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File Number: 18-658 <br />(HUTA) monies (for fiscal year 2019) that are shared between the Public Works and Engineering <br />& Transportation Departments for use in road maintenance projects. <br />As indicated in previous Council staff reports, there is only one company, Nixon-Egli Equipment <br />Company that offers this particular type of grinder. Therefore, in consultation with the City’s <br />Purchasing Agent, staff requests a sole source purchase of this rent-to-own option offered by <br />Nixon-Egli. Per the attached agreement, 90% of the monthly rental rate of $27,000 ($24,300) will <br />go towards the purchase price over a period of 12 months, with the balance due (including <br />remaining tax and freight charges) in month 13. The payments would be broken down as follows: <br />Months 1-12:$27,000 (equipment rental) x 12 = $324,000* <br />$2,497.50 (tax on rental) x 12 = $29,970 <br />* 90% of the equipment rental, or $291,600, counts towards the purchase price <br />Month 13:$318,038.69 Balance Due (includes remaining tax & freight) <br />Although the rent-to-own option ultimately costs the City 5.57% more than if the grinder were to be <br />purchased outright, staff recommends the rent-to-own option because it would allow more HUTA <br />and SB1 funds to remain allocated for actual road maintenance projects, especially those done <br />by contract through the Engineering & Transportation Department. <br />Having a grinder to use in-house by staff (whether rented or ultimately purchased) has several <br />advantages over utilizing all of the SB1 funds solely for additional contract work as follows: <br />·No contractor mobilization fees <br />·Lower costs for fuel and asphalt due to the City’s municipal rates <br />·Ability to use in-house staff across several different labor functions <br />·Flexibility in quickly changing/adding work locations based on need <br />·Ability to communicate/work more closely with residents/businesses to minimize <br />impacts to them <br />·Ability to make same-day corrections/modifications <br />Budget Authority <br />Based on the full rent-to-own amount of $673,628.69, an appropriation from the Gas Tax Fund <br />Balance 140 to Operating Account 140-31-057-5610 for the entire rent-to-own amount is <br />requested. It is noted that the 13-month payment process will occur over two fiscal years. <br />ATTACHMENTS <br />Attachments to Staff Report <br />·Equipment Quote <br />·Purchase Option Terms and Conditions <br />PREPARED BY: Debbie Pollart, Director, Public Works Department <br />Page 2 City of San Leandro Printed on 1/17/2019