2003 AGN MAY 20 I09 - Laserfiche WebLink

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CITY OF COLTON Item #9 AGENDA REPORT FOR CITY COUNCIL MEETING OF MAY 20, 2003 TO: HONORABLE MAYOR AND CITY COUNCIL MEMBERS FROM: DILU DE ALWIS, FINANCE DIRECTOR (�_ SUBJECT: ADOPT THE ATTACHED RESOLUTION TO ENTER INTO A FIVE-YEAR LEASE CONTRACT FOR TWO (2) DIGGER/DERRICK LINE TRUCKS FOR THE ELECTRIC DEPARTMENT WITH ALTEC CAPITAL SERVICES FOR A COMBINED MONTHLY AMOUNT OF $5,466.00 DATE: MAY 12, 2003 BACKGROUND On April 24, 2003, the City Colton Electric Utility experienced a major loss when three (3) Digger/Derrick Line Trucks (Line Trucks), were destroyed by a fire at the Colton Electric Corporate Yard. The fire destroyed the entire Line Truck fleet. The Electric Utility had budgeted to replace one of the Line Trucks in the 2002/2003 fiscal year and is currently in the process of going out to bid for that replacement. This purchase will be in accordance with the SCAQMD regulations and satisfy the replacement need for one (1) of the destroyed Line Trucks. Although the purchase of one (1) Line Truck is currently in the bidding process it is not feasible for the utility to replace all three (3) of the Line Trucks that were destroyed, through this process. The following factors were taken into consideration when the Electric Department and Purchasing staff decided that it would be in the City of Colton's best interest to enter into a lease agreement for the replacement of the remaining two (2) Line Trucks: 1) The purchase of a Line Truck has a delivery lead time of approximately 270 days, (9 months); 2) The Electric Utility is currently renting one (1) smaller less adequate Line Truck in order to respond to emergency situations and is working with inadequate equipment to accomplish the routine work, maintenance and new work of the utility. This rental will be returned when the Utility takes delivery of the leased Line Trucks; 3) The urgent and immediate need for the Electric Utility to have Line -Trucks to accomplish the above mentioned situations; 4) The cost to replace the three (3) Line Trucks would be approximately $780,000. The Electric Utility does not have a budget that could absorb this type of expense. Section 3.08.06 of the City's Purchasing Ordinance allows the City to waive the competitive bidding process for the purchase of supplies, services and equipment in instances of valid emergencies that require an order be placed with the nearest most available source of supplies and when it is determined that the public interest would not be best served by competitive bidding. The City of Colton Electric Utility is requesting the City enter into a lease with Altec Capital Services, L.L.C. for one (1) Altec D3060 on IHC 4900 6X6 Digger/Derrick Line Truck at $2,985.00 per month and one (1) Altec D3060 IHC 4900 6X4 Digger/Derrick Line Truck at $2,481.00 per month, in accordance with the terms of lease contract. The lease will be for a five-year period at a combined cost of $5,466.00 per month. DISCUSSION/ ANALYSIS Staff solicited quotations for the lease of two (2) adequate Digger/Derrick Line Trucks and the availability of the Line Trucks for a five-year lease term from three (3) vendors. Proposals were received from the following vendors for a three-year lease: VENDOR: 1. Altec Industries, Inc., Dixon, CA. Combined lease payment for 2 Line trucks One (1) 6X6 and One (1) 6X4 2. Pacific Utility, Ontario CA MONTHLY PAYMENT $ 5,466.00 $ 3,775.00 DELIVERY TIME 1 Week 6 months