Agenda Packets - 2012/06/25 - Laserfiche WebLink

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Item No: 07A Meeting Date: June 25, 2012 Type of Business: CB Administrator Review: ____ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Desaree Crane, Assistant City Administrator Item Title/Subject: Resolution 7963, Approving a Lease Agreement with Neopost/Hasler for a Postage Machine Background: In 2007, the City purchased a postage machine (Hasler model) though Minnesota Mailing Solutions. It has come to the attention of Staff that Minnesota Mailing Solutions went out of business, and was purchased by a competitor called Pitney Bowes. Due to this change, the City no longer has a maintenance agreement though Minnesota Mailing Solutions, and therefore, the City is forced to pay for a technician at a high rate if the postage machine were to fail or break. The Maintenance Agreement through Minnesota Mailing Solutions was $550/year. If a Pitney Bowes technician were to conduct maintenance on the City’s current machine, without a maintenance agreement, costs could be up to $400/per day, depending on the issue. Staff contacted Pitney Bowes to negotiate a maintenance agreement. At first, Staff was informed by Pitney Bowes that they could provide the City with a maintenance agreement at the same cost as Minnesota Mailing Solution ($550/year) with the City’s current postage machine model. Staff contacted Pitney Bowes once a week for five (5) months to try to obtain a written maintenance agreement for the current machine. Every time Staff contacted Pitney Bowes, Staff was informed that a Pitney Bowes Manager would follow up on the maintenance agreement inquiry. Finally, in early June, Staff was informed by Pitney Bowes that the City’s current equipment is not a Pitney Bowes machine, and therefore, they are not able to provide the City with a maintenance agreement. While Staff was trying to obtain a maintenance agreement through Pitney Bowes, Staff also contacted a company called Neopost/Hasler to inquire whether they could provide the City with a maintenance agreement. Staff was quoted a price of $1,600 per year by a representative of Neopost/Hasler. It was explained to Staff that the City’s current machine is obsolete and getting parts for the machine will be difficult. According to Neopost/Hasler, the City’s current machine is five (5) years old and the machine is worth less than $1,600. Staff considers it cost prohibitive to have a technician repair or maintain the current postage machine. Presently, the postage machine is starting to fail. The postage machine is having difficulties sealing envelopes, and the postage meter is starting to fail as well. The Finance Department recently mailed out late utility billing notices using the City’s current machine. Many of the notices came back undeliverable by the Post Office because the late notices did not seal in the envelopes properly. Staff now has to check each envelope to ensure that all envelopes are sealed properly. This has become a very time consuming task.