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City of San Leandro Meeting Date: January 22, 2019 Staff Report Agenda Section:File Number:18-658 ACTION ITEMS Agenda Number:10.A. TO:City Council FROM:Jeff Kay City Manager BY:Debbie Pollart Public Works Director FINANCE REVIEW:David Baum Finance Director TITLE:Staff Report for a City of San Leandro City Council Resolution to Authorize the City Manager to Execute a Sole Source Rent-to-Own Agreement with Nixon-Egli Equipment Company for a Cold Milling Machine at an Amount Not to Exceed $673,628.69 and Appropriation of $673,628.69 from the Gas Tax Fund SUMMARY AND RECOMMENDATIONS Staff recommends that the City Council approve and authorize the City Manager to execute a 13-month sole source rent-to-own agreement for purchase of a cold milling machine at a total cost of $673,628.69 (taxes and shipping costs included). BACKGROUND With the passage of SB1 in November 2017, the City is the recipient of State monies (issued monthly) for maintenance projects located within the right-of-way. In May, 2018 the City Council approved a 3-month rental of a cold milling (grinder) machine. Along with the City Council’s approval to purchase a new asphalt paver in 2017, these two pieces of equipment allow Public Works to increase the amount and complexity of asphalt repairs that can be accomplished by staff. Analysis With the Public Works Department’s 3-month rental of a grinder last year (with a 1-month extension that was approved by Council in September 2018), it quickly became evident that the grinder was integral to staff’s ability to perform road maintenance work at a higher volume and level of complexity. Because Proposition 6 did not pass, SB1 funds to continue to be forthcoming from the State. The State Controller’s Office (SCO) estimates that the City will receive approximately $1.477M in SB1 funds during fiscal year 2019. This is in addition to the $1.915M in Highway Users Tax Act Page 1 City of San Leandro Printed on 1/17/2019