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HomeMy WebLinkAbout2004-04-12 04-115 RESOLVEItem No. 0Y115 Date: 4-12-04 Item/Subject: RESOLVE, Appropnadng $38,4601n Revenue Sharing for Me Purpose of Purchasing a Used Printing Press Responsible Department: Finance During the F 004 budget process, the City was advised to hold estimated Revenue Sharing revenues flat based upon actual receipts in Fy2003. Thus the City budgeted for $3,110,000 in Revenue Sharing for this year. In September, the City received revised estimates from the Stare Treasurer's Office indicating Mat Barl estimated Revenue Sharing far Ftt004 was $3,589,000. After nine months of receipts, it appears that actual State Revenue sharing will be at least this amount. To date she City has appropriated $285,000 of the excess N replace a 1982 fire ergine. The attached resolve would appropriate an additional $38,460 of the excess to replace a 35 year old ane color printing press, Based upon the need and the Otys capital plan, staff andapated replacing the printing prey as part of the H2005 annual appropriation resolve. However, City staff found a 1 year-old press with only 3 months of use, resulting in an $8,000 savings ever the estimated cost of a new press. In order W obtain this press, the request has m be evaluated outside of Me budget process. The current press Is prone to maintenance delays due M its' age, Is outdated for use in high volume reproductions, limited to 8'h x 11 work, hall to one color runs, and is not longer in compliance with OSHA safety standards. The proposed replacement will more effectively and efficiently handle high volume jobs, paper in excess of 8 lh x 11, two color runs, and meets OSHA standards. It Is estimated that the new printing press will result in $8,000 of additional revenue M this cost center. The finance Committee reviewed this request and recommends approval by a 3 — 2 vote. /f . n Department Head Manager's Comments: It is dear that a new press is required to handle the Otys current requirements for high volume printing. Normally this would be considered as a pan of Me budget process. However, given the savings that can W realized by the opportunity that has been presented, l would recommend your approval of mowng forward on this now. pp W ol ivu i:"W 4iat J 1Ta F~u 45mW61W City Manager Associated Information Budget Approval: Finance Director Legal Approval: city Sold Introduced for Passage X First Reading Page _ of Referral Aeeigoed to councilor Farrington April lz, zooa CITY OF BANGOR (TITLE.) Resolve, Appropriating $38,9 D In Revenue Sharing for the Purpose of Purchasing a Used Pdntln9 Press By the Gly Couwl of Me Uy ofHamgor. BE IT RESOLVED THAT the sum of $36,960 In additional current year Revenue Sharing Funds be appropriated as a transfer to the Capital Projects Fund for the purpose of purchasing a used Printing Press. IP LIT[ COUNCIL April 12. 2006 First Heading T4 IN CRY COUCIL April 26, 2006 Motion Mede soul Secoaded for Passage Notice Doubted Vote: I yea, 1 0o. 1 absent Couacilora voting yes: Casbaell. D'Hrrico, Farrington, GraMck, Nealley. Palmer and Tremble Councilor voting go: Allen Comcilor absent:CGreea Passed C CLCD (TITLE( AppruPriating $38,660 in Reveaae Sharing for the Furpose of Furconsing a Used Printing Presaa Aaelgnatl to Councilor 411M o 'fib. it of Br ire w bgrme.on To: Ed Barrett From: Debbie Cyr Re: Financing Option- Printing Press Date: April 81 2004 04-115 24794s4400 rax 21T1945-4446 aebbie.cyr®bgmie.org FINANCE DEPARTMENT Deboxb A. Cyr, Fownce DirMor Background On April 5, 2004, the France Committee discussed whether or not to purchase a refurbished printing press now saving approxlmately $8,000 versus Considering the purchase of a new press during the budget process. Included in the proposal from the vendor, A.B. Dick, was the option to lease the equipment. Lease A.B. Dick offered the City a lease with a $1 purchase option a[ the end of five years. The imputed interest rate in the proposed lease is 8.85%. This rate far exceeds the Interest that the City would earn on funds invested over either the short-term or long-term basis. At the Committee meeting there was some consideration given to leasing the equipment over some period of time. Regardless of the lease term, the City would incur on average an additional $1,800 in interest charges per annum. Recommendation Staffs recommendation to the Finance Committee was to appropriate the $38,460 from unanticipated revenue sharing funds and purchase the equipment outright, which Is reflected in the Council Resolve included for first reading on April 12, 2004. Over the years, as the City's financial position has improved, and especially of late as investment earnings have decreased, the City has moved away from the lease purchase arrangement. Thus recognizing that the City's Cost of funds exceeds the Investment potential. 73 Harlow Street • Bangor, Maine 04401