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HomeMy WebLinkAbout5.D.1. Purchase of Loader S. D. I, CITY OF SHAKOPEE Memorandum CO~'W~~~~T TO: Mayor and City Council ~ ''''~~tiN ' Mark McNeill, City Administrator FROM: Michael Hullander, Public Works Superintendent SUBJECT: Purchase of Loader DATE: February 17,2009 INTRODUCTION: Public Works has identified a need in the 2009 Capital Equipment Budget to replace the 1990 Case 621 Loader through the Minnesota Cooperative Purchasing Venture. BACKGROUND: The Public Works Department has requested to purchase a new loader with a cost estimate of $160,000.00 in the 2009 Capital Equipment Budget. Staff currently utilizes three loaders year round for Street, Park, Sanitary and Storm Sewer maintenance. These loaders include a 1990 and 1992 Case 621 and 2002 Case 621D. The duties include: snow plowing, de-icing material mixing and loading, large street and alley repairs, sanitary and storm sewer repairs, snow removal from the downtown and other locations, park landscaping and repairs, material handling and loading. . When staff purchased the 2002 Case 621D Loader it was decided it would be beneficial to retain the 1990 Case 621 for use as a yard loader. This decision was based on the loss of productivity and costs associated with traveling from work sites to load and unload materials from the yard. This is highly excessive in snow plowing operations. The 1992 Case 621 and 2002 Case 621D Loaders have both front and wing plow set-ups and are assigned plow routes with a large number of cul-de-sacs. This has been efficient in snow plowing operations, but the benefits are 10st when a 10ader is continually pulled off the route to load trucks that need de-icing materials. The 1990 Case 621 Loader also has a Front and wing plow set-up and can be used when one of the other 10aders is down for repairs. The 1990 Case 621 Loader is used primarily as a yard loader for material and equipment handling, 10ading of de-icing matrials, road aggregate, red ball diamond aggregate, top soil, wood mulch/chips, landscape blocklbrick, sanitary and storm sewer pipe, pre-cast manholes, manhole block, frames and covers, and catch basins. This loader is also used to load snow from parking lots while the other two loaders are removing snow from the downtown area. The Yard Loader was used extensively in the storm of 1998 and the floods of 1993, 1997 and 200l. Scott County also uses this loader when available through the SCALE equipment sharing agreement. The 1990 Case 621 Loader meets the requirements for replacement. Staff believes due to the loss of power and wear that it should be replaced and the 1992 Case 621 loader, which we invested a considerable amount of dollars two years ago, should become the yard loader and a new loader be purchased for main-line plowing and other duties. Staff has researched the possibility of renting a third loader but the costs are higher than purchasing a new loader from State Contract Bids. The monthly rate on a new loader from the Internal Service Equipment Fund would be approximately $1,000.00. The rental rates from St. Joseph Equipment, Inc. for a 621 series loader is $1,850.00 per month with an additional $29.50 for every hour over 200 hours. If we were to retain our existing loader Public Works would be charged our current rate of $432.00 per month from the Internal Service Equipment Fund for the 1992 Case 621. Public Works is requesting to purchase a new loader and trade in the 1990 Case 621 and utilize the 1992 Case 621 as the yard loader. Staffs request is to have three 10aders in rotation in its fleet. If the City chooses not to have three loaders in rotation, then staff, in order to retain plowing efficiency, would have to request to purchase one additional plow truck for mainline plowing. Staffwould also have to consider an additional pick-up truck with plow to handle the numerous cul-de-sacs. The cost of both of these acquisitions is estimated to be around $170,000.00. Because plow trucks can only be used for hauling purposes, when not in snow removal operations, staff feels it is more cost effective to have three loaders with multiple uses in its fleet. STATE CONTRACT: The State CPV is a multiple award process that allows local agencies to choose which vendor and machine it wants based on its specific needs. For example: Prior Lake has chosen to purchase a Case 721D, and also has a Cat 938G, both are larger series loaders than we recommend. Savage also utilizes Cat 938G loaders. The State CPV requires vendors to have a 5-year re-purchase guarantee in their bids. This allows agencies to purchase a machine and keep it for 5 years, then sell it back to the vendor at a guaranteed price. (The vendors have to buy a bond to guarantee this re- purchase provision, the cost of which is passed on to the purchaser.) Agencies can benefit from this provision by using the equipment for the best 5-year period in the life of the machine where there should be no major maintenance costs. The drawback is the agency would then have to purchase another machine to replace the re-purchased one, staff believes it is more cost effective to retain the loader for 18 to 20 years, and in our situation continue to use the loader in the yard until the next loader comes up for replacement. . Staff believes the 1992 Case 621 should be replaced around 2014 which will make it 22 years old. Staff also recommends purchasing a 5-year full machine warranty. Maintenance staff has investigated and tested the two loaders (Case 621D and the Cat 928H). Both of these loaders will meet the City's minimum requirements. Strictly from an initial purchase price viewpoint, the Case 621D is the loader of choice. The Cat 928H has a higher trade-in value and also has other specifications which are appealing, but none of which makes up for the $10,377.36 higher price. Although staff has a difference of opinion on which loader is the better machine, many of the differences do not add a hard financial value to the Cat Loader. The two State Bid Prices are as follows: ZIEGLER. INC. ST. JOSEPH EOUIPMENT. INC. CAT 928H CASE 621D Base w Plow/wing $124,860.00 Base w Plow/wing $115,047.00 Warranty $3,220.00 Warranty $4,789.00 Less trade ($27.000.00) Less trade ($28.500.00) TOTAL $101,080.00 TOTAL $91,336.00 SALES TAX $6.570.20 SALES TAX $5.936.84 TOTAL $107,650.20 TOTAL $97,272.84 Any of these loaders will be delivered within 90 days of order. These State Bid prices are good until February 28.2009. ALTERNATIVES: 1. Purchase the Case 621D Loader for the purchase price of $97,272.84 from St. Joseph Equipment, Inc. 2. Purchase the Cat 928H Loader for the purchase price of $107,650.20 from Ziegler, Inc. 3. Deny the purchase request at this time. 4. Table for additional information. RECOMMENDATION: Staff recommends Alternative No.1, Purchase the Case 621D Loader for the purchase price of $97,272.84 from St. Joseph Equipment, Inc. ACTION REOUESTED: Authorize the purchase utilizing State Bid Pricing for one new Case 621D Loader from St. Joseph Equipment, Inc. for the purchase price of $97,272.84, to be expended from the Capital Equipment Fund. ~~1~ Public W lks Superintendent