From
Jim Cummings
Title
Two 2-year annual lease agreements with Caterpillar Financial Services Corporation to lease an 836K Compactor and a D8T-T4 Dozer for the landfill, in the amount of $661,106.56 for this fiscal year, with a two-year total of $1,322,213.12, through a national, interlocal agreement with Buyboard
Presenter
Patricia Redfearn, Ph.D., Solid Waste Manager
Recommended Action
Approve
Analysis
Compactors and dozers utilized at the City's landfill run approximately 3400 hours annually. The landfill's daily operation is governed by State and Federal regulations necessary to ensure environmental compliance. The facility's site operating plan specifies a minimum amount of equipment required to meet these regulatory requirements, which includes fire suppression. Thus, it is important that this equipment be available and functional.
The existing compactor and dozer units are ready for replacement and approved in the City's budget for fiscal year FY 2015/2016. Historically, the City has purchased the equipment; however, growth in customers and additional services (brush pickup) have outpaced the funding capacity in Solid Waste-Landfill budget. The lease acquisition is beneficial to the landfill operations while allowing additional funding for the equipment needs for brush removal crews.
A cost/benefit analysis was presented to the Finance and Government Committee on January 5, 2016. Most beneficial to our landfill operations is to smooth and stabilize funding levels for the costlier equipment items, i.e., dozers and compactors. In addition, procurement with lease options carry warranty coverage for travel, maintenance and repairs. Our existing equipment is beyond the warranty period and we incur premium service costs per call. This year to date, the City estimates that the repair costs for this equipment approximately $160,000. The committee supports this finance method and proceed with the acquisition.
Chapter 271.102 of the Local Government Code authorizes local governments to participate in cooperative purchasing programs with other local governments or local cooperative organizations. In lieu of competitive bidding, items and services may be purchased through such agreements as they have performed the bidding processes by the sponsoring entities or agencies. The City of Grand Prairie utilizes existing master, inter-local cooperative agreements with various entities including the Buyboard interlocal agreement.
Buyboard allows us to save money through "economies of scale", with the pooled purchasing power of their members. They include hundreds of school districts, municipalities, counties, other local governments, and nonprofit entities across Texas. They use the power of numbers as leverage to get better prices with the same vendors we use now. A fee of $400 is due in order to use Buyboard contract # 424-13 effective date October 01, 2013 and expiring September 30, 2016.
Financial Consideration
Funding is available in the FY 2015/2016 Solid Waste Equipment Fund (304010) -68330 Environmental Services-Landfill totaling $686,396.15 through the end of the current fiscal year. Funding for second year of the two-year lease will be paid from that year's approve budget. Itemized quotes are attached for both pieces of equipment.