Memorandum

City of Lawrence

Public Works

TO:	Charles F. Soules, P.E., Public Works Director
FROM: CC:	Robert Aaron, Public Works Fleet Manager Mark Thiel, Assistant Public Works Director Mike Perkins, Public Works Streets Division Manager
DATE:	12/29/2015
RE:	One (1) sign truck replacement

Background

The City Commission authorized funds for the replacement of a traffic division sign maintenance truck in the 2016 budget process.  Unit 989, a 1997 Ford F350, has been identified as a unit in need of replacement. This unit meets the city’s replacement criteria. The equipment replacement schedule is based on age, mileage, hours of use, and cost of maintenance and upkeep. Bids were sent as required by the city’s purchasing policy. 

As the 2016 budget process proceeded, city staff worked to develop a comprehensive replacement plan to utilize a fixed amount of funds that were made available for the replacement plan. Two vehicles were identified as being financed through a lease–payment program, based on limited available funds. This vehicle, along with another high purchase cost vehicle, was identified as good candidates for financing options. The other vehicle was authorized in a previous governing action.

Once authorized, finance staff will request proposals from local banks for finance lease terms. Terms will be presented to the commission on a later session.  The proposed resolution, No. 7149, is establishing intent of the governing body to ultimately lease this vehicle utilizing tax exempt financing.  The purchase cost of this vehicle will ultimately be higher after the five year lease depending on the interest rate obtained.

Staff Recommendation

Central Maintenance Garage and Traffic Staff recommend the purchase of one (1) Dodge Ram 5500 Chassis equipped with a Knapheide sign body and hydraulic system from Davis-Moore Auto Group.

Vendor	Chassis	Body	Net Bid
Laird Noller Ford	Ford F550	Knapheide	$82,862.00
Shawnee Mission Ford	Ford F550	Knapheide	$82,862.00
Davis-Moore Auto Group	Ram 5500	Knapheide	$79,412.00

Funding

Funding for this purchase was approved in the 2016 budget process and utilizes a five year lease-purchase.

Action

Authorize the Traffic Division to purchase one (1) sign maintenance truck form Davis-Moore Auto Group for the amount of $79,412.00.

Adopt Resolution No. 7149 in the amount of $79,412.00.00 for the purchase on (1) sign truck.  A resolution is necessary to facilitate the use of tax exempt lease-purchase financing. The lease-purchase allows the city to diversify its capital for the next five years, allowing funding to be utilized for primary needs.