HomeMy WebLinkAboutRes2009-014Sponsored by: Oates
CITY OF SEWARD, ALASKA
RESOLUTION 2009-O14
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD,
ALASKA, AUTHORIZING THE CITY MANAGER TO PURCHASE, A CISED
BUCKET' TRUCK OUTRIGHT IN AN AMOUNT NOT TO EXCEED $250,000
RATHER THAN TO PURSUE PREVIOUSLY AUTHORIZED FINANCING
OF A NEW BUCKN:T TRUCK APPROVED IN RESOLUTION 2008-134 FOR
$510,000, AND APPROPRIATING FUNDS
W IIF,RF,AS, the Seward City Council approved Resolution ?008-134 on December 8, 2008,
authorizing the city manager to select and lease/purchase an Altec bucket truck for the electric utility,
in an ~unount not to exceed $510,000; and
WHEREAS, staff researched various purchasing options and identi Pied a used bucket truck
that would meet the needs of the department at a cost of $232,066.37, including a 24-month
extended warranty, and delivery to Anchorage; and
WHEREAS, staff recommends adding a contingency to the purchase price to cover the cost
of shipping from Anchorage to Seward, as well as other potential contingencies, bringing the not-to-
exceed amount to 5250,000.00; and
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WHEREAS, financing this piece of equipment was expected to cost 5510,000 plus
approximately $106,000 in interest over a period of seven years, for a total cost of $616,000;
therefore, purchasing the used equipment outright, rather than financing a aew piece of equipment,
will save the motor pool more than $366,000 over what was authorized in Resolution 2008-134; and
WHEREAS, this outright purchase is expected to result in a projected cash balance in the
motor pool at 12/31 /09 of approximately $890,000; and
WHEREAS, Seward City Code §6.10.125 exempts from competitive procurement
provisions, the purchase of used equipment, where the City Council determines the public interest is
best screed by purchasing a piece of used equipment .
NOW, THEREFORE, BE IT RF,SOLVED BY THE CITY COUNCIL OF THE CITY
OF SEWARD, ALASKA that:
Section 1. In accordance with Seward City Codc §6.10.125, the Seward CityCouncil hereby
finds that it is in the public interest to purchase a used bucket truck from Global Rental Company, in
an amount not to exceed $250,000.
Section 2. The City Manager is hereby authorized to purchase a used bucket truck from
Global Rental Company in an amount not to exceed $250,000.
CITY OF SEV1'ARD, ALASKA
RESOLUTION 2009-01.4
Section 3. The 2009 Budget included $80,773 as an annual payment for this equipment,
necessitating an additional appropriation of $169,227 to purchase the bucket truck outright, with
funding appropriated as follows: $65,412 from principal account no. 102-1020-5810; $15,361 from
i nterest account no. 102-1020-5820; and $ ] G9,277 from Motor Pool Unrestricted Net Assets account
no. 102-0000-3050 to equipment account no. 102-1020-5930.
Section 4. This resolution shall take effect immediately upon its adoption.
PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 2nd day of
March, 2009.
THE CITY OF SEWARD, ALASKA
a' - l -~ ~
Bob Valdatta, Co ncilmember
AYES: Bardarson, Smith, Kellar, Keil
NOES: None
ABSENT: Dunham, Corbridge
ABSTAIN: None
ATTEST:
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Council Agenda Statement
Meeting Date: March 2, 2009
To: Phillip Oates, City Manager
From: Jeff Estes, Electric Utility
Item: Purchase of Used Bucket Truck
BACKGROUND & JUSTIFICATION:
The City Council authorized the purchase of a new bucket truck for the electric department, in
December, 2008. The estimated cost of a new bucket truck was $510,000, which was what
Council authorized the city manager to spend to purchase a new truck. The initial Council
authorization was to finance the purchase of the truck, rather than to purchase it outright.
Electric department staff researched various options for purchasing a bucket truck, and found an
exceptional deal on a used piece of equipment located in Portland, Oregon. This truck has less
than 3,100 miles on it, making it near-new condition. To ensure the quality of this truck, the city
manager authorized our electric department operator/mechanic to travel to Oregon to evaluate
the truck, and we strongly recommend purchase of this truck. Given that this used truck is on the
market for sale, we must act quickly to secure the truck, or risk losing it to another buyer.
The finance department was prepared to go out to bid on financing for a bucket truck. However,
it would take at least six weeks to obtain financing, and it is questionable as to whether we would
be able to obtain competitive financing for a piece of used equipment. Therefore, we
recommend the purchase of this equipment outright. In addition, by purchasing the equipment
outright, we expect to save approximately $106,000 in interest costs that we would expect to pay
for this truck over the next seven years.
CONSISTENCY CHECKLIST: Where applicable, this agenda statement is consistent with the
Seward City Code, Charter, Comprehensive Plans, Land Use Plans, Strategic Plan and City Counci]
Rules of Procedures.
FISCAL NOTE:
The Council authorized alease/purchase for this bucket truck in the amount of $510,000, plus
estimated financing costs of approximately $106,000, for a total anticipated cost of $616,000.
By purchasing outright at a cost of $250,000, the total savings will be approximately $366,000
over what was authorized in Resolution 2008-134, resulting in a motor pool cash balance of
approx. $890,000 at December 3l, 2009.
Approved by Finance Department:
RECOMMENDATION:
Council approve Resolution 2009-014, authorizing the City Manager to purchase outright, a used
bucket truck from Global Rental Company.