2018-11-28 CC Packet - Laserfiche WebLink

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r 1,110M ,C ;ld..,M✓�so3e Wow ": .�eaGBiS a a9 Au4."'�✓' 6-51-429-3232,,r�c51a9-scz9 Memorandum Date: November 28, 2018 To: Honorable Mayor and City Council Members Through: Mark R. Statz, City Administrator/City Engineer Paul Palzer, Public Works Director/Chief Building Official From: Bruce DeJong, Finance Director Item: Vehicle Plan Discussion The Capital Improvement Plan discussed the replacement of certain vehicles with the City Council at a previous meeting. What seemed to be missing from the discussion was a reliable estimate of the cost to the city for having vehicles through various replacement cycles. Staff is attempting to provide more information to the City Council to assist in determining a reasonable replacement cycle for pickups. Staff has had a difficult time getting historical information from the State Cooperative Purchasing Venture (CPV) program that we purchase vehicles through. In lieu of actual bid summaries, I am using the historical data that we have available and extrapolating that for years that are unavailable. The CPV program allows Minnesota local government agencies to take advantage of the state bid pricing based on high volume purchases. This is key because we are able to purchase pickups well below regular dealer pricing. A single purchase by us on the open market would be substantially higher than the pricing through this program. In November, 2014 we purchased a 2015 Chevrolet 2500HD Double Cab 4WD work truck. This is the basic model available on the state bid. The historical cost of that pickup on our fixed asset inventory was $30,607. Following accounting principles, that amount should include all the additions necessary to put the vehicle in service. Public Works Director Palzer has estimated those costs to be currently about $2,500. The current price of a similar 2019 vehicle is approximately $29,945. With the addition of $2,500 the cost to put a new vehicle in service would be $32,445. This is approximately a 2%increase per year from 2015 model year to 2019 model year pickups. 2