Loading...
HomeMy WebLinkAboutRes2016-005 Sponsored by: Hunt CITY OF SEWARD,ALASKA RESOLUTION 2016-005 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE PURCHASE OF A USED 2014 HITACHI ZC50U5 COMPACT EXCAVATOR FROM CONSTRUCTION MACHINERY INDUSTRIAL,LLC FOR AN AMOUNT NOT TO EXCEED$56,572.50,AND APPROPRIATING FUNDS WHEREAS, since 2008, the Public Works Department has annually leased a compact excavator to assist in daily duties from April through October,and the Harbor Enterprise Fund also leases an excavator routinely to accomplish their work during the same months; and WHEREAS,the City pays approximately$16,000 per year in lease fees for equipment for the Public Works Department's leased excavator; and WHEREAS,at the current lease rate,the City would pay an equivalent of the purchase price of a compact excavator every 4.5 years; and WHEREAS,the leased equipment will be available to all City departments to use,with each department paying the cost of the hours the machine is in use,as equipment rental fees to the Motor Pool Internal Service Fund; and WHEREAS, there are approximately 400 hours of use on the 2014 Hitachi Compact Excavator currently being leased,with an estimated 10+/-years of remaining useful life before any major overhauls will be necessary; and WHEREAS,having had possession of this piece of equipment since April 2015,the City's shop mechanics have inspected and operated the unit and find it to be fully functional and sound;and WHEREAS, Seward City Code 6.10.125 excludes from competitive procurement the purchase of used equipment, and when combined with the discount offered to the City for the purchase of used equipment currently being leased, the cost is estimated to be much lower than comparable used equipment. NOW,THEREFORE,BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD,ALASKA that: Section 1. The City Manager is hereby authorized to issue a Purchase Order to Construction Machinery Industrial, LLC for an amount not to exceed $56,572.50 for the purchase of the 2014 Hitachi ZC50U5 Compact Excavator. Section 2.Funding for the purchase of this equipment will utilize Motor Pool Fund reserves, CITY OF SEWARD, ALASKA RESOLUTION 2016-005 and since individual departments have not contributed to the Motor Pool for this purchase,individual departments utilizing the equipment will be assessed an hourly rental fee to be paid as lease rental payments into the Motor Pool Fund to forward fund replacement of the equipment. Section 3. The Motor Pool Enterprise Fund budget is hereby amended for 2016 to appropriate$57,000 from the Motor Pool Enterprise Fund reserves account 03000-0000-3400 to the capital equipment account no. 03000-0000-8103. Section 4. This resolution shall take effect immediately. PASSED AND APPROVED by the City Council of the City of Seward, Alaska,this 25th day of January, 2016. THE CITY OF SEWARD, ALASKA Jean Bardarson, Mayor AYES: McClure, Altermatt, Keil, Squires, Butts, Bardarson NOES: Casagranda ABSENT: None ABSTAIN: None ATTEST: J a hanna 'fey, CMC 'ity Clerk (City Seal) �.....t. .. oA OF SEl •g .,...... q . ate . at • S f .. EL ! • i —4.— i • .. ° e %F ••......... �w•,,F OF P � .\-�;;.`. Agenda Statement e cs Meeting Date: January 25, 2016 v ` To: City Council q P Through: City Manager, Jim Hunt From: Public Works Director, W.C. Casey Agenda Item: Approve the purchase of a used Hitachi ZC5OU5 Compact Excavator from Construction Machinery Industrial, LLC (CMI). BACKGROUND & JUSTIFICATION: Since 2008, the Public Works department has leased a compact excavator for use mainly in the Water/Wastewater departments. This equipment is instrumental in many of the day to day operations in Public Works and as with our other equipment,we periodically loan it out to other departments on an as-needed basis. The Public Works department does not have any type of excavator,other than a standard size backhoe,for use in our daily operations.The backhoe,while functional,is larger than often needed for our projects, requiring us to lease the compact sized excavator. This piece of equipment is used for many purposes in Public Works, and will be available for use by all departments, including the Harbor. These include,but are not limited to: 1) Access to tight work areas while leaving a small footprint a. Able to safely access many tight spots which would be risky with our large backhoe. b. Rubber tracks and lightweight design will enable us to dig without the large footprint left by the backhoe. c. Able to safely dig much closer to buildings. d. This compact unit is much more maneuverable and more precise than a backhoe. 2) Transport a. We will be able to quickly and easily transport a compact excavator behind our service truck using our existing 14 Ton trailer. b. This will greatly reduce the road time currently put on our backhoe. Less road time equates to less fuel consumption,less wear and tear,and less wasted employee time. 3) Uses Water/Wastewater a. Fire hydrant extensions and maintenance. b. All residential valve box work. c. Thaw wire locates. d. Manhole Repairs. e. Shallow water and sewer line digs (4'-6'). f. Safely lifting valves, manholes,pipe and other heavy materials. g. Grubbing fence lines and debris control. h. Assisting the Public Works department in advancing our mapping of the City's Water/Wastewater system. Many of the water/wastewater lines are documented in 30 old books, using trees, fence posts and building corners to provide the location of important water/wastewater services. Several years ago, the Water/Wastewater department began a project to physically locate all services and enter them into our electronic database. 4) Uses for the Street Department a. Preparing asphalt patches. b. Ditch cleaning, more efficient than a backhoe in many areas. c. Signpost and guardrail work. d. Alley grubbing. 5) Uses for the Parks and Recreation Department a. Many campground uses, including landscaping. b. All the new campground water lines are shallow buried PVC. In recent years we have dug and repaired several times a summer, this area is much more accessible with a smaller machine. Historically we have leased a compact excavator at roughly$16,000 per season(April—October) which does not include the cost of transporting the unit between Anchorage and Seward. In the past 5 years of leasing,we have paid lease fees of more than the purchase cost of the machine. If we were to purchase the machine in January 2016,the purchase price would be$56,572.50. If we continue to lease this equipment,we will be paying the purchase price every 4.5 years. It does not make fiscal sense to continue leasing this valuable piece of equipment. On average the leased equipment is used about 170 hours per lease period,and although the leased equipment is used,it currently has merely 400 hours of run time. It is reasonable to expect this piece of equipment to run 5000 hours before needing a major overhaul,giving us 10+/-years before major repairs or replacement of parts should be necessary. We did not secure bids from other vendors as the Compact Excavator is considered "used equipment" and is exempt from competitive procurement in 6.10.125. Since CMI will allow us credit from this lease rental,the cost is significantly reduced and we do not have to pay to return it to CMI, saving us additional cost. Having had this recent 9 month period to operate and inspect the machine,we are confident that it is sound and will give us hundreds more hours of use. INTENT: To purchase a 2014 Hitachi ZCX50U5 Compact Excavator from CMI for$56,572.50. CONSISTENCY CHECKLIST: Yes No N/A 1. Comprehensive Plan (document source here): X 2. Strategic Plan(document source here): X 3. Other (list): 31 FISCAL NOTE: Funds for this purchase are being appropriated from the Motor Pool Fund reserves. However,since no departments have paid into the Motor Pool to purchase this equipment, all departments will be able to share the equipment and will be charged equipment rental charges to be paid into the Motor Pool Fund as used,to forward fund replacement of the equipment. Approved by Finance Department: S -1/kA/L€, ATTORNEY REVIEW: Yes No Not Applicable_X_ RECOMMENDATION: fj Council approve resolution 2016- Or, authorizing the City Manager to purchase a 2014 Hitachi ZX50-U5 from Construction Machinery Industrial, LLC for$56.572.50.