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Home My WebLink About4D - Purchase of one 1999 Wood Chipper MEETING DATE: AGENDA # PREPARED BY: AGENDA ITEM: DISCUSSION: CITY COUNCIL AGENDA REPORT MARCH 1, 1999 4D AL FRIEDGES, PARKS SUPERVISOR CONSIDER APPROVAL OF RESOLUTION AUTHORIZING THE PURCHASE OF ONE, 1999 CHIPPER THROUGH THE STATE OF MINNESOTA CO-OPERATIVE PURCHASING AGREEMENT 99-XX WOOD Historv: The purpose of this agenda item is to consider authorizing the purchase of one, 1999 wood chipper. This piece of equipment would be purchased through the State of Minnesota Cooperative Purchasing Agreement. There is $18,150.00 identified in the Equipment Matrix for acquisition ofthis piece of equipment in 1999. Current Circumstances: This piece of equipment is used primarily to chip brush and wood. Chipping the brush and wood reduces the amount of logs and brush that are hauled away during tree removal and trimming operations. The wood chips that we generate are recycled and used for mulch around trees and planting beds. The chipper is used year-round by both Parks Maintenance and Public Works in conjunction with our boulevard and park tree pruning and trimming program. The chipper is particularly essential during annual storm clean-up. We currently have a 1989 model Olathe chipper. This chipper is not capable of chipping material larger than 4" in diameter. Because this is a small capacity chipper, large volumes of wood and brush need to be loaded on trucks to be hauled to burn sites or landfills where we pay for disposal. Olathe has discontinued production of this chipper which causes difficulty in obtaining replacement parts and service. Issues: The chipper we propose to acquire will process logs up to 12 inches in diameter. In the past we have borrowed large volume chippers from other communities. The heavy demand for the use of the chippers within their own municipalities has precluded this practice. It is very 16200 Eagle Creek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER difficult to borrow or find rental equipment following storms, when people expect the city to provide clean-up services as quickly as possible. We estimated the purchase price of this equipment to be about $18,000.00, however, the E.P.A. now requires that the engine on this piece of equipment be emissions certified. This E.P.A. requirement became regulation after our equipment budget process was completed. The new regulations resulted in a $3,000.00 increase for this piece of equipment. Conclusion: There is $18,150.00 identified for the purchase of this piece of equipment in the Equipment Matrix which is part of the Capital Improvement Program. The funding source is identified as the Revolving Equipment Fund. We propose to trade the 1989 Olathe chipper for $1000.00. The cost of the new chipper including trade is $21,364.00. The $3,214.00 difference between the amount budgeted and actual cost will be drawn from the revolving fund for equipment replacement. Each year we review the position of the revolving fund and modify acquisition plans accordingly. COST RECOVERY SUMMARY: The cost recovery summary is as follows: Existinl! Equipment New Equipment 1. Equipment Description 1989 Olathe Vermeer 1250 A 2. Equipment Condition Fair New 3. Equipment Hrs./Miles N/A 0 4. Primary Use Chipping Brush Chipping Brush/Logs 5. Useful Life/Remaining o Years 10 Years 6. Equipment Age 11 Years o Years 7. Acquisition Date 1989 1999 8. Acquisition Cost $8,850.00 $21,364.00 9. Matrix Budget Amount -- $18,150.00 10. Depreciation $7,850.00 -- II. Present Trade-in Value $1,000.00 -- 12. Projected Equipment Retention 10 Years Schedule COST BENEFIT ANALYSIS: In the past during tree removal operations, most of the logs and branches have had to be hauled to: 1. Bum sites 2. Landfills 3. Off site locations where the chipping is contracted This resulted in costly equipment and disposal fees. ALTERNATIVES: RECOMMENDED MOTION: REVIEWED BY: The chipper that is proposed for purchase would be capable of chipping materials up to twelve inches in diameter. The chips that we generate would then be utilized throughout the parks system. . The alternatives are as follows: 1. Approve Resolution 99-XX authorizing the purchase of one, 1999 Vermeer 1250 A wood chipper through the State of Minnesota Cooperative Purchasing Agreement in the amount of$21,363.90. 2. Table this agenda item for a specific reason. 3. Deny this agenda item for a specific reason. Motion and second to approve Resolution 99-XX authorizing the purchase of one, 1999 Vermeer 1250 A wood chipper through the State of Minnesota Cooperative Purchasing Agreement in the amount of $21,363.90. ~~ Paul Hokeness Parks & Recreatio irector RESOLUTION 99-xx RESOLUTION APPROVING THE PURCHASE OF ONE (1), 1999 VERMEER 1250A BRUSH CHIPPER MOTION BY: SECOND BY: WHEREAS, the Equipment Replacement Fund & Matrix identifies the purchase of one brush chipper in 1999; and, WHEREAS, the chipper being replaced is a 1989 Olathe; and, WHEREAS, the chipper being purchased will be a 1999 Venneer 1250A through the State of Minnesota Cooperative Purchase Agreement with negotiated pricing as follows: MAKE/MODEL VERMEER 1250A Unit Price Less Trade-In Unit Cost Tax TOTAL COST $21,060.00 $ 1,000.00 $20,060.00 $ 1,303.90 $21,363.90 NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PRIOR LAKE, that the trade of the 1989 Olathe chipper and the purchase of the one, 1999 Venneer 1250A chipper be approved. AND FURTHER, that $21,363.90 be drawn from the Equipment Replacement Fund for the purchase of this equipment. Passed and adopted this 1 st day of March, 1999. YES NO Mader Mader Kedrowski Kedrowski Schenck Schenck Petersen Petersen Wuellner Wuellner { 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 MEMO TO: FROM: RE: DATE: MAYOR AND COUNCILMEMBERS BRET WOODSON, ASSIST ANT CITY MANAGER BACKGROUND OF REVOLVING EQUIPMENT FUND AND MATRIX JANUARY 28, 1999 IT May of 1997, the City Council passed Resolution 97-41 authorizing the establishment of a R ;volving Equipment fund. This fund would be used to replace existing equipment and planned new equipment additions exceeding $5,000 over the next 12 years. These items are contained in the Equipment Matrix and are identified by year and projected amount. The following information was included in the staff report for the City Council Meeting in May of 1997. The information outlined a number of advantages for moving to a revolving equipment fund which in turn would result in property tax savings. These are indicated as follows: Advantages: . Establishment of regular replacement schudule . Equipment maintenance service costs are reduced . Increased operational efficiencies as a result of newer technological improvements . Equipment reliability is increased which decreases downtime . Operational safety is increased . Elimination of interest dollars spent on equipment certificate financing . Trade-in values are realized which reduces net purchase costs . Positive community image Tax Payer Savings: . Interest dollars savings in excess of$100,000.00 (based on today's interest rates) . Annual budget decrease will reduce yearly tax levy by approximately $20,000.00 as such equipment expenditures will be funded by the Revolving Equipment Fund . Reduced maintenance expenditure categories within the operating budget thus reducing the impact upon property taxes. . Liability exposure is reduced by operational equipment that is in good shape. Less likelihood of an incident occuring that could result in a property tax levy to pay for court ordered punitive damages. Also attached to this memo is a listing of the vehicles / equipment scheduled to be replaced in 1999 and a complete listing of our current vehicle list. City staffwill be able to follow-up with specific city council questions during the inspection on Monday evening. 162Q(jilE:a~h&lUmek Ave. S.E., Prior Lake, Minnesota 55372-1714 / Ph. (612) 447-4230 / Fax (612) 447-4245 AN EQUAL OPPORTUNITY EMPLOYER 1999 VEHICLES/EQUIPMENT SCHEDULED TO BE REPLACED AMOUNT IN EST. COST EXPECTED DEPT. WHAT YEAR MATRIX FOR NEW TRADE-IN REPLACEMENT RATIONALE FIRE DEPT. FORD TANKER 1978 $80,000 $95,000 + tax $5,000 21 years old. No Air brakes. Tank frame needs replacement. Auto-transmission. PARKS DEPT. 72" MOWER 1988 $20,680 $19,832 + tax $2,750 11 years old w/high hours - 4,430 hrs 72" MOWER 1988 $20,680 $21,334 + tax $3,150 11 years old w/high hours - 3,540 hrs 4X4 3/4 TON WIPLOW 1988 $31,350 $27,579 + tax $1,000 High mileage - 100,400 mi. Unsafe frame - 2 Dump' & p~ would be to costly to repair. $17,550 + tax 4X4 1 TON DUMP WfPLOW 1988 $27 ,579 + tax $500 High mileage - 105,000 mi. Unsafe frame - $41,360 would be to costly to repair. JACOBSON SLIT SEEDER 1989 $7,150 $7,150 + tax $250 No longer meets needs of dept. Reliable seeder is needed for upcoming projects. > WOOD CHIPPER 1989 $18,150 $21,700 + tax No Offer Yet Not large enough. No curb side chute. < Needs repair. 10 year old. 1/2 TON PICK-UP 1996 $22,000 $12,818 + tax No Trade Lease agreement terminates. 13,500 miles PUBLIC WORKS INTL. DUMP WITH PLOW 1988 $94,600 $90,000 + tax $18,000 11 years old. Estimated $40,000 just to replace box/plow. BOBCAT 1991 $19,800 $21,000 + tax $7,000** 8 years old. No high flow hydraulics for needed attachments. Not reliable. POLICE 2 - SQUAD CARS 1997 nJa $20,850 each n/a One of the 1997's has over 100,000 miles (the 1997 squads will be used and the other has had many maintenance by other city departments & problems and can no longer effectively the two 1992 caprices will be operate as police vehicle. sold.) ** This is the revised amount as of 2/23/99. The trade-in value was originally listed as $10,000. N:\BRET\VECmCL.DOC