2018-11-28 CC Packet - Laserfiche WebLink

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An analysis of purchase price versus sale price is shown below. It is important to note that staff has estimated the sale price at the low value for vehicles in"good" condition. The vehicles may well be in better condition or sell higher in the range when the time comes to trade up to a new vehicle. Vehicle Vehicle Year Chevrolet 2500 HD - 4DR 4WD 2015 2016 2017 2018 Estimated Mileage 21,000 16,000 11,000 6,000 Estimated Purchase Price $30,607 $31,219 $31,843 $32,445 Kelley Blue Book Private Party Low Sale Price $25,117 $29,255 $31,119 $34,627 Total Ownership Cost $5,490 $1,964 724 (, Years Owned 4 3 2 1 Cost of Ownership per Year $1,373 $655 $362 $2 i 82 It is clear that the longer we keep a vehicle the higher the cost of ownership becomes. The cost goes up particularly fast after the vehicle goes out of warranty. This does not figure in any additional costs that may occur when the vehicle goes out of warranty. We presented a two year replacement cycle for pickups in the CIP. The format of the presentation includes an estimated the sale value of the existing older pickups at$2,000 for each of the Ford Ranger pickups and $8,000 for the 2005 Chevrolet and 2008 Ford pickups. This results in a $10,000 Salvage Value/Trade-In for 2019 and 2020. After that, we also replace the 2015 Chevrolet and put it into a two year rotation. We have estimated that value at half the original cost for a salvage value of$15,000. The Public Works Director's program of two year replacement allows us to sell a low mileage vehicle with one year of remaining factory warranty estimated as selling for $1,000 less than their original cost off the state bid. Chevrolet has recently announced a factory extended warranty that would allow purchasers to raise the coverage to 5 years/60,000 miles up from the base level of 3 years/30,000 miles. We don't know the cost but it could make a four-year replacement cycle less costly. Staff is asking City Council members to consider the implications of this analysis in determining the type of pickups to purchase, the number of pickups to have available given that we hire seasonal employees, and the replacement cycle. Please give us feedback so we can refine the plan and funding process. Please remember that we haven't included any analysis of condition, safety, or other indicators of the equipment at this time. 3