sr-060810-1fCity Council Meeting: June 8, 2010
Agenda Item: l'- ~
To: Mayor and City Council
From: Joan L. Akins, Director of Community Maintenance
Subject: Award Bid for Lease of Three New and Unused Scrubber-Sweepers
Recommended Action
Staff .recommends that City Council authorize the City Manager to negotiate and
execute a lease agreement with Tennant Sales and Service Company to lease three
scrubber/sweepers with a full service maintenance agreement for four years for
Promenade Maintenance, in an amount not to exceed $328,673, including applicable
sales tax, over afour-year term.
Executive Summary
These three scrubber/sweepers will replace three scrubber/sweepers now in use by
Promenade Maintenance. Staff considered both lease and purchase options, and a
lease/maintenance agreement would be the most cost effective way to provide
Promenade Maintenance with the appropriate equipment needed for their operation.
The total cost of the three scrubber/sweepers for four years is $328,673, including
applicable sales tax.
Discussion
Promenade Maintenance uses these sweeper/scrubbers six hours a day, seven days a
week.. The area covered by the units is small but the terrain presents a challenge for
mobility. Promenade Maintenance is replacing three Tennant sweepers which were
purchased in 2004 with athree-year maintenance contract. Staff found that the
maintenance contract was the most cost-effective and productive way to maintain the
units at optimum functionality because the vendor services the units on-site, thereby
shortening the down-time of the vehicle. A maintenance contract has the additional
advantage of predictable costs with fewer surprise out-of-pocket repair bills or
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expenses. When the maintenance contract on the aforementioned scrubber/sweepers
expired, the cost of maintaining the units increased 3.5 times.
Vendor Selection
In March 2010, the City published Notices Inviting Bids for both purchase and lease of
the units in accordance with City specifications. Bid forms were posted on Planet Bids
and notices were advertised in accordance with City Charter and Municipal Code
provisions. One bid was publicly opened and read on March 24th, 2010.
Tennant submitted a proposal for both a Lease Agreement with a four-year
Maintenance Agreement for a total of $328,673 and a Purchase Agreement with afour-
year Maintenance Agreement for a total of $333,296. Tennant offered the company's
Flex Clean four-year Maintenance Agreement for both the lease and purchase options.
The Planned Maintenance Agreement for both leased and purchased vehicles includes
brushes, squeegees, filters, and other parts. Staff found several significant differences
in the Maintenance Agreement for leased units. as opposed to the purchased units. The
Planned Maintenance for a leased unit is every 100 hours, whereas it is every three
months for a purchased unit. These units are in constant use, and are expected to
require maintenance prior to the three-month scheduled service. Tennant charges
$90.00 an hour for unscheduled maintenance, which would greatly add to the
maintenance costs for Promenade Maintenance. In the lease option, Tennant will
provide a loaner if the leased unit is going to be out of service for more than three days,
and will replace the leased unit with a new machine if it is damaged and is not
repairable.
Financial Impacts & Budget Actions
Lease funds in the amount of $172,371 are available at account number
0540167.589200. Funds for maintenance cost of $156,302 will be paid in four yearly.
increments of $39,076. The first annual maintenance payment is included in the
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FY2010-11 budget at account number 54554.522920. Budget authority for future years
will be included in the respective proposed budgets for Council's review and adoption.
Prepared by: Rick Sikes, Fleet Management Superintendent
Approved:
Joa kins
Directo ,Community Maintenance
Department
Forwarded to Council:
Rod Gould
City Manager
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Reference Lease
Agreement No. 9226
(ccs).