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II r Of Report Number 11-044 AA 111.4?-W J ITON Agenda Section VI-6 the city that works for you Council Meeting Date February 8,2011 REQUEST FOR COUNCIL CONSIDERATION ITEM DESCRIPTION: AUTHORIZATION TO PURCHASE PUBLIC WORKS EQUIPMENT —OIL JACKETED HOT TAR MACHINE DEPARTMENT HEAD'S APPROVAL: 604141 CITY MANAGER'S APPROVAL: ars.,` No comments to supplement this reporOF Comments attached Recommendation: Authorize the purchas 2011 250 gallon hot tar machine from SMCI - Stepp Manufacturing Company Inc., based upon Minnesota State Bid for the replacement of unit #959, a 15- year old machine purchased in 1995. Costs and Funding: This equipment will be purchased under Minnesota State bid. The cost of the vehicle is as follows: Contract#C-810(5), from SMCI Equipment Price $39,172 Less Trade-in Price $2,500** Sub-total $36,672 Sales Tax $2,521 Total Price $39,193* *A 2011 replacement cost of $41,900 for this vehicle has been programmed in the Fleet Vehicle Replacement Fund. There is no cash balance available for this purchase. This purchase is planned to be financed with equipment certificates. This purchase will replace a 15-year old Bearcat Kracker#959. The original cost with taxes of #959 was $26,598. The replacement cost not including trade in is $41,865. Over the last 15 years,the annual rate of increase for this replacement vehicle was 2.88 percent. **The dealer has quoted a firm trade-in price of$2,500 for Unit#959. Other methods to sell this unit will be explored by staff. It is expected that this unit could net more in an open market sale. Explanation: The purpose of this item is to obtain Council authorization for the purchase of a 2011 Oil Jacketed Hot Tar machine for the Public Works Department. This enables crews to fill in cracks in the bituminous pavement with hot tar to seal them up after the cracks are ground and blown out. The existing hot tar unit is well worn. Annually, we us the machine to fill cracks on 10-20 miles of streets. This machine has had over$5,000 worth of repairs on it and based on the age and condition of the unit,we can expect even mor significant repairs. This machine is scheduled for replacement on a fifteen-year cycle. Grant M. yffels, . . Director of Public orks Attachments Picture of 1995 Bearcat Kracker(#959)