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HomeMy WebLinkAboutResolution 4437, amending the Fiscal Year 2013 budget for purchase of an aerial platform truck Commission Memorandum REPORT TO: Honorable Mayor and City Commission FROM: Chris Kukulski, City Manager Anna Rosenberry, Administrative Services Director Jason Shrauger, Fire Chief SUBJECT: Resolution No. 4437 - Amending Fiscal Year 2013 (FY13) General Fund Budget for purchase of 100’ Mid-mount Aerial Platform Truck.. MEETING DATE: May 6, 2013 AGENDA ITEM TYPE: Consent Item RECOMMENDATION: Resolution No. 4437 - Amending Fiscal Year 2013 (FY13) Fire Capital & Equipment Replacement Fund Budget for purchase of 100’ Mid-mount Aerial Platform Truck. SUGGESTED MOTION: Motion to approve Resolution No. 4437 BACKGROUND: Since the adoption of the FY2013 Approved Budget in late June, an item has arisen that requires amendment of the appropriations budget. Authorizing expenditure of $839,458.25 from the Fire Department Capital & Equipment Replacement Fund in Fiscal Year 2013. This amendment is necessary because it is a significant amount that was not specifically authorized in the FY2013 budget. This piece of equipment was currently scheduled in the Capital Improvement Plan to be budgeted and purchased in Fiscal Year 2014. We anticipated that it would take up to 16 months to build a replacement apparatus. The anticipated time frame was based on discussions with several different vendors as well as common industry turnaround times. The City Manager authorized the Department to proceed with specifications and bidding prior to the beginning of Fiscal Year 2014 (FY 14) in an effort to order a few months early so we could take delivery before the end of the 2014 fiscal year. In order to begin construction of the truck, the vendor requires an initial payment. This budget amendment is for the down payment that will occur in the current FY13 budget. The final 112 payment, due after delivery and acceptance, will occur in the FY14 budget. This piece of equipment is fully funded out of the Fire Capital & Equipment Replacement Fund. The bid contained several different options for prepayment to assist in decreasing the overall cost associated with this apparatus. A minimum of 25% down is required to place the order with options for 50%, 75% and 100% each with a slightly increasing discount. Down Payment Down Payment Amount Total Discount Final Price 25% $279,819 $10,134 $1,119,277 50% $559,638 $19,578 $1,109,833 75% $839,458 $29,022 $1,100,389 100% $1,119,277 $38,466 $1,090,945 The discount in purchase price for a 75% Down Payment for the 10 month construction period is equal to an annual interest rate of 4.15%. By comparison, we’ll be earning approximately 1% in interest earnings to hold the money in our own accounts during that time. Given our positive vendor relationship with Sutphen (our last two engine purchases were without problems), and the value of making the down payment, we are comfortable with the 75% option. We would still be holding $261,380 for final payment, giving the supplier incentive to complete the transaction in a satisfactory manner. UNRESOLVED ISSUES: None at this time. ALTERNATIVES: 1. We could not award the bid – thus requiring no Budget Amendment; 2. Or, a lesser amount of down payment could be made, adjusting the amount of this Budget Amendment. 3. We could pay for the truck in full, requiring a larger budget amendment. FISCAL EFFECTS: The City’s Fire Capital & Equipment Replacement Fund was designed to provide the funds to replace these types of critical, large, fire apparatus. The City’s single ladder truck is our single largest, most expensive piece of fire equipment. 187 - Fire Capital & Equipment Replacement Fund Current Balance, April 2013: $ 769,854 Plus: Estimated May 2013 Taxes (Received in June): $ 154,000 Available Resources: $ 923,854 Less: Ladder Truck Payment #1 $ (839,458) Estimated Ending Balance FY13 $ 84,396 We anticipated budgeting a total of $1.2 million for the purchase of the truck and associated equipment in FY14. With this down payment budget amendment in FY13, we would only budget for the final payment and equipment costs in FY14 (approx $360,000.) Attachments: Resolution No. 4437 113 - 1 - COMMISSION RESOLUTION NO. 4437 A RESOLUTION OF THE CITY COMMISSION OF THE CITY OF BOZEMAN, MONTANA, AMENDING FISCAL YEAR 2013 (FY13) FIRE CAPITAL AND EQUIPMENT REPLACEMENT FUND BUDGET FOR PURCHASE OF 100’ MIDMOUNT AERIAL LADDER TRUCK. WHEREAS, the City Commission did, on the 25th day of June, 2012, after due and proper legal notice, conduct a public hearing on and adopt Resolution No. 4383 - APPROPRIATING FUNDS FOR VARIOUS BUDGET UNITS, AND FURTHER ESTIMATING REVENUE NECESSARY TO OPERATE AND MAINTAIN SERVICES OF MUNICIPAL GOVERNMENT FOR THE FISCAL YEAR ENDING JUNE 30, 2013; and WHEREAS, on February 26, 2013 the City of Bozeman posted an invitation to bid for a 100’ Mid-mount Aerial Platform; and WHEREAS, on April 2, 2013, the City of Bozeman opened bids for a 100’ Mid-mount Aerial Platform; and WHEREAS, the City of Bozeman intends to award a contract to Sutphen Corporation to build said truck; and WHEREAS, the City Commission did, on the 6th day of May, 2013, after due and proper legal notice, conduct a public hearing on the proposed budget amendment. NOW, THEREFORE, BE IT RESOLVED by the City Commission of the City of Bozeman, Montana, to wit: 115 - 2 - Section 1 – Appropriation Additions The City Commission of the City of Bozeman, Montana, does hereby authorize additional expenditures for the Fiscal Year 2013 in the following funds and amounts: Fire Capital & Equipment Replacement Fund (Fund 187): Down Payment - 100’ Mid-mount Aerial Platform $839,458 GRAND TOTAL – Additional Appropriations $ 839,458 Section 2 Pursuant to Section 7-6-4030, M.C.A., this resolution, upon its passage, shall be in full force and effect on July 1, 2012. Section 3 That should it be found by any court of competent jurisdiction that any section, clause, portion, sentence, word, or phrase of this resolution is deemed to be contrary to any existing law or regulations, that in this instance, it is the intent of the City Commission of the City of Bozeman, Montana, that all other portions, sections, words, clauses, phrases, or paragraphs of this document shall remain in full force and effect. PASSED AND APPROVED by the City Commission of the City of Bozeman, Montana, at a regular session thereof held on the 6th day of May, 2013. ________________________________________ SEAN BECKER Mayor ATTEST: _____________________________________ STACY ULMEN, CMC City Clerk APPROVED AS TO FORM: ________________________________________ GREG SULLIVAN City Attorney 116