2005 AGN OCT 18 I08 - Laserfiche WebLink

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ITEM #8 CITY OF COLTON AGENDA REPORT FOR COUNCIL MEETING OF OCTOBER 18, 2005 TO: HONORABLE MAYOR AND CITY COUNCIL FROM: Tom Hendrix, Fire Chief SUBJECT: Authorize the City Manager to Sign a Contract with a Broker Not to Exceed $25,000 and Authorize the Sale of a Fire Deparbnent Ladder Truck in the Amount of $180,000 DATE: October 11, 2005 BACKGROUND: The current budget includes funding for the lease purchase of a new ladder truck to replace the existing ladder truck, which is 10 years old. During budget workshops earlier this year we outlined our plan to sell the existing ladder truck for $180,000, which will reduce the lease purchase cost of a new ladder truck. The sale of the existing ladder truck and purchase of a replacement in this fiscal year allows us to take advantage of the current value of our existing ladder truck and spread out the cost of replacing both the ladder truck and one additional engine that will be due for replacement in the year 2010. The estimated cost of replacing both units in 2010 is estimated to be over 1.5 million dollars. DISCUSSION/ANALYSIS: Due to the limited demand for used fire apparatus, particularly on the West Coast, utilizing a fire apparatus broker is the most effective way to sell a fire truck in a timely manner. After researching several brokers, the Fire Department is recommending a sales contract with Fire Trucks Plus Inc., which is based in Rancho Cucamonga. The other brokers are based on the East Coast and only advertise and connect potential buyers with the seller. Fire Trucks Plus is a full service broker which not only advertises but also performs all required tests on the apparatus, fields all inquiries from interested and potential buyers and arranges for potential buyers, who may be from the East Coast, to inspect the apparatus. The attached agreement with Fire Trucks Plus Inc. guarantees the City $180,000 from the sale of the ladder truck and limits their commission to $25,000. The Fire Department is requesting City Council approval for the sale of the ladder truck pursuant to Colton Municipal Code section 3.08.150, which requires City Council approval for the sale of any supplies, materials, or equipment with a value of more than $10,000. We are also asking that the City Manager receive authorization from the City Council to sign the attached sales agreement with Fire Trucks Plus. FINANCIAL IMPACT: The sales agreement with Fire Trucks plus will cost the City no more than $25,000, which will come out of the sale of the ladder truck. The proceeds from the sale, which is guaranteed to be $180,000, will go towards the purchase of a new ladder truck.