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Home My WebLink About11A - Wheel Loader Resolution 4646 Dakota Street S.E. Prior Lake, MN 55372-1714 CITY COUNCIL AGENDA REPORT MEETING DATE: AGENDA #: PREPARED BY: JANUARY 16,2007 11A CRAIG ELDRED, STREET AND UTILITIES SUPERVISOR CONSIDER APPROVAL OF A RESOLUTION AUTHORIZING THE PURCHASE OF ONE (1) WHEEL LOADER THROUGH THE STATE COOPERATIVE PURCHASING PROGRAM AGENDA ITEM: DISCUSSION: Introduction The purpose of this agenda item is for Council to authorize the purchase of one (1) wheel loader through the State Cooperative Purchasing Program. Historv The Public Works Maintenance Department which includes street, utility and park maintenance utilize two loaders year round for maintenance projects. The uses include: snow plowing and loading on city streets, excavation for trail construction and large street repairs including water main and sewer repairs, placement of docks and fishing piers, placement of storm and sewer structures, tree planting with tree spade and off loading of materials from delivery trucks. Current Circumstances The two current loaders utilized are: 1. One 2001 Cat, model 938G, which is a 160 h.p. 27,700 pound machine. 2. One 1995 Case model 621 BXT, which is a 116 h.p. 26,500 pound Yearly, as part of the Capital Improvement Program (CIP), the City Council adopts an Equipment Replacement Fund and Matrix. The purpose of this fund is to identify and budget for equipment and vehicles in need of replacement, or for additional equipment necessary due to growth. All equipment identified for purchase is subject to Council approval. The Matrix identifies $165,000 in 2007 to replace the 1995 Case loader which is 12 years old and has accumulated over 4,600 operating hours and has a cracked engine block. To encourage competition and to assure the wheel loader meets City needs staff prepared supplemental speCifications to the State Contract for wheel loaders. Bid notices were placed in both the Prior lake American and Construction Bulletin. Special provisions in the speCifications included inclusion of tree spade adapter equipment and a 5 year/5,000 hour repurchase price guarantee. As an additional effort to assure competitive prices, the staff also evaluated non-state contract prices for wheel loaders and determined that the current state contract offered the most competitive bids. Bids were received and opened on January 5, 2007. Three bids were received www.cityofpriorlake.com R:\AgendaReports\2007\Ol162007\frontend~~7.9800 / Fax 952.447.4245 for the wheel loader. The bid results are shown in the following table: Company/Model St. Joseph ROO Equipment Ziegler Equipment John Deere 624J CAT 938GII Case 721E Bid $152,236.00 $155,451.00 $170,398.00 Trade In Allowance $37,000.00 $35,000.00 $30,000.00 Purchase Price $115,236.00 $120,451.00 $140,398.00 Tax $7,490.34 $7,829.32 $9,125.87 Total Cost $122.726.34 $128.280.32 $149.523.87 5 year/5,000 hour $67,000.00 Did Not Provide $85,000.00 Repurchase Guaranteed 5 vear Cost $55.726.34 NA $64.523.87 5 vr - Annual Cost $11,145.27 NA $12,904.77 Warranty 1 year unlimited 6 month parts and 1 year or 1,500 hours hours/2 year - 2,000 labor $200.00 deductible hours engine per occurrence after I-year Downtime replacement loader during warranty Safety and Tree $8,500.00 $8,500.00 $8,500.00 Snade Eauinment Total Loader Cost $131.226.34 $136.780.32 $158 023.87 Based on the bids received the Case loader has the lowest initial cost and the lowest 5 year annual cost. John Deere did not and will not offer a buyback guarantee. Staff feels this is a very important option as it indicates the Company's confidence in the quality of their equipment while providing the City insurance on our investment. Staff anticipates 5,000 hours or 8 to 10 years of useful life from the loaders. Based on historical trade in values it is anticipated the CAT would have a higher trade-in value than the Case at 8 years, however the Case would still most likely have a lower annual cost if no major maintenance issues are encountered. ISSUES: City staff is also requesting authorization for purchase of standardized safety equipment (radio/communications, safety flashers, fire extinguisher, first aid kit etc.) and the adapter equipment for the City's existing tree spade. The required tree spade adaptor and installation costs are $6,000.00 and the safety equipment cost is $2,500.00. Since 1991 the City has owned three loaders. 1991 and 1995 Case loaders and a 2001 CAT loader. Due to mechanical and safety concerns with the 1991 Case loader and estimated life expectancy and annual cost, the City purchased a CAT loader in 2001. The City's 1995 Case loader lasted 10+ years (4,600 hours) prior to major engine issues. The 1995 Case loader hours were limited over the last couple years due to engine issues. This loader did also experience transmission problems during its operating life. Based on the current workload, City staff anticipates an 8-10 year (5,000 hour) useful life for our loaders. Even with the mechanical issues the City's 1995 Case loader did R:\Agenda Reports\2007\Ol 16 2007\front end loader agendaDOC meet staff useful life recommendations. We believe the City is protected by the guaranteed buy-back provision included in this bid. Based on the City's experience with CAT and Case loaders staff does feel the CAT has performed better with less maintenance costs. As part of the pre- purchase equipment reviews staff tested all three models that bids were received on. Staff believes any of the three models would perform adequately for the City. FINANCIAL IMPACT: The City Capital Improvement Program Equipment Replacement Matrix budgeted $165,000.00 for replacement of the 1995 Case Wheel loader in 2007. All three bids are below the budgeted amount. The total purchase price of $131,226.34 is well below this allocation. The revolving equipment fund is supported by an annual contribution from the utility funds, tax levy and interest earnings. ALTERNATIVES: 1. Approve a resolution authorizing purchase of a Case 721 E Wheel loader for $122,726.34 from St. Joseph Equipment and $8,500 for tree spade adaptor and safety equipment. 2. Table this agenda item for a specific reason. 3. Deny this agenda item for a specific reason and provide staff with direction. RECOMMENDED MOTION: Alternative #1 Steve Albrecht, Director of Public Works R:\Agenda Reports\2007\Ol16 2007\front end loader agenda DOC 4646 Dakota Street S.E. Prior Lake, MN 55372-1714 RESOLUTION 07 -xx A RESOLUTION TO APPROVE THE PURCHASE OF ONE (1) CASE 721 E WHEEL LOADER THROUGH THE STATE COOPERATIVE PURCHASING PROGRAM FROM ST. JOSEPH EQUIPMENT OF SHAKOPEE, MINNESOTA Motion By: Second By: WHEREAS, The State Cooperative Purchasing Program and the City's Supplemental Specifications provide a base line for wheel loader purchases; and WHEREAS, St. Joseph Equipment's model 721 E meets or exceeds the specifications; and WHEREAS, The costs and repurchase price provide the best investment alternatives for the residents of Prior lake provided in the chart below: Company/Model St. Joseph ROO Equipment Ziegler Equipment John Deere 624J CAT 938GII Case 721E Bid $152,236.00 $155,451.00 $170,398.00 Trade In Allowance $37,000.00 $35,000.00 $30,000.00 Purchase Price $115,236.00 $120,451.00 $140,398.00 Tax $7,490.34 $7,829.32 $9,125.87 Total Cost $122.726.34 $128280.32 $149.523.87 5 year/5,000 hour $67,000.00 Will Not Provide $85,000.00 Repurchase Guaranteed 5 year Cost $55 726.34 NA $64 523.87 5 yr - Annual Cost $11,145.27 NA $12,904.77 Warranty 1 year unlimited 6 month parts and 1 year or 1,500 hours hours/2 year - 2,000 labor $200.00 deductible hours engine per occurrence after I-year Downtime replacement loader during warranty Safety and Tree $8,500.00 $8,500.00 $8,500.00 Spade Eauinment Total Loader Cost $131.226.34 $136.780.32 $158 023.87 R:\Agenda Reports\2007\01 16 2007\front end loader reso.doc www.cityofpriorlake.com Phone 952.447.9800 / Fax 952.447.4245 NOW THEREFORE, BE IT HEREBY RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, MINNESOTA as follows: 1. The recitals set forth above are incorporated herein. 2. The City Council authorizes the expenditure of $131,226.34 for the purchase of one 721 E Wheel loader from St. Joseph Equipment of Shakopee, Minnesota and safety tree and spade equipment to be installed by Fleet Maintenance staff. 3. Funds for these purchases shall be drawn from the Equipment Revolving Fund. PASSED AND ADOPTED THIS 16TH DAY OF JANUARY, 2007. Hauaen Hauaen Erickson Erickson Hedbera Hedbera LeMair LeMalr Millar Millar YES NO Frank Boyles, City Manager R:\Agenda Reports\2007\01 16 2007\front end loader reso.doc