Title
Consider a memorandum/resolution approving a sixty (60) month lease with Pitney Bowes for the Utility Collections Division, in the amount of $111,012.
Body
DATE: October 22, 2024
TO: Kent Cagle, City Manager
FROM: Judith Tangalin, Executive Director of Finance
SUBJECT: Pitney Bowes Lease for Utility Collections
BACKGROUND AND FINDINGS:
The Utility Collections Division under the Finance Department prepares the utility billing for the City of Killeen. There are thirteen billing cycles per month producing approximately 50,000 bills per month. The existing leased machine from Pitney Bowes is being discontinued due to not being in compliance with a new technology standard called Intelligent Mail Indicia (IMI) that the United States Postal Service has adopted. The equipment is necessary for folding, sorting, inserting, postmarking and opening all the utility bills processed through the Utility Collections Office.
Utility Collections’ current lease expires December 2024, however, will terminate the next billing cycle after the new lease is signed and the equipment is delivered and installed. The new lease will be sixty (60) months at $1,850.20 monthly rate and billed quarterly.
Leasing this equipment is more beneficial then outright purchasing the equipment due to the nature of use, updates in technology and service needed on the machine annually. Staff will have access to modern, up-to-date equipment that is covered under warranty for the duration of the lease. If repairs are needed, parts will be delivered, and a technician will repair the equipment on-site. In addition, the lease option allows the financial burden to be distributed over a sixty (60) month period.
THE ALTERNATIVES CONSIDERED:
N/A
Which alternative is recommended? Why?
N/A
CONFORMITY TO CITY POLICY:
Pitney Bowes, the vendor, is a member of the Texas Buy Board Purchasing Cooperative (contract #656-21). Purchases made through a cooperative contract satisfy the state competitive bidding requirements as stated in Texas Local Government Code (TLGC) section 271.102, subchapter F; a local government that purchases goods or services under this subchapter satisfies any state law requiring the local government to seek competitive bids for the purchase of the goods or services.
FINANCIAL IMPACT:
What is the amount of the revenue/expenditure in the current fiscal year? For future years?
The fiscal impact for current and future years is shown below.
|
Fiscal Year |
Payment Due |
|
FY 2025 |
$22,202.40 |
|
FY 2026 |
$22,202.40 |
|
FY 2027 |
$22,202.40 |
|
FY 2028 |
$22,202.40 |
|
FY 2029 |
$22,202.40 |
|
Total Contract |
$111,012.00 |
Is this a one-time or recurring revenue/expenditure?
Recurring. This is a sixty (60) month/five (5) year agreement.
Is this revenue/expenditure budgeted?
Yes, this expenditure is budgeted in the Water & Sewer Fund Lease Principal (550-57130-800-160-000000) and Lease Interest (550-57131-800-160-00000) accounts.
If not, where will the money come from?
N/A
Is there a sufficient amount in the budgeted line-item for this revenue/expenditure?
Yes
RECOMMENDATION:
City Council approve a sixty (60) month lease with Pitney Bowes for the Utility Collections division in the amount of $111,012 and that the City manager and or designee be authorized to execute any and all change orders as permitted by state and local law.
DEPARTMENTAL CLEARANCES:
Legal
Finance
ATTACHED SUPPORTING DOCUMENTS:
Agreement
Contract Verification Form
Certificate of Interested Parties
Buyboard Summary
Presentation