4.d) Staff Report-Purchase and Financing of Dump Truck with a Plow /�� * �
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SCANDIA
Staff Renort
Date of Meeting: Apri19,2013
To: City Council
From: Kristina Handt,Administrator
Re: Discuss Purchase and Financing of Dump Truck with a Plow
Agenda Item#: 4.d)
Background:
Per the 2013-2017 Capital Improvement Program,the purchase of a third dump truck with plow to
improve the speed of snow removal is planned for 2014. The plan also identifies the debt service
fund as the funding source.
Since interest rates are expected to rise, staff is asking the Council to consider adding this to the bond
for the fire engine. Minimal savings will also be realized in bond issuance costs by combining the
two. Issuing the bonds this year will still allow the City to purchase the truck in 2014 as originally
planned. Bond proceeds must be spent within three years of the City receiving them. There would
just be the interest payment in December 2013. Bond proceeds could be invested until used for the
purchase of the dump truck.
Issue:
Should the Council bond for the replacement Dump Truck with a Plow at the same time as the
bond for the new fire engine?
Proposal Details:
The CIP estimates the cost of a new dump truck with a plow at$200,000. Specific quotes have
not been obtained at this point but staff feels that amount is adequate. This new truck would
replace the 1997 Ford 8000 Dump Truck with Plow. Staff sees no reason to retain the 1997 Ford
once a new dump truck is purchased. The funds from the sale of the 1997 Ford truck could be
applied to the purchase of the new truck or deposited into the Equipment Replacement Fund.
This truck is important to the speed of snow removal in that it allows the maintenance staffto
operate three plow routes. This was the first year the City had three routes, as opposed to two,
and the Council should discuss whether or not they felt the third route improved snow removal
conditions. In most cases, all city streets were cleared within 4-6 hours of the end of the snow
event.
Additionally, having the third reliable truck is important in case one of the other two breaks
down and is out of service for some time. In that case, would the Council feel comfortable
having only one dump truck with a plow to clear all City streets?
Fiscal Impact:
As mentioned in the previous agenda item, by applying fund balance to the 2005 G.O. Bond,the
City is able to bond for additional equipment without increasing the levy. The draft schedule of
payments that includes the fire truck and dump truck was prepared by Northland Securities and
is included in your packet.
Also included on the schedule is a tax impact analysis. However,this does not take into account
pre-paying the 2005 G.O. Bond with current fund balance as previously discussed.
Options:
1) Direct staff to prepare the resolution and other documents to bond for the entire dump
truck with plow purchase. This would not include a reimbursing resolution.
2) Direct staff to prepare the resolution and other documents to bond for an amount less than
$200,000 for the dump truck with plow with the remainder coming from the Equipment
Replacement Fund.
Recommendation:
Option 1.