R2007-90 ACCEPTING BID AND AUTHORIZING AGREEMENT

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COUNCIL CONIMUNICATION FORM PURCHASINC'T & INTERNAL SERVICES MEMORANDUM #07-23 May 11, 2007 TO: Honorable Mayor Osborne and City Council FROM: Steve Gar ity Manager Ron Neufel in�ncial Management Director Deborah M. Perry, Purchasing Supervisor�P SUBJECT: Bids for diesel powered extendahoe loader/backhoe SUMMARY RECOMMENllATION: Staff recommends awarding contract to Altorfer, Inc. for Alternate 2, which is a 5 year total cost bid, to furnish one (1) 2007 416E Caterpillar diesel powered extendahoe loader/backhoe for $58,440. Altorfer further agrees to trade in the existing 2001 Caterpillar model backhoe for $27,500. The maximum cost of repairs will not exceed $12�0 for 5 years or 5000 hours. Altorfer also guarantees to buy back the backhoe at the end of 5 years or 5000 hours for $27,500, thus the total cast is $4690. BACKGROUND: This equipmerit �eplaces a 2001 416D Caterpillar backhoe currently in service. Bid specifications requesting two bids were prepared due to the previous success the City has experienced on total cost bidding of equipment. Alternate 1 —Purchase bacichoe outright Alternate 2 —Guaranteed buy back at end of 5 years or 5000 hours. The bids were evaluated using the average annual cost of the backhoes. The low bidder for Alternate 2 has provided the City with the necessary bonding requirement. P01'ENTIAL OBJECTION: None INPUT FROM OTHER SOURCES: The backhoe was requested by the Street Department. Fleet Maintenance wrote the bid specifications. All recommend approval of bid. STAFF REFERENCE: Rick Marley, Director of Engineering & Infrastructure, 424-2747. Ricl< will be at the council meeting to answer questions the council may have about this purchase. BUDGET: $58,440 ($27,500) less trade in $30,940 from the Equipinent Replacement Fund.