TITLE
Consider a memorandum/resolution authorizing the procurement of a Motor Grader for the Street Operations Division.
SUMMARY
DATE: June 5, 2018
TO: Ronald L. Olson, City Manager
FROM: Jonathan Locke, Executive Director of Finance
SUBJECT: Procurement of a Motor Grader for the Street Operations Division
BACKGROUND AND FINDINGS:
Since 2002, the City of Killeen has procured a motor grader and subsequent replacements with a three-year guaranteed buyback/repurchase price. The guaranteed buyback funds have then been applied towards the purchase of the replacement motor grader at the end of the three-year term. This heavy equipment is used by the Street Operations Division for many street, utility and maintenance programs.
THE ALTERNATIVES CONSIDERED:
1.) Renting is not practical because there must be a motor grader available most all of the time for periodic use. Rental cost for the motor grader would average $6,900/month plus delivery and pickup.
2.) Leasing of a comparable motor grader would cost $2,815.63 per month.
3.) Purchase the motor grader for $267,624.57 with the three-year guaranteed buyback/repurchase price of $209,700.00, resulting in a net cost of $57,924.57 or $1,609.02/month.
Which alternative is recommended? Why?
Staff recommends Option 3, because it offers the best value.
CONFORMITY TO CITY POLICY:
The City of Killeen is a member of several purchasing cooperatives that are in compliance with Texas Local Government Code section 271.102. Purchases made through a cooperative satisfy competitive bid requirements. Quotes were solicited from four cooperative participating vendors resulting in two complete quotes, one partial and one no-quote. RDO Equipment Co. supplied the quote representing the best value for the City considering price & serviceability.
FINANCIAL IMPACT:
Cooperative quotes received:
|
Vender |
Model |
Co-op |
Cost |
Buyback |
Net Cost |
|
RDO Equip. |
John Deere 770GP |
BuyBoard |
$267,624.57 |
$209,700.00 |
$57,924.57 |
|
Holt CAT |
Caterpillar 140M3 |
NJPA |
$263,500.00 |
$195,000.00 |
$68,500.00 |
|
WPI |
Komatsu GD655-6 |
BuyBoard |
$341,650.00 |
NA |
NA |
What is the amount of the expenditure in the current fiscal year? For future years?
Purchase price of $267,624.57 minus $250,000.00 received from buyback of previous motor grader = $17,624.57 expenditure this fiscal year. There are no future costs for this equipment.
Is this a one-time or recurring expenditure?
This is a one-time expenditure.
Is this expenditure budgeted? If not, where will the money come from?
Funds will be available in account number 601-3445-434.61-35 following the mid-year budget amendment.
Is there a sufficient amount in the budgeted line-item for this expenditure?
Funds will be available in account number 601-3445-434.61-35 following the mid-year budget amendment. .
RECOMMENDATION:
Staff recommends that City Council approve the purchase of the motor grader from RDO Equipment Company utilizing the Texas Association of School Boards (TASB) BuyBoard Purchasing Cooperative for $267,624.57, and that the City Manager or designee be expressly authorized to execute any and all change orders within the amounts set by state and local law.
DEPARTMENTAL CLEARANCES:
Public Works
Purchasing
Finance
Legal
ATTACHED SUPPORTING DOCUMENTS:
Quotes
Certificate of Interested Parties and H.B. 89 Addendum