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HomeMy WebLinkAbout9B - Tractor Purchase Parks . MEETING DATE: AGENDA # PREP ARED BY: APPROVED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT MARCH 6, 2000 9B AL FRIEDGES, PARK SUPERVISOR I ( PAUL HOKENESS, PARKS & RECREATION DIRECTOR CONSIDER APPROVAL OF RESOLUTION O~ AUTHORIZING THE PURCHASE OF ONE (1) 83. H~ MECHANICAL FOUR WHEEL DRIVE TRACTOR FOR PARK MAINTENANCE THROUGH THE STATE COOPERATIVE PURCHASING PROGRAM. History The purpose of this agenda item is to authorize the purchase of one (1) 83 horse power Mechanical Four Wheel Drive (MFWD) tractor through the State of Minnesota Cooperative Purchasing agreement. Current Circumstances The Parks Maintenance Department relies heavily on this piece of equipment year around for athletic field maintenance and turf maintenance including: fertilizing, seeding, aerating, top dressing, snow removal, ice rink maintenance, and a variety of other Parks Maintenance tasks. This tractor is also utilized by the Public Works Department for ditch and boulevard mowing. The City currently has two (2) tractors which are utilized year round. This new tractor would replace a 1978 John Deere tractor with 14,343 service hours. Yearly as a part of the Capital Improvement Program the City Council adopts an equipment replacement fund and matrix. The purpose of the equipment replacement fund and matrix is to identify and budget for equipment and vehicles which need replacement due to age and wear, or for additional equipment which needs to be purchased. All equipment identified in the matrix is subjectto Council approval. The Issues Typically the engines, transmissions and drivetrains on tractors are capable of operating approximately 4,000 - 5,000 hours before needing major repairs and overhauls. With the growth of the Park System, the current average is 500 hours per machine annually. The Equipment Replacement Matrix suggests replacement of these tractors every ten (10) AGMfWD.DOC I 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER years. Although ten (10) years or 5,000 hours is a suggested replacement schedule for this type of equipment, as with any other piece of equipment the maintenance and repair costs are analyzed prior to requesting Council approval for future replacements. The John Deere tractor to be replaced has had the engine overhauled twice. This piece of equipment has no cab to protect the operator from the elements and is undersized from a horse power perspective for many of our attachments. To keep this tractor operational an estimated $9,550.00 would be needed for repairs. We believe that considering the age and hours accumulated on this equipment that it should be replaced. See attachments A and B. Conclusion There is $41,948.00 identified for the purchase of one (1) tractor in the Parks & Recreation Department Equipment Matrix which was identified in the Capital Improvement Program. Shown below is a comparison of the new and old tractor: Existing Equipment Replacement Equipment 1. Equipment Description: 1978 John Deere 301A 2000 Case/IH CX100 2. Equipment Condition: Poor New 3. Equipment Hrs./Miles 14,343 0 4. Primary Use Turf Maintenance Turf Maintenance Secondary Use: Athletic Field Athletic Field Public Works Maintenance Public Works Maintenance 5. Useful LifelDepreciation Term: 10 Years 10 Years 6. Equipment Age: 22 Years New . 7. Acquisition Date: 1978 2000 8. Acquisition Cost: $9,980 $39,834.46 9. Matrix Budget Amount: N/A $41,948.00 plus tax 10. Depreciation: $8,980 NIA Existing Equipment Replacement Equipment Ill. I Present/Trade-in Value: I $1,000 I N/A AGMFWD.DOC 2 12. I Projected Equipment Retention I N/A II 0 Years Schedule: 13. I Net Cost After Trade-in: I N/A I $38,834.46 14. I Total Cost Including Tax: I N/A -1 $41,358.70 The State Cooperative Purchasing Program has prepared specifications and solicited bids for 80+ horse power tractors. The bids are shown below: For comparison sake, staff did solicit a bid from H & W Equipment who is not on the State bid and they were $191.21 higher than the lowest vendor on the State bid. (shaded) Vendor Make & Model Horse Power Price Trade-in Sub- Total Tax Total AGMFWD.DOC Matejeck Implement CaselIH CX 100 83 $39,834.46 $1,000 $38,834.46 $2,524.24 $41,358.70 ilill'III.I~lllllil!1 ~~:c~~~ter . ~~fand TS 11111111.1111'11111,11111,11111\1'1\1\1.1\1111\1111111\1\1 90 \\\:$,!m~l\l4;\II\:\:\:\\\ $42,882.00 ..~,*.".~r:l~'~~....'.. $ \:\:\Ji\~d~~$iit9IIf\:: 1 ;500.00 :.f:l~.:':':.: $41 38200 .:~&:::::::: , . ::::::;:;;; $$268983 . . . . . ...j:::::~::: ) . :\\\$.~\~:*il.~~!:~I\:\\\: $44,071.83 Northfield Northfield Waconia Tractor Tractor Farm Supply John Deere John Deere Massy 6255 6310 6410 80 90 85 $41,466.13 $43,678.49 $46,469.00 No bid No bid $500.00. $41,466.13 $43,678.49 $45,969.00 $2,695.29 $2,839.10 $2,987.98 $44,161.42 $46,517.59 $48,956.98 Cost Benefit Analvsis With the age, amount of hours and wear on the 1978 John Deere 301A, costly repairs and down time have occurred. (Also, according to local implement representatives, the present day trade-in value on a ten year old machine is $15,000 to $20,000 vs. the $1,000 we are receiving for the now 22 year John Deere. In the future these machines should be traded when they are 10 years old and the engines and drive trains have accumulated approximately 5,000 hours if we wish to maximize our trade in). Citv Council Purchasing Criteria At the February workshop the City Council discussed purchasing for the year 2000. Some guidelines were discussed and the purchasing policy was reviewed. The criteria the Council discussed and how this purchase addresses each criteria is shown below: . Use minimum requirement specification not listed wants. . The work performed by the tractor dictates the type and size of equipment. The vehicle is used year around (turf, snow removal and 3 ditch maintenance) and therefore requires a cab. The existing tractor has a 50 horse power engine. The replacement will have an 83 horse power engine to drive the tractor, its hydraulics, and power take off unit which powers the attachments. Use functional requirements not an individual manufacturer's specifications. . The specifications. were prepared by the State purchasing department employees based upon their experience with equipment and the need expressed by public agencies purchasing from the bid. In this instance bids were provided by the following manufacturers: Case/IH, New Holland, John Deere and Massy confirming that there was an opportunity for more than one manufacturer to bid. Receive where possible three real bids. . Bids were received from five bidders with a $6,000.00 difference from high to low. To confirm the validity of the State bid we requested a quote on the same equipment form a non State bid vendor. The State bid was $191.00 less. Time for the City Council to Act. . If the City Council desires additional information this item could be deferred. Utilize some form of financial analysis to support the purchase. As an alternative to purchasing this equipment, we investigated possible lease options. Matejeck Implement provided the following information: The lease to purchase option is as follows: 1st year $9,700.00, 2nd year $9,700.00, 3rd year buyout $29,325.00, total $48,725.00. Renting may be an option but only if they have the tractor available. The rental rate would be $25.00 per daily hour (not engine hours) with a minimum of 8 hours, and the City would transport. We are now using this equipment an average of 500 hours per year. We have also calculated a life cycle cost for the equipment being replaced. These costs are affected by the original vehicle cost, and the fact that we retained the tractor for 22 years, and its present condition. AL TERNA TIVES: The alternatives are as follows: 1. Approve Resolution OO-xx authorizing the trade-in of our currently owned 1978 John Deere 301A tractor for $1,000.00 and purchase one (1) 2000 CaselIH 83 horse power Mechanical Four Wheel Drive tractor for the cost of$41,358.70 (tax included). 2. Table this item for a specific reason. 3. Deny this item for a specific reason. AGMFWD.DOC 4 . RECOMMENDED Staff recommends alternative number 1. MOTION: REVIEWED BY: AGMFWD.DOC 5 RESOLUTION OO-xx RESOLUTION APPROVING THE PURCHASE OF ONE (1) CASE/IH CX100, M.F.W.D. TRACTOR MOTION BY: SECOND BY: WHEREAS, the 2000 Equipment Replacement Fund & Matrix identifies the purchase of one (1) replacement tractor; and WHEREAS, the tractor being replaced is a 1978 John Deere 301A; and WHEREAS, the tractor will be purchased through the State of Minnesota Cooperative Purchase which has prepared specifications and received bids as follows: Matejeck Rochester Northfield Northfield Waconia Vendor Implement Tractor Tractor Tractor Farm Supply Make & Case/IH New Holland John Deere John Deere Massy 6255 Model CX100 TS 11 0 6310 6410 Horse Power 83 90 80 90 85 Price $39,834.46 $42,882.00 $41,466.13 $43,678.49 $46,469.00 Trade-in $1,000 $1,500.00 No bid . No bid $500.00 Sub-Total $38,834.46 $41,382.00 $41,466.13 $43,678.49 $45,969.00 Tax $2,524.24 $$2,689.83 $2,695.29 $2,839.10 $2,987.98 Total $41,358.70 $44,071.83 $44,161.42 $46,517.59 $48,956.98 WHEREAS, Matejeck Implement appears to be the lowest responsible bidder in the amount of $41,358.70. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA, to approve the purchase of one (1) Case/IH CX100 tractor through the State of Minnesota Cooperative Purchasing Agreement from Matejeck Implement at a cost not to exceed $41,358.70. AND FURTHER, trade-in of our 1978 John Deere 301 A is hereby authorized. Passed and adopted this 26th day of March, 2000. YES NO Mader Mader Ericson Ericson Gundlach Gundlach Petersen Petersen Schenck Schenck { Seal } City Manager City of Prior Lake 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER R"r Mt;:wn nor ___ . ' .....-.T-~-.-.-...-..---.----..- ------ Attachment A MEMORANDUM DATE: February 28, 2000 TO: AL FRIEDGES PARKS SUPERVISOR FROM: JON DONOVAN FLEET MAINTENANCE COORDINATOR SUBJECT: STATUS ON VEHICLE #301 1978 JOHN DEERE JD301-A TRACTOR SERIAL #T -36704 14,343 HOURS Engine: Engine needs overhaul (bums oil, hard starting and excessive smoke). I $3,600.00 Drive Train: Clutch needs replacement, differential leaks, rims rusting through. I $1,500.00 Hydraulic system: Operates slow, PTO slips, fluid leaks in several locations. I $1,400.00 Steering: All steering components worn out (excessive free play), rebuild steering box. I $1.400.00 Recore Radiator. I $250.00 Rewire and update electrical. I $600.00 Replace tires. I $800.00 TOTAL I $9,550.00 MEMO#30 I.DOC Life Cycle Cost for unit No.301 Date: February 29, 2000 For Year Ending: December 31, 2000 1. Vehicle Description: 1978 John Deere Tractor 2. Attachments: None 3. Original Purchase Price: $9.980.00 (include. all attachments) 4. Resale Price: $1,000.00 5. Scheduled Life Expectancy 10 Years 6. Usage Costs: a. Shop Hours 400 b. Shop Labor Costs: $10,000 ($25/Hr.) c. Parts/Materials: $5,000.00 d. Farmed Out Costs: $1,000.00 e. Insurance: Minimal f. Fuel Costs: $35,857.00 g. Downtime Replacement Rental: N/A h. Total Usage Costs:* $57,857.00* (b+c+d+e+f+g) 7. Total Mileage or Hours: 14,343 8. Depreciation (3-4): $8,980.00 9. Total Life Cost (6h+8): $66,837.00 10. Life Cycle Average Cost (9/7): $4.66/Hour 11. Life Cycle Average Cost for Vehicle Class: 12. Downtime in Hours This Year: 30 13. Downtime - Life of Machine: * 430 Hours* 14. Average Downtime By Class: 15. Estimated Future Maintenance $9,550.00* Expenditures (Attachments):* 16. Comments: * Indicates Estimates L1FECYC.DOC I ... ----.--...-..--..-..,..--.--....