HomeMy WebLinkAbout5.B.6. Declare 1989 Cat Road Grader Surplus Property and Authorize the Sale by iegler to Sell on Consignment ~ • V .
CITY OF SHAKOPEE
MEMORANDUM ~
TO: Mayor & City Council
Mark McNeill, City Administrator
Bruce Loney, Public Works Director
FROM: Michael Hullander, Public Works Superintendent
DATE: March 18, 2008
SUBJECT: Declare 1989 Cat Road Grader Surplus Property and Authorize the Sale
by Ziegler to Sell on Consignment.
INTRODUCTION:
Public Works is requesting Council to declare the 1989 Cat Road Grader as surplus
equipment and authorize staff to enter into a sales contract with Ziegler Sales to sell the
Road Grader on consignment. Ziegler will offer the sale of the machine for $82,000.00.
BACKGROUND:
Public Works purchased the Cat Road Grader in 1989 for $128,521.00 for the purpose of
grading the miles of gravel roadways. Since 1989 all the gravel roadways have been
paved except for small portions of Valley View Road, Pike Lake Trail, Muhlenhardt
Road and Naumkaeg Street. Public Works staff has used asphalt millings from recent
overlay projects to pave these small sections with only a small portion left on Pike Lake
Trail which will be completed this year. The other major roadway, 160' street, is
maintained by Spring Lake Township under a joint maintenance agreement between the
City and Township.
Due to the lack of use of this grader staff believes it is time to sell the grader and if
needed a road grader could be rented at a lower cost. We are requesting Council to
declare this machine as surplus property and authorize staff to enter into a sales
agreement with Ziegler to sell the grader on consignment. Attached to this memo is a fax
from Ziegler outlining what .their sales staff believes they can sell the grader for,
$82,000.00. Staff also believes the City will get a higher sales price going this route than
selling the grader on auction. If Council concurs we would like authorization to enter
into a sales contract with Ziegler to reduce the size of our fleet.
ALTERNATIVES:
1. Declare the Road Grader as surplus property and Authorize staff to enter into a
sales contract with Ziegler to sell on consignment
2. Deny the request and direct staff to come back to council with another alternative.
3. Move to table for additional information.
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RECOMMENDATION:
Staff recommends alternative number one.
ACTION REQUESTED:
Move to declare the 1989 Cat Road Grader as surplus property and authorize staff to
enter into a sales contract with Ziegler to sell on consignment.
Michael Hullander
Public Works Superintendent
02/22/2008 10:58 Fc~ 952$875820 ZIE6LER SALES 1~001l08~
,
sot west 94th street FAQ GC~VER PAGE
Arlinneapolis, Mlv 55424-4299
952/888-4121 2008
$40!352-2812 Date: _Fehruary 22,
Time: 10:56 AM
To: Gene Jeurissen Fax: 952-233-3$21
Company: Shakopee Public works
Subject: 140G Corsi ent
From: Tom Rassez Phone: (952) 887-5893
Pages Sent (~cluding this page): 2 Fax: (952} 887-5822
Comments:
Gene,
As we discussed, Ziegler will offer your machine for sale on consignment, as-is, for $82,044.04. It would
be listed to our sales force in Minnesota and Iowa at that price. Our salesmen have the option of
discounting used equipment by up to 5% of the advertised. price. If your machine were sold with the
maximum discount, the City would net, after Ziegler's 14°lo consignment fee, $74,114.44. If the machine
sells for $$2,404.40, the Gity would net $73,$Of1:44.
Qur used equipment department, based on the current marketplace, recommends these numbers. They feel
confident that the machine as-is, will sell reasonably quickly at that price. If desired, we could put a lrigber
price on the machine to net the City mare, but please be aware that it may have to come down if there are no
takers.
I've also included a blank copy of our consignment agreement for your review incase you do decide to
consign with us.
Please feel free to call me with questions.
Thanks,
~T~ ~~~~V~~~