96. ..Body RECOMMENDATION Staff recommends Council accept the unsolicited gift items from Gillig for accidental installation of Thermo King Air Purification Systems into twelve (12) CNG buses for a total value of $45,246.96. EXECUTIVE SUMMARY The Department of Transportation/Fresno Area Express (FAX) deems it necessary to overlook the mistake made by Gillig in which Thermo King Air Purification Systems were installed into each heating, ventilation, and air conditioning (HVAC) unit of the 12 buses during their build. Given the expense it would cost Gillig to remove the installed Thermo King Air Purification Systems, Gillig does not wish to seek monetary compensation for their operational mistake, and instead would prefer that FAX accept the buses with the installed units free of charge. FAX understands that to be retained, all gifts over $25,000 must be accepted by City Council, and any department receiving gifts must furnish to the City Controller a report showing such gift within the first four weeks of July annually per Fresno Municipal Code � 7-105. BACKGROUND On December 14, 2023, City Council approved participation in a cooperative agreement with the Washington State Department of Enterprise Services (DES) which authorized the City to use the DES statewide purchase contract #06719-01 to procure CNG buses from Gillig at the same cost. The second item approved by Council that day was a purchase agreement with Gillig to procure twelve (12) 40' CNG buses. In reference to the purchase of twelve (12) 40' CNG buses through Gillig, selectable contract options were available for the bus builds through the cooperative agreement. The Thermo King HVAC Air Purification System was not included in the FAX bus purchase due to the additional cost. FAX staff communicated with Gillig staff both verbally and in writing not to include the optional Thermo King system in the bus build. FAX staff were subsequently informed by Gillig representative Tim McCunney that the buses were accidentally produced with the option included. Mr. McCunney stated in email communication that Gillig would prefer to leave the system on the 12 buses free of charge, as removing the system equipment would jeopardize the timeliness of the bus build and therefore would not be cost-effective. Item Quantity Unit Price Total Thermo King Air Purification System 12 $3,480.00 ea. $41,760.00 Sales tax @ 8.35% $3,486.96 Subtotal $45,246.96 ENVIRONMENTAL FINDINGS Pursuant to California Environmental Quality Act (CEQA) Guidelines Section 15378, the acceptance of these items as a gift does not constitute a project for the purposes of CEQA. LOCAL PREFERENCE Local preference is not applicable as this item seeks acceptance of a gift. FISCAL IMPACT There is no fiscal impact to the General Fund from this action. This item is being offered to the City at no charge, with no financial incentives to the offeror.