Agenda Packets - 2007/05/07 - Laserfiche WebLink

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Item No. 05C Meeting Date: May 7, 2007 Type of Business: WK City Administrator Review: ______ City of Mounds View Staff Report To: Honorable Mayor and City Council From: Desaree Crane, Assistant to the City Administrator Item Title/Subject: Postage Machine Replacement The lease for the City’s postage machine (E595 Pitney Bowes) will expire in June. Due to this lease expiration, Staff researched other postage machine companies to see if there were more efficient postage machines at a lower cost to the City. Staff received three quotes – Hasler, Neopost and Pitney Bowes. In 2002, the City leased its current postage machine, and as with any equipment its effectiveness has diminished. Staff is requesting that a replacement postage machine/scale be leased or bought due to diminished effectiveness. In addition, Staff feels that this would be the best time to find other competitive rates since the lease will be expiring. Currently, Pitney Bowes is the apparent low bidder. Neopost did submit a proposal, but the postage machines they had did not meet the needs of the City. They were too small for the City’s needs. Therefore, Staff only considered Hasler and Pitney Bowes. Currently the City is paying $262.00 per month to lease its postage equipment from Pitney Bowes and a yearly maintenance agreement for $473.00 a month. Not including the yearly maintenance agreement, the city has paid $15,720 for the current postage machine. That is calculated at $262.00 times 60 months (the city is currently under a 60 month lease with Pitney Bowes). Staff is weighing the options on whether to lease or buy the postage equipment. Attached with this staff report is a breakdown of the quote proposals. Purchasing the equipment would have an upfront cost, but seems to be cheaper in the long term. For example, if we were to purchase the Pitney Bowes DM500 the first year cost would be $4,276.20, then each year after that would cost approximately $984.00 a year ($600/year for postage meter rental + $384.20/year for maintenance- assuming that the maintenance fee does not increase), which comes to a total 5 year cost of $8,213.00. To lease this equipment for 60 months, the cost would be $11,940.00. That is a savings of $3,727.00 The United States Postal Service will be changing rates as of May 14, 2007. Staff will have a representative from Pitney Bowes (our current Postage Machine