TITLE
Consider a memorandum/resolution authorizing the lease with purchase option of a wheel loader and compact excavator for the Drainage Maintenance division.
SUMMARY
DATE: April 4, 2017
TO: Ronald L. Olson, City Manager
VIA: Jonathan Locke, Executive Director of Finance
FROM: Frank Tydlacka, Director of Fleet Services
SUBJECT: Authorize lease with purchase option of a wheel loader and compact excavator for the Drainage Maintenance division
BACKGROUND AND FINDINGS:
Beginning in FY13, the Drainage Maintenance division was authorized to lease a track loader to be used in routine operations, minor construction projects and upkeep of the approximate 457 acres of drainage channels throughout the city. The monthly payment for that unit was $3,407.62. With the mission ever changing, it was found necessary to return that unit when the lease expired in June 2016 and replace it with a down-sized machine that would be more capable in confined areas. Therefore, the same funds where again appropriated in the FY17 Drainage Maintenance division's budget to lease the down-sized equipment. The monthly lease payment for the down-sized machines would be $158.87 greater than the previous lease. However, this lease will negate the need to rent the compact equipment or borrow oversized equipment from other divisions. This results in an average monthly net savings of $549.46, an increase in efficiency for the Drainage Maintenance division, and a reduced negative impact to the mission of other divisions.
THE ALTERNATIVES CONSIDERED:
Borrowing a loader and excavator from another division will not work well because the existing equipment is too large, they would be continually transported back and forth between job sites and loading sites and the overall process would cause major inefficiencies for both divisions.
Renting is not practical because there must be a loader available most all of the time. Rental cost for the loader alone would average $5,200/mo.
Leasing ...
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