Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A PURCHASE AGREEMENT WITH SOUTHEASTERN EQUIPMENT COMPANY, INC. FOR A CASE WHEEL LOADER AND TO ENTER INTO A LEASE-PURCHASE AGREEMENT WITH KS STATEBANK TO FINANCE SAID PURCHASE.
Brief Description: This resolution provides for the replacement of an existing wheel loader for use in the Public Works Department.
Body
Legislative History
Resolution 19-185, approved 12/17/19, authorizes staff to seek competitive pricing on goods and services including equipment.
Purpose & Explanation
One bid was received in January for the replacement of an existing wheel loader within the PW area of operation. A wheel loader is a large vehicle with a bucket attachment on the front which is used to load salt and perform other bulk materials loading functions within the right of way including earth moving. This machine is twelve years old and has reached the end of its useful life. Accessories for this unit are not required. Below is the Service Department budget estimate per the 2020 budget along with the respective bid for the annual lease payments.
Service Budget Estimate: $41,325.00 annually
Southeastern Equipment Company, Inc. - $176,919.52
KS StateBank Lease-to-Own Annual payments - $37,654.55.
The City Administration is requesting City Council approval to authorize the City Manager to enter into a purchase agreement with Southeastern Equipment Company, Inc. and a lease to own agreement with KS StateBank for the replacement of a wheel loader. The total purchase price for the equipment will be $176,919.52. Lease payments will not exceed $37,654.55 annually. Staff did explore several financing options and found KS StateBank to offer the lowest financing rate of 3.12%. The wheel loader will be purchased through Ohio State Term Schedule Pricing STS 515-800585. The lease term will be for five (5) years. Staff wishes to include a contingency of $1,000.00 per year to account for any changes in interest rates between the time this staff report is submitted and the contract is formally executed.
UPDATE for Council Meeting of May 5, 2020:
• The participating vendor has one loader unit in stock.
• The vendor is willing to hold it for Hudson if we commit to purchasing it in July 2020.
• The one in stock has the new standard radial tires, which increases the price by $2,981.16.
• If we were to wait to order a new unit in July, there is no guarantee of delivery before the snow season. There is currently a 3-4 month lead time, and the dealer is expecting that to increase by an additional 3-4 months, once parts and assembly manufacturing resumes.
Legal Authority for Proposed Legislation
Pursuant to Charter Section 6.04:
Competitively bid and advertised for two consecutive weeks; bid tab attached: [Yes/No/NA])
X Joint or Cooperative Purchase Program Ohio STS 515-800585
Professional Services
Other [provide explanation]
Fiscal Impact
X Currently Budgeted 201-6241-52520, $41,325.00
Supplemental Appropriation Required
Appropriation Not Required.
Does this legislation require use of an emergency clause?
Yes
X No
Recommendation
Suggested Action
Staff recommends that City Council approve this Resolution authorizing the City Manager to award and enter into a contract with Southeastern Equipment Company, Inc. for the purchase of one (1) wheel loader at the Ohio STS price of $176,919.52 and for the execution of a five (5) year lease to own contract with KS StateBank at an annual payment not to exceed $38,654.55.
Submitted
Jane Howington, City Manager
Frank J. Comeriato, Jr., Assistant City Manager-Operations
Eric Hutchinson, Assistant Public Works Director-Services