Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO TERMINATE CURRENT LEASE AGREEMENTS WITH COMDOC AND KONICA MINOLTA AND TO ENTER INTO A NEW AGREEMENT WITH RICOH USA, INC. FOR THE LEASING OF MULTIFUNCTION EQUIPMENT FOR THE MUNICIPAL SERVICES CENTER; AND DECLARING AN EMERGENCY.
Executive Summary: The Administration is requesting City Council’s approval to end the current Municipal Services Center agreements with ComDoc and Konica Minolta, and then enter into a new 5-year lease agreement with Ricoh USA, Inc. for the lease of new multifunction equipment. The new contract period will commence December 1, 2016 and conclude November 30, 2021.
Body
Legislative History
None.
Purpose & Explanation
The City of Hudson Municipal Services Center (MSC) is currently under multifunction equipment lease agreements with multiple vendors as a result of merging departments into one facility. In an effort to consolidate this equipment and provide further efficiencies for MSC, a lease agreement for a 5-year term with Ricoh USA, Inc. is requested.
With current leases expiring in 2016 and 2017, along with the desire to consolidate equipment, improve operating efficiency and provide cost savings, Susan Chapman, Office Manager sought proposals recently for leasing equipment from two companies:
Ricoh USA, Inc.: 5 yr. lease (4 new) at $4,984.80 per year, total = $24,924.00.
ComDoc: 5 yr. lease (4 new) at $6,960.00 per year, total = $36,085.00.
ComDoc: 5 yr. lease (4 certified pre-owned) at $4,896.00 per year, total = $24,480.00.
Upon Susan’s review of the proposals submitted, Susan believes the best proposal is from Ricoh USA, Inc. The City’s Finance Director and City’s Information Services team agrees. Ricoh USA, Inc. has a State of Ohio Procurement contract, whereas ComDoc is a member of the Cooperative Council of Governments. With this proposal, the City is reducing MSC multifunction equipment from seven (7) to four (4). The new leased equipment, four (4) new devices, will be located in Administration, Community Development, Engineering and the MSC front customer service area. It is recommended to eliminate equipment by the mailboxes, non-renewal of equipment in the Clerk’s office, reduction of desk top printers and cancellation of equipment at Town Hall. Ricoh USA, Inc. is suggesting an annual lease agreement for a 5-year term at an annual cost of $4,984.80. This agreement provides the following equipment: Mpc2004, Mp305spf and two (2) Mpc4504 devices; all with full maintenance service, parts, toner and staples. Additionally, this recommendation for MSC results in an estimated savings annually of $9,192.20, with an estimated savings over five (5) years of $45,961.00 compared to current.
It is staff’s recommendation to begin implementation with MSC, with the intent to enter a City-wide agreement with Ricoh USA, Inc. in 2017. With this, it is possible to see annual savings of $18,468.00 with a 5-year savings of $92,340.00 compared to current, including Public Works, EMS, Fire, Police, and MSC. The estimated savings does not include lease cancellation fees or reflect savings in toner, parts or supplies.
In summary, entering into an agreement with Ricoh USA, Inc. will provide further efficiencies and cost savings.
Timing Considerations
The City Manager will enter into a new lease agreement with Ricoh USA, Inc. for MSC following City Council’s approval.
Fiscal Impact
X Currently Budgeted
Supplemental Appropriation Required
Appropriation Not Required.
By ending the current MSC lease agreements and then entering into a new lease agreement, the estimated savings will be $9,192.20 in 2017, and then $45,961.00 over the 5-year term. Future intent to enter into a City-wide lease agreement to include Public Works will reflect an additional savings in 2017 of $9,275.80 with a combined 5-year savings for MSC and Public Works of $92,340.00. This is a result of consolidation of equipment and difference in the annual value of the lease terms.
Recommendation
Suggested Action
After reviewing the positive impacts of entering into a new lease agreement at this time, staff recommends that City Council approve the Resolution authorizing and directing the City Manager to enter into an agreement with Ricoh USA, Inc., 4125 Highlander Parkway, Suite 175, Richfield, Ohio 44286 to provide multifunction equipment for MSC for the next 5 years.
Submitted by,
Jane Howington, City Manager
Jeff Knoblauch, Finance Director
Susan Chapman, Office Manager