Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO ENTER INTO A LEASE-PURCHASE AGREEMENT WITH JOHN DEERE CONSTRUCTION & FORESTRY COMPANY TO FINANCE THE PURCHASE OF A BACKHOE FOR USE BY THE DEPARTMENT OF PUBLIC WORKS; TO AUTHORIZE THE PURCHASE OF THE BACKHOE FROM MURPHY TRACTOR AND EQUIPMENT; AND DECLARING AN EMERGENCY.
Brief Description: This resolution provides for the purchase and financing of a replacement backhoe for use in the Public Works Department.
Body
Legislative History
Resolution 18-188, approved 12/18/18, authorizes staff to seek competitive pricing on goods and services.
Purpose & Explanation
Bids were received on March 20, 2019 for the replacement an existing 1999 John Deere backhoe within the PW area of operation. This machine has reached the end of its useful life. The purchase will include the front bucket, rear bucket and pavement breaker. Below is the Service Department bedget estimate per the 2019 budget along with the respective bid for the annual lease payments.
Service Budget Estimate: $26,050.00 annually
Murphy Tractor & Equipment $108,688.99/ Lease-to-Own Annual payments of $20,204.17
The City Administration is requesting City Council approval to authorize the City Manager to enter into a purchase agreement with Murphy Tractor and Equipment and a lease to own agreement with John Deere Construction & Forestry Company for the replacement backhoe. The total purchase price for the piece of equipment and attachments will be $108,668.99. lease payments will be $20,204.17 annually. Staff did explore several financing options and found John Deere Construction & Forestry Company to offer the lowest financing rate of 4.5%. The backhoe will be purchased through Ohio State Term Schedule Pricing STS 515-800528. The lease term will be for five (5) years.
Total Contract = $108,668.99 divided over five years (six payments) of $20,204.17.
This piece of equipment is used for the following Public Works Tasks:
1. Citywide Storm Water Sewer System maintenance, repairs and infrastructure pipe and basin replacement projects.
2. Streets berm repairs, loading and unloading materials (stone, dirt, salt, patch, rubble….). lifting castings, curbing, trees, stumps, ice jams, highway/roadway debris, lifting heavy objects of various types, transporting materials throughout the City, Emergency removal and clearing operations (trees, car parts from accidents, clearing roadways quickly).
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 515-800528
Professional Services
Other [provide explanation]
Fiscal Impact
X Currently Budgeted 201-6240-52540, $20,204.17
Supplemental Appropriation Required (Account #, $)
Appropriation Not Required.
Does this legislation require use of an emergency clause?
X Yes-To expedite ordering and lock in lease interest rate
No
Recommendation
Suggested Action
Staff recommends that City Council approve this Resolution authorizing the City Manager to award and enter into a contract with Murphy Tractor & Equipment for the purchase of one (1) John Deere backhoe and associated attachments at the Ohio STS price of $108,688.99 and for the execution of a five (5) lease to own contract with John Deere Construction & Forestry Company at an annual payment of $20,204.17 for the purchase of the backhoe, and declaring an emergency
Submitted by,
Jane Howington, City Manager
Frank J. Comeriato, Jr., Assistant City Manager-Operations
Eric Hutchinson, Assistant Public Works Director-Services