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Home My WebLink About8A, Chevy S10 Replacement AlternativesPrepared By: James Lehnhoff, Community Development Director Greg Hoag, Public Works Director Budgeted Amount: $28,000 Recommendation: Council Meeting Date: December 14, 2009 Chevrolet S10 Replacement Alternatives Actual Amount: $299294.52 (plus tax, license, and registration) Funding Source: Equipment and Building Replacement Motion to authorize the purchase of a 2010 Ford F-350 from Boyer Ford and related equipment from Truck Utilities inc. for an amount not to exceed $29,294.52 plus tax, license, and registration; to enable repurposing a current Public Works vehicle to replace the Chevrolet S10 pick-up currently used for building inspections, code enforcement, and other related activities. Supporting Documents: 1. December 14, 2009, Memo to the City Council a � DEN HILLS MEMORANDUM DATE: December 14, 2009 TO: Honorable Mayor and City Council Members FROM: James Lehnhoff, Community Development Director Greg Hoag, Public Works Director SUBJECT: Chevrolet S 10 Replacement Action Request Consider approval to purchase a 2010 Ford F-3 5 0 from Boyer Ford and related equipment from Truck Utilities inc. for an amount not to exceed $29,294.52 plus tax, license, and registration; to enable repurposing a current Public Works vehicle to replace the Chevrolet S 10 pick-up currently used for building inspections, code enforcement, and other related activities. Background At the November 9, 2009, meeting, the City Council reviewed a proposal to replace the 1993 Chevrolet S 10 with a 2010 Toyota Prius. At that meeting, the City Council directed staff to research the following alternatives: • Employee Vehicle Use and Reimbursement • Used Toyota, Prius Prices; • Repurposing a Public Works Vehicle S10 Replacement Alternatives Employee Vehicle Use and Reimbursement The S 10 was driven 4,643 miles in 2007 and 6,866 miles in 2008. Through December 7 of this year, the S 10 had been driven approximately 4,900 miles. In 2009, the IRS reimbursement rate was 55 cents per mile, and the 2010 rate will be 50 cents per mile. If the S 10 is driven on average 5,000 miles per year, the reimbursement cost would be $2,500 in 2010. While the annual cost would vary depending on the IRS reimbursement rate, the estimated cost is $25,000 over ten years. The City would not be responsible for any maintenance costs under the reimbursement alternative; however, the City would also not be left with an asset. Page 1 of 4 C:IDocuments and SettingsWecky.brazysIocal SettingslTemporary Internet Files10LK15F1121409 - CC Memo - S10 Replacement. doc The City has been using the S 10 for approximately 16 years. Over the course of ten or more years, the cost of reimbursing an employee for using their own vehicle could very well be higher than the cost of purchasing a new or used vehicle, and it is more expensive than the cost of repurposing a vehicle from Public Works. Used Toyota Prius Prices The website www.cars.com is an online resource for finding and purchasing vehicles from dealers and private individuals. A search for a used Toyota Prius resulted in 61 vehicles within 30 miles of Arden Hills. The prices ranged from $13,990 for a 2004 Prius with 60,330 miles to $25,999 for a 2009 Prius with 10,500 miles. As one would expect, the older vehicles tend to have more miles and a lower price. Most of the vehicles were between $15,000 and $20,000 with miles ranging from 70,000 to 30,000. The S 10 has just over 75,200 miles, as previously noted, the S 10 has been driven about 5,000 miles on average the last several years. For comparison, the 2010 Prius II discussed at the November 10 City Council was quoted at $25,527.05 (includes tax and title). Repurposing a Public Works Vehicle Instead of purchasing a new vehicle to replace the Chevrolet S 10, the City Council requested staff to review the vehicle replacement schedule for the Public Works Department to determine if one of the vehicles that is scheduled for replacement could be repurposed for use at City Hall. The general idea is to extend the life of a Public Works vehicle that would have otherwise been sold or traded when it is replaced in the Public Works Department. Given the heavy use of vehicles in Public Works, repurposing the vehicle for lighter duty at City Hall prior to significant deterioration in the vehicle's condition could significantly extend the life of the vehicle. The City's current fleet of vehicles includes five regular size pick-up trucks: • 2000 Chevrolet one -ton pickup with lifting crane (118,576 miles) • 2002 Ford F-250 with plow (72,449 miles) • 2004 Ford F-250 (60,391 miles) • 2006 Ford F-350 with diesel engine, 4 doors, short box, power tailgate (38,777 miles) • 2008 Ford F-350 with plow and power tailgate (7,570 miles) Each of these vehicles, on average, accumulates 12,000 miles per year compared to about 5,000 miles per year for vehicles at City Hall. While there is some variation depending on the pickup truck, a Public Works pickup truck will typically have a useful life of around 100,000 to 110,000 miles under normal use conditions. This milestone is typically reached in about ten years, and the draft 2010-2014 Capital Improvement Plan (CIP) includes a potential replacement schedule that coincides with that lifecycle. The vehicle replacement schedule in the draft (CIP) is not set in stone, and the vehicles are evaluated on a regular basis to ensure that the City is getting the best possible use out of each vehicle before it is recommended for replacement. Page 2 of 4 C:Oocuments and Settings lbecky.brazyslocal SettingslTemporary Internet Files1OLK15F1121409 - CC Memo - S10 Replacement. doc During the recent CIP discussion, staff proposed replacing the 2000 Chevrolet one -ton pick-up truck in 2010 with a larger truck (likely an F-350 type vehicle to better handle the attached lifting crane). The 2000 Chevrolet has nearly 117,600 miles on it, and is not recommended as the repurpose vehicle due to the number of miles currently and the interior of the truck needs repairs. Instead of the 2000 Chevrolet, Staff proposes the 2004 Ford F-250 that has 60,391 miles to replace the S 10. This truck is a basic pick-up truck without a power tailgate or snow plow. This repurposing plan would extend the life of the 2004 vehicle due to the lighter use at City Hall. By repurposing a vehicle to City Hall, the Public Works Department will need to purchase a replacement. The replacement vehicle and related equipment is available on the State of Minnesota Purchasing Contract. Costs for the replacement truck are as follows: 2010 (F-350 Pick-up): Boyer Ford $24,620.00 Power lift tailgate: Truck Utilities $ 2,522.25 Cab protector rack and safety lighting: Truck Utilities $ 908.44 Paint to match current fleet $ 1,243.83 Total Estimated Costs $29,294.52 Cost estimates do not include tax, license, and registration costs. The 2009 CIP included $28,000 to replace the Chevrolet S 10, which would be applied toward the proposed Ford F-350 replacement vehicle. The initial expense is higher than the S 10 budget; however, the repurposing of the 2004 F-250 would extend its useful life, thereby saving costs over time. For example, the 2004 Ford F-250 has 60,391 miles. If used entirely in Public Works, the vehicle is likely to last another four years. If repurposed to City Hall, it may last another six or seven years. In the future as a truck nears the end of its useful life at Public Works but still is functional and has value, it would be moved to City Hall. The uses at City Hall are lighter, hence the truck would last a longer period of time. The current draft CIP proposes to replace the 2004 Ford F-250 in 2014. Due to the lighter use at City Hall, the 2004 Ford F-250 useful life could be extended to 2016 or 2017 instead of being replaced in 2014 as the draft CIP proposes. At the end of the useful life of the 2004 Ford F-250 at City Hall, one of the other existing pick-ups could be repurposed to City Hall and replaced in Public Works or another option could be considered at that time. In summary, this proposal would include a pickup truck purchase now. However, the potential replacement of the 2004 Ford F-250 in 2014 is anticipated to be moved back because the lighter use at City Hall would extend the life of that truck. Extending the useful lives of the pickup truck fleet should result in cost savings, since the City is not purchasing a replacement vehicle as often. In addition to cost -savings, another long-term benefit is that there would be an extra full sized vehicle available for emergency use by the Public Works staff at City Hall. Due to the condition of the S 10, Staff suggests moving forward with the replacement truck purchase for Public Works as soon as possible so that the 2004 F-250 can be moved to City Hall. Page 3 of 4 C:IDocuments and Settingslbecky.brazyslLocal SettingslTemporary Internet FileslOLK15PI21409 - CC Memo - S10 Replacement. doc S I 0 Sale If the City moves forward with replacing the S 10 with one of the alternatives, the City would not need to retain the S 10. Local governments can participate in the State of Minnesota Surplus auction at the MnDOT facility in Arden Hills. The next live auction is not until March 2010; however, the online auction operates all year. For items that sell for less than $500, they charge a $50 commission. For items between $500 and $4,000, they charge a ten percent commission of the sale price. The S 10 could be placed on the auction as soon as the new vehicle arrives. Council Action Requested Motion to authorize the purchase of a 2010 Ford F-350 from Boyer Ford and related equipment from Truck Utilities inc. for an amount not to exceed $29,294.52 plus tax, license, and registration; to enable repurposing a current Public Works vehicle to replace the Chevrolet S 10 pick-up currently used for building inspections, code enforcement, and other related activities. Page 4 of 4 C:IDocuments and SettingsWecky.brazyslLocal SettingslTemporary Internet Files1OLK15FU21409 - CC Memo - S10 Replacement. doc