02-28-2001 Council Agenda - Laserfiche WebLink

Home Browse Search

MAYOR Michael I. Fahey COUNCIL Beverly Scalze Jim LaValle Matt Anderson Rick Montour 515 Little Canada Road, Little Canada. MN 55117 -1600 ADMINISTRATOR (651) 766 -4029 / FAX: (651) 766 -4048 Joel R. Hanson Email: cityhall @ci.little- canada.mn.us MEMORANDUM TO: Mayor Fahey & Members of the City Council FROM: Joel Hanson, City Administrator Greg Schroeder, Public Works Director DATE: February 22, 2001 RE: Purchase of Dump /Snowplow Truck Based on our experience in purchasing dump /snowplow trucks over the Last few years, staff included in the 2001 budget $50,000 for the purchase of a good used truck. After the budget was approved, we undertook a more earnest effort to find our truck. Unfortunately, we determined that the availability of good condition used trucks is very limited. The deals we found back in 1993 and 1996 when we purchased the 1984 and 1986 trucks are no longer there. Good used trucks today are holding a higher resale value, sometimes even higher than we experienced in 1999 when we purchased the 1992 truck. In our search, we found a 1994 used truck that met our needs. However, before we could initiate a deal on this truck, it was sold to another buyer. Our search led us to a 1990 truck that was being used by the Anoka County Airport. However, even though the truck was in excellent condition, the plows needed to be replaced which would raise the cost of the truck to a point where it was not a very good value for the City. We also missed bidding on a 1995 truck at Coon Rapids that sold for $41,300. We did not receive the bid notice until after the due date for submission of bids. During our search for a good used truck, we found a brand new 2000 truck on the lot of one of the local dealers. You may recall that during the 2001 budget discussions, we indicated that we had looked at the purchase of a new truck. However, the lifecycle cost based on State bid prices could not justify its purchase. This is shown on the attached table which shows the lifecycle cost for a 2001 truck to be much higher than the lifecycle cost of the 1984, 1986, and 1992 truck. For reference, I also included the lifecycle cost of the 1990 truck that we were looking at, the 1994 truck that we were also trying to purchase, and the 1995 Coon Rapids truck. As can be seen on this table, the life cycle cost for the 2000 new truck is much lower than a 2001 truck. The reason for this is that the 2000 truck costs shown are lower than the 2000 State bid prices due to the fact that this truck was a cancellation by another buyer which resulted in this truck sitting on the lot incurring interest to the dealer. As a result, we were able negotiate a very good deal for the City H: \KrisP \CORRESP \Kris' 2001 \Trnck.doc Page 53