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)
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Agenda Statement
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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.