07-25-2022 City Council Packet - Laserfiche WebLink

Home Search

STAFF ORIGINATOR MEETING DATE TOPIC: VOTE REQUIRED INTRODUCTION CITY COUNCIL AGENDA ITEM 1D Hannah Lynch, Finance Director July 25, 2022 Postage Machine Lease 3/5 The City owns its current postage machine and recently received the annual invoice for standard maintenance which increased 25% from the previous year. The increase is due to the age of the machine which prompted City staff to analyze buying vs. leasing a new machine. BACKGROUND The City's current postage machine is an IN-700. It was purchased in 2016 for $3,825. An invoice is received annually for the standard maintenance contract, meter rental, and rate maintenance. The current annual invoice totals $1,826.31. In addition, the machine will be non- compliant with the USPS within 2 years because of a new IMI barcode requirement which is not present on the machine. Quadient provided a proposal, including lease and buy options, for an iX-5 machine. The iX-5 is a smaller machine than the IN-700 which is more appropriate for the City's postage volume. The iX-5 also has the IMI barcode needed to be compliant with the USPS. Leasing the iX-5 will save money over the life of the lease compared to owning the machine and paying the increased standard maintenance every year. A lease locks in the 5-year monthly payment, is part of the State of Minnesota negotiated pricing, and the I" year of standard maintenance is free which is calculated into the lease amount. Year 1 Year 2 Year 3 Year 4 Year 5 Total Lease $ 2,108.16 $ 2,108.16 $ 2,108.16 $ 2,108.16 $ 2,108.16 $ 10, 540.80 Buy Machine $ 3,985.00 $ - $ - $ - $ - $ 3,985.00 Meter Rental $ 480.00 $ 480.00 $ 480.00 $ 480.00 $ 480.00 $ 2,400.00 Maint Contract $ 768.00 $ 806.40 $ 887.04 $ 1,020.10 $ 1,224.12 $ 4,705.65 $ 5,233.00 $ 1,286.40 $ 1,367.04 $ 1,500.10 $ 1,704.12 $ 11, 090.65 The old machine has no salvage value and will be disposed of. Quadient will deliver and provide training on the new iX-5 machine.