To: Honorable Mayor and Members of Town Council
Through: David L. Corliss, Town Manager
From: Daniel Sailer, Director of Public Works
Paul Colell, Fleet Services Manager
Title
Resolution Approving a Purchase Agreement with McCandless Truck Center for (1) 2022 HV507 International Dump/Snow Removal Truck
Body
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Executive Summary
As part of the department’s fleet replacement program, the Streets Division of Public Works has one tandem axle plow truck that is due for replacement this year. The truck being replaced has met all the requirements for replacement as outlined in the vehicle replacement policy. With the current situation of delays in truck building it will take 30-36 months to receive this truck. The maintenance and repair expenses for this truck have increased at a rapid rate this year and we believe they will continue to do so. This will increase total cost of ownership significantly. The Fleet Division started to look for a suitable replacement and was able to locate a completed truck that was available for sale at McCandless Truck Center in Denver. This truck is very similar to the current town plow trucks and could be put into service very quickly. The department worked with Finance and Streets to obtain funding for this purchase. Fleet has sufficient funds to purchase this replacement truck, and since the cost is over $250,000.00, we are seeking Council approval to move forward with the purchase.
History of Past Town Council, Boards & Commissions, or Other Discussions
The purchase of this vehicle has been included in this year’s Council approved budget.
Discussion
The department contributes money on an annual basis to the fleet replacement fund so that we are able to replace vehicles and equipment at the right point to obtain the lowest total lifecycle cost we can. The entire Town fleet is on a standardized replacement schedule, and this plow truck is due for replacement in 2022.
A tandem axle plow truck is a heavy duty 58,000lbs truck with V-box material spreader and side tanks for liquid deicing material. This truck is a key piece of equipment for maintaining levels of service for snow removal.
The department has received prior approval from both Finance and Fleet to ensure that all purchasing requirements were met through town policy and Colorado State bid. We are ready to move forward with this purchase.
While already approved in the fleet replacement fund for 2022 as well as the Council approved 2022 budget, the department is seeking formal Council approval as the expenditure exceeds the $250,000.00 signing limit of the Town Manager.
Budget Impact
The current budgeted replacement amount in the fleet fund is $235,900.00 for this truck.
The quote from McCandless Truck Center for this truck is $325,000 leaving a balance of $90,000. An amount of $40,000 in savings will be realized with the under budget purchase of a front end loader and will help offset the difference. The Finance and Street departments have an additional $50,000 in savings that will contribute to the final cost. The continued maintenance needs over the next 30 months along with the potential impact to downtime that would affect snow management operations justifies this additional cost. It is not likely that this cost will change and may potentially increase over the next 30 months.
The replacement amount of $235,900 is part of the annual vehicle replacement program in which the department has previously contributed money to ensure that funding is available for replacement of this truck. Funding has been approved as part of the overall 2022 budget.
Staff Recommendation
Staff recommends approval of the purchase agreement for two main reasons, one the existing truck is having many issues and we believe it will continue to do so, which increases the total lifecycle cost and impacts snow management service levels. Waiting to order the truck in 2023 is anticipated to cost the town another 20% in higher purchase price. Staff recommends the expenditure of funds for a total cost of $325,000.
Proposed Motion
“I move to approve the Resolution as introduced by title.”
Alternative Motions
“I move to approve the resolution as introduced by title, with the following conditions: (list conditions).
“I move to continue this item to the Town Council meeting on _____ date to allow additional time to (list information needed).”
Attachments
Attachment A: Resolution
Exhibit 1: Bid