Memorandum

City of Lawrence

Public Works Department

 

TO:

Charles Soules

FROM:

Tom Orzulak

CC:

Dena Mezger, Tammy Bennett

Date:

April 11, 2007

RE:

Equipment Replacement

 

The Street Division currently has a significant amount of equipment that is at, near or well past its service life. Having good, dependable equipment is very important in being able to provide quality services to the public in the most efficient manner. The Street Division is called upon continually to provide widely diverse maintenance and construction services in a timely and efficient manner throughout the year. We must also be ready to respond to any emergency, natural or man made, at a moment’s notice.

 

These past few years of tight budgets and rising costs have made it extremely difficult to replace some of the equipment we use on a regular basis in a timely manor. The price of steel and labor required to produce construction type equipment has risen 50% or more in just the last five years. These costs are projected to increase further with the new Tier II emission standards for construction equipment that will take effect in 2008. This cost alone may be as high as $12,000 to $15,000 per unit.

 

Maintenance costs to keep these older units in the fleet have increased dramatically over the past several years. In some cases, replacements parts are no longer available and we have been forced to search out used parts or make them in order to keep the equipment in service.

 

Within the last year we were able to purchase one dump truck and a street sweeper that were included in the approved budget and an asphalt roller with excess equipment funds. In the 2008 budget, we have asked for the paver from the gas tax fund, one more dump truck in the Storm Water fund, and three mower decks –one from the Airport fund and two from the Levee fund. Assuming these items are funded, the remaining immediate equipment needs are estimated to cost $725,000.  The following is the list of that equipment.

 

  1. One Motor Grader. Cost $192,000. Used for alley, road and levee grading. Also used for snow removal and ice cutting. We currently have two, a 1985 and 1986 model, both of which are worn out. One new grader would be needed to replace the two old units thus reducing the fleet by one unit.
  2. Three heavy duty Farm Tractors. Cost $168,000. Used for mowing the Levee and the Airport during the summer and for alley maintenance, grass land restoration of drainage ways, and snow removal during the winter. These would replace the three light duty1998 models we have now.
  3. One Wheel Loader. Cost $140,000.Used for loading, material mixing and stocking, earth moving, snow and debris removal. This would be in addition to a 1997 model that would be used in secondary service at the west 40.
  4. Truck Mounted Oil Distributor. Cost $115,000. Used for heating and spraying road oils for paving and oil and chip skin patching. This would replace a 1979 model that is obsolete.
  5. One Tandem Axle Dump Truck. Cost $110,000. This would replace a 1996 model truck that is at the end of its service life. It is used for general hauling and for snow removal.

 

All of this equipment is used in multiple facets of street maintenance and operations: street repair, storm water work, airport and levee maintenance, and snow removal. 

 

In order to fund the purchase of these large pieces of equipment, I am suggesting the use of bonds, which are currently used for other major equipment purchases such as fire trucks. The life of these types of equipment would be 10 to 15 years. Since all of the funds (General, Airport, Levee, Gas Tax and Stormwater) use this equipment, portions of the debt service could be budgeted from each of those funds. Currently, only the gas tax and stormwater funds are used for equipment purchases. The savings of getting this equipment as soon as possible, because of known future price increases for steel and emission controls, could be as much as $75,000 to $150,000. These savings would be expected to more than offset the financing costs.

 

We will continue to have other equipment to be replaced such as light trucks and street sweepers. However, this type of equipment is only expected to last 8 years or less and would not be suitable to purchase with bond money. These units will continue to be submitted for replacement as part of the regular budgeting process.

 

Please give this proposal your consideration. I will be happy to answer any questions that you or others may have.

 

Attach:                   Equipment Replacement List