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Date
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March 8,
2010
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Agenda
Item No. 35B Roll
Call No. 10-
Communication No. 10-134 Submitted by: Merrill R. Stanley, Deputy City
Manager |
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AGENDA
HEADING:
Approving the purchase of rubber-tired industrial
loaders and equipment accessories from Murphy Tractor and Equipment.
SYNOPSIS:
Recommend
approval to purchase two rubber-tired industrial end loaders with equipment
accessories in accordance with specifications in bid No. V10-044 from Murphy
Tractor and Equipment, Tom Voland, President, 5087 E. Broadway, Des Moines IA,
50317, for $265,434 with trade of two existing units. These units will be used by the Public Works
Department for year-round material loading and snow and ice control.
FISCAL
IMPACT:
Amount: $265,434
Funding Source: FY2010 Recommended Operating Budget, Equipment
Replacement Fund, IS201, CMO010407, page 53.
ADDITIONAL
INFORMATION:
Two existing rubber-tired loaders exceeding established
replacement criteria were identified and approved for replacement by the Fleet
Oversight Committee. One unit met the replacement
criteria of 10,500 hours of use in 2005, the other in 2007; however,
replacement was deferred due to insufficient funding. The machines now have
12,000 and 13,500 hours of run time. Repair costs have totaled $95,000 since the
time each machine met replacement criteria and have resulted in increased
operating costs and downtime since the scheduled replacement years. This repair history and the associated down
time clearly demonstrate the benefit of replacing these machines.
Ten bids were mailed and five were received. Bids
from RTL Equipment and Titan Machinery were not compliant in engine horsepower,
equipment weight, transmission and driveline, transaxle locking capability essential
for material loading, snow and ice control and auto reversing fan feature to
prevent dust and debris build-up to the cooling system. Titan Machinery also
submitted a bid for used equipment with similar non-compliant items. Bids received from Scott Van Keppel (Volvo
brand) and Murphy Tractor and Equipment Company (John Deere brand) were
compliant with specifications.
Bid specifications included requirements for stated fuel
consumption in gallons per hour and a guaranteed buy back amount at 5,000 hours
of use. Evaluations were made using the following life cycle cost components:
purchase cost, trade value of existing units, a buy back option from the
bidders at 5,000 hours of use and a medium-duty fuel efficiency rating for each
unit bid. The recommended loaders yielded the lowest overall net costs for
purchase and fuel based on 5,000 hours of use.
Various optional equipment accessories are included
in the recommendation, including material handling buckets, a multi-purpose
grapple bucket and adjustable fork attachment to increase the versatility and
use of each machine. An optional five-year
extended warranty is also recommended.
Although not part of the formal bidding process, staff
investigated alternate acquisition possibilities including Iowa Department of
Transportation contracts for equipment and accessories purchase, renting
equipment and lease purchase options. There
are not similar wheel loaders available on the State of Iowa contract at this
time. Renting a similar equipped loader
is available off of the Minnesota State Contract at a monthly rate of $4,950
per machine, for a total cost of $594,000 for two loaders for a five-year time
period. Lease purchase examples were
also received for the recommended loaders. Varying lease purchase options were evaluated
with an annual interest rate of 3.45%. Use of a lease purchase financed by the dealer
resulted in additional acquisition costs of $21,027 to $32,782 for a five-year
lease, depending on the buyout amount at the end of five years.
With the limited funding for general equipment
replacements, outright purchase results in the lowest overall annual operating
costs for year-round high-use equipment. Leasing options may be favorable for other
segments of the heavy equipment fleet that are seasonal or low-use.
PREVIOUS
COUNCIL ACTION(S):
Date: January 25, 2010
Roll
Call Number: 10-132
Action: Gabus
Ford, (Gene Gabus/General Manager) $175,303.55; Stivers Ford, (Don
Politte/General Manager) $145,738.00; and Toyota of Des Moines, (Steve Luebke/
Vice President/General Manager) $243,551.00 for 24 replacement vehicles for the
City’s fleet. (Council Communication No.
10-048) Moved by Meyer to adopt; refer to the City
Manager to schedule a workshop to discuss fleet inventory, criteria for
replacement, estimates for future years and possible leases rather than
purchases. Motion Carried 7-0.
BOARD/COMMISSION
ACTION(S): NONE
ANTICIPATED
ACTIONS AND FUTURE COMMITMENTS: NONE
For more information on this and other agenda items,
please call the City Clerk’s Office at 515-283-4209 or visit the Clerk’s Office
on the second floor of City Hall,