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All of the proposals met the requirements, but pricing varied (see Attachment A). Each
<br />company’s purchase options include the same maintenance agreement as the lease. Maintenance
<br />agreements provide for maintenance, toner, parts, and labor in the rates. All proposals include
<br />delivery, installation, initial supplies and training.
<br />
<br />Below is a breakdown of the total five year cost and monthly cost for each proposal, this includes
<br />the lease or purchase option and the maintenance agreement:
<br />
<br />Company Five Year Purchase Option Purchase Monthly Cost Five Year Lease Option Lease Monthly Cost
<br />Canon 41,109$ 685$ 50,280$ 838$
<br />Loffler A 30,834$ 514$ 33,230$ 554$
<br />Loffler B 32,068$ 534$ 34,161$ 569$
<br />Marco 27,916$ 465$ 30,391$ 507$
<br />Metro Sales A 45,769$ 763$ 47,820$ 797$
<br />Metro Sales B 35,247$ 587$ 36,540$ 609$
<br />When considering leasing versus purchasing, leasing is the more expensive option; however,
<br />leasing may be more attractive as the payments are spread out over five years and there is not the
<br />initial cash outflow associated with purchasing a new machine. If the City were to purchase a
<br />new machine, it can expect it to last approximately five to seven years; there may be some
<br />residual value left in the machine at the end of its useful life but it is unclear what that would be
<br />and what the associated costs would be to dispose of the machine.
<br />
<br />The true cost of the City’s current machine from June 2015 through June 2020 (5 years and 1
<br />month) has been $95,099 or $1,559 monthly. Of the $95,099, $87,200 was for the lease and
<br />maintenance agreement, $7,436 was for printing overages, and $463 were miscellaneous fees.
<br />
<br />For the last two years, the monthly black and white copy volume averaged 12,000 copies, we
<br />estimate an average of 5,800 color copies per month. Also, for the last two years, we have
<br />incurred 17 service calls on the machine; service calls are covered under the maintenance
<br />agreement and we do not incur any additional costs for these.
<br />
<br />The proposal from Marco was the least expensive for both purchase and lease, with a five year
<br />total cost at $27,916 and $30,391, respectively. Marco is the company that Roseville IT uses for
<br />their printing/copy services, and has been generally satisfied. Staff would recommend Council
<br />directing staff to bring forward a proposal with Marco for formal approval at a City Council
<br />meeting. If Council is agreeable to this, Council should consider whether or not it is interested in
<br />purchasing or leasing a machine.
<br />
<br />Budget Impact
<br />
<br />The City’s current lease is budgeted at $1,429.50 per month, all of the options proposed have a
<br />less expense option to lease, and are less expensive to purchase when amortized over 60 months.
<br />Should the City choose Marco as the preferred option, the City can expect to save approximately
<br />$930 per month, or $56,000 over the course of five years.
<br />
<br />There are not sufficient funds in the 2020 budget to cover the upfront purchase price of any of
<br />the copiers. If the City were to purchase the Marco copier, it would need to utilize
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