HomeMy WebLinkAbout1998-01-12 98-83 RESOLVECOUNCIL ACTION
Date: laniary 12,1998 Item No. 98-83
ItemsubjecY RESOLVE, Appropriating $7,020.00 from the Motor Pool Equipment Reserve Account
(1107-57332200) for the lease pumhase of a crawler dozer.
Responsible Department: Purohasing/Motor Pool
Commentary:
This Resolve would appropriate foods from der Motor Pool Equipment Reserve Amount to
leaso-purchase a Komatsu Crawler -Dozer which would replace an aging piece ofequipmett. The
current crawler -dozer is a 1982 and will be needing major repairs in the near future. The estimated cost
of the leasepurchasefor a raw 1997 dozer is nearly equivalent to the cast of repairs to the curtain
machine overthe nest 6 years.
At to and of the sit year time frame, the City M11 own a 1997 dozer rather tar a 1982 dozer and to
City will have had the benefit ofanewer, more reliable piece of equipment tome. Thisactionwillalso
allow the City in benefit firm a higher trade in value at this time for to current dozer, rater run
waiting and have to hada in value dimGtish overtime.
This item was reviewed with the Finance Committee on October 6, 1997 and to Council agreed with
staffs recommendation to pursue to lease -purchase option.
Ass[. City Manager
Managers Constraints: F�,w.e.rvnw,llo n
City Manager
Associated lvfconarov:
Finance Dire
Legal Approval: E q
City Solicitor
vu
Introduced For.
Passage X First Reading _Refound
98-83
Assigned to Councilor Leen January 12, 1998
CITY OF BANGOR
RITIE.) Qgp].STQr....Appropriating $9,020.00 from the Motor Pool Equipment Reserve
.._........... _............... _.._... _......... _...... .... ..... .... .... .... ................
_.._...
Account (11V9-59332200) for We Lease ltase of a Crawler Dozer.
Bptho CUy Courmid of We City of Bumper.
RESOLVED. the amount of $7,020.W is hereby appropriated from the Motor Pool
Equipment Reserve Account (1107-57332200) to the Capital Project Account for We Motor Pool
(1109-91001175) to fiord the lease purchase of crawler dozer.
The Fireman Director is hereby authorized to take the necessary, action to properly
account for these transactions.
IN CITY COUNCIL
January 12, 1998
First Reading
CLEAR
IN CITY COUNCIL
January 26, 1998
Passed
EER
98-83
RESOLVE
Appropriating $7.020.00 from the Motor
Pool Equipment Reserve Account (130)-
5]332200) for the lease/Purchase of a
YV"
M
MEMO
To: Bob Farrar, Director of Administration
FROM: Randy Mace , Motor P001 Director
SUBJECT: Dozer Replacement
DATE: Sept. 24, 1997
I would like to trade our Cat D3 dozer for anew
ew dozer. This
machine i a 1982 machine and n is the time to trade out of
it. The machine still has a trade value of approximately
$20,000. If we keep this machine for another 5 years it will
have a trade value of $10,000. During these 5 years we will
put between $34,000 a $40,000 into repairs to keep this
machine running. Major components that will wear out and have
to he replaced include;
A) Engine
B) Transmission
C) Final Drives
D). Undercarriage
I belive that we can Lease -Purchase a new dozer for
approximately $6,000 per year on a 6 year lease -purchase
agreement. At the end of this agreement we will own the
dozer.
Bob, we will spend approximately the same amount of money on
a dozer for the next 5 or 6 years whether it is maintaining
our current 1982 machine or making lease payments on a new
1997 dozer. The real benefit comes in the year 2004. At that
point we either have a 1982 dozer or a 1997 dozer that we
will have invested approximately $40,000 in. Another key
point is that while we are investing money in our current
dozer on maintenance the machine will not be available for
work. The money invested in lease -purchase payments will not
affect the availability of the machine to Public works.
This was not something that we bad budgeted for in P 98, but
is the result of our
r attempts to formulate an equipment
replacement Policy that allows the City to maximize its
equipment investments, by trading out of equipment before it
has only scrap value and has to be disposed of through
auctions. The key to doing this is to constantly monitor the
equipment and dispose Of it before the majority of the major
repairs are born by the City. Once this happens we are forced
to invest large sums of money just to keep the equipment in
operating condition and the equipment continues to depreciate
in value.
Please schedule this issue to be discussed at the appropriate
committee meeting.1 will be available to discuss this in much
greater detail in order to address any specific concerns the
committee may have. I£ you have any questions or concerns,
please call me and we can review this proposal.