Memorandum

City of Lawrence

Public Works

TO:	Charles F. Soules, P.E., Public Works Director
FROM:	Robert Aaron, Fleet Division Manager Mike Perkins, Street Division Manager
Date: CC:	11/18/2014 Bob Brower, Dave Wagner, Mike Lawless
RE:	Three Year Backhoe Lease – 2015 to 2017

Please place the following item on the consent agenda for the City Commission to consider at their December 2, 2014 meeting:

Background

The Public Works Streets Division and the Utilities Department entered into a three year lease for backhoes in the 2012 budget year.  This lease will be at its term on February 1, 2015.  In working with the Fleet Division, Public Works and Utilities have determined that the lease provides a lower cost of ownership over the life of the machine.  The Streets Division lease will be for three (3) backhoes and Utilities Department will lease two (2). On October 7, 2014, the City Commission authorized Public Works and Utilities to solicit bids for the replacement of 5 backhoes.

Utilization

The city’s backhoe fleet is used for a wide variety of maintenance functions throughout the city operation.  These are versatile machines that serve important roles in keeping city services in working order.  Utilities Department utilizes these machines for water main replacement, water main leak repairs, and water service installations.  The Public Works Department uses these machines in pavement rehab, both concrete and asphalt, curb and gutter repair, and new construction, storm water for drainage work, clearing open drainage ditches, doing excavation for repairing and installing inlet and junction boxes, and excavating for the installation of culverts and drainage pipe. All three (3)  backhoes makeup a major part of our snow and ice equipment, they are used to load de-icing materials, open intersections after plowing operations, and remove snow as needed from ADA access areas at crosswalk areas.

Bids

The current bid information has been submitted and is as follows.  The Utilities numbers in the chart below reflect a deduction for trade in value of unit #231.

Bidder	Individual Lease Payment Per Machine	Total of Lease Payments	Meets Specifications
Foley Equipment Co.	Streets:     $37,762.00 Utilities:     $17,762.79	Streets:     $113,288.37 Utilities:      $35,525.58 3yr total:   $148,813.95	No
Victor L Phillips Co.	Streets:     $43,177.37 Utilities:     $43,177.37 Utilities#2: $34,000.00	Streets:     $129,532.11 Utilities:      $43,177.37 Utilities#2:  $34,000.00 3yr total:   $206,709.48	No
Sellers Equipment	Streets:     $52,047.71 Utilities:     $52,047.71	Streets:     $156,143.13 Utilities:     $104,095.42 3yr total:   $260,238.55	No
Murphy Tractor Co.	Streets:     $38,172.00 Utilities:     $30,690.00	Streets:     $114,516.00 Utilities:      $61,380.00 3yr total:   $175,896.00	No

While none of the bidders met all the specification’s we evaluated all the bid packages against the need and specifications. Foley Equipment, 420F failed to meet the specifications of extendable center of rear axle depth, no limited slip front axle, and failed to meet lifting capacity.  Victor L Phillips, 590 Super N failed to meet loader capacity, did not offer limited slip front axle, and failed to submit Backhoe and Cab section of the bid.  Sellers Equipment Co., 3 CX-15 failed to meet extendable center of rear axle depth, extended boom requirements, the rear axle is limited slip (not differential lock), and failed to submit bid page confirming full machine warranty.  John Deere, 410 K failed to meet loader break out force and loader lift capacity, but did offer a limited slip front axle and met the extendable center of rear axle depth.   Based on review of all machines the digging depth requirement was the determining factor of the recommendation for the John Deere.

These units are a crucial part of the City’s repair and maintenance of city services.  The lease option provides and additional budgetary tool known as a full machine warranty that helps keep unexpected repair costs down.  The only repairs that we perform would be on wearable items or operator damage.  This has proven to be an area of savings that also make the lease option a viable solution.

After a comprehensive review by Fleet Maintenance, Utilities, and Street Division, it was determined that the John Deere will meet our needs and allow us to complete all tasks assigned to this piece of equipment.

Funding

The adopted 2015 budget included fund allocation for this lease. Funding for these purchases will be from in the 2015 operating budget.  

Action Request

Authorize the Public Works Streets Department and the Utilities Department to award the three year backhoe lease to Murphy Tractor of Topeka for five (5) backhoes.  Purchase Orders will be submitted in the month of January 2015.