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04-24-86 Finance Comm MinutesApril 24, 1986 PUBLIC WORKS/FINANCE COMMITTEES 3:00 P.M. • Chairmen Ruiz and Palmer and Councilmen Schindler and Saverud in attendance. Mayor Kennedy, DPW Hammer, Chief Stefanic, Roger Bowman, Mike Fraser, Dick Ostheller from Caterpillar, Dirk Kenfield and Jeff Wallace from John Deere, Dave Melrose, and Roger Hopkins of the Daily Inter Lake also present. STREET LIGHT REQUEST/PARK NEAR PETERSON SCHOOL - The Committee read the request and recommendation for lights in this area and approved the installation. AGGREGATE BID - DPW Hammer indicated that he had checked out the pit run available from Pack and Company and could see no problem. He stated that the City can refuse any aggregate not meeting the specifications. The Committee approved awarding of the bid to Pack and Company. 5TH AVENUE WEST BID, PHASE II - Mike Fraser from Thomas, Dean and Hoskins stated that they had reviewed the bids, all were in order, and they recommended awarding the bid to Pack and Company, the low bidder. There was a question concerning some differences in materials. This will be reviewed and will result in a lower materials cost. City Attorney recommended awarding the contract and then negotiating the changes. The Committee approved awarding the bid to Pack and Company. FRONT END LOADER BID - ➢PW Hammer stated that his initial reaction was to award the bid to the low bidder, but then, because it was such an expensive piece of equipment, he decided they should take a closer look. There was a demonstration in Lawrence Park between the John Deere and the Caterpillar attended by the Mayor, Public Works, operators and representatives of both companies. The equipment was reviewed and researched thoroughly. There is a difference of about $7,300 between low and high bid. Information sheets for both machines were provided to the Committee. DPW Hammer stated that both. he and his operators felt after researching the matter that although the John Deere appeared the low bid, if taken over a ten or fifteen year period the Caterpillar was actually lower. Factors included were maintenance, fuel consumption, etc. John Deere did not meet all specifications: they have only two reverse gears instead of four as requested, and 12 volt rather than 24 volt. DPW Hammer said that working in City streets is different than working in other areas and the articulation is important - the Cat rear wheels follow the front wheels, the John Deere's do not track that closely. The door cannot be opened on the John Deere when the wheels are turned. He also stated that considering all the Caterpillar equipment the City has the life span is approximately 26 years of service per machine - the long term should far outweigh the $7,300 difference in the bids. The Public Works staff recommended the Caterpillar . over the John Deere. He invited the representatives of both companies to make comments. There were some specific questions and answers concerning manueverability, fuel consumption (John Deere was almost double that of Caterpillar), and routine maintenance. Dirk Kenfield, manager of John Deere, stated that whatever the City would hear about equipment was biased by the dealer. About a year ago • they bid a road grader to the City and were high bidder by $703 and there was never a question asked and it was awarded to Caterpillar. Now the City is talking about $7,300 on the new model, and on the demonstrator over $14,000 and there seems to be a problem - and he stated he didn't understand that. He felt the City would never make up the $7,300. Servicing, whether John Deere, Caterpillar, Case or whatever depends on the shop and operators. PUBLIC WORKS/FINANCE COMMITTEE April 24, 1986 • Page 2 The bid did not call for anything about fuel consumption, how long the City was going to keep the machine, etc. They met all of the specs except two of the minor ones, which really had nothing to do with the production of the machine, and are lower by $7,300. If the City is not going to buy the lower bid that is responsible, why bid? DPW Hammer again pointed out that looking at a 10 or 15 year period . . . Mr. Kenfield responded that it was not asked for in the bid. C. Palmer stated that he would like to clear the air - and that the Committee had not finished hearing Mr. Hammer's recommendation, to which Mr. Kenfield replied that Mr. Hammer had recommended the Caterpillar. DPW Hammer explained that the City was to accept the lowest responsible bid, and that responsible did not mean how long a company had been in business but rather what they felt was in the best interests of the City taxpayers. He added that while $7,300 today is a lower bid it does not mean that over a 10-15-20 year period it is going to be a lower cost. He mentioned daily operations required. DPW Hammer also mentioned resale value and depreciation values. The operator in the demonstration was an employee from McElroy and Wilkin who took time off from work for the demonstration, and he took the time to explain the benefits of the Caterpillar after having operated Both machines. Mr. Hammer stated that Caterpillar equipment was probably 9 to 1 for construction, the box frame on the Cat appears to be more durable, and the preterence of the operators was for Caterpillar. C. Schindler pointed out that if you go out through the Mid -west you will see more John Deere and Mr. Hammer responded that they are both good pieces of equipment, and he would be happy with either one, but after spending considerable amount of time on this and looking at the long run he had to recommend the Caterpillar. Mr. Kenfield stated that there were two schools of thought concerning servicing - one, you can have things serviced so that they don't break down, or two, you can not service them to save time - it will cost money either way, either on a regular basis or in lump sum for major repairs. C. Ruiz asked about the difference in transmissions. Mr. Hammer explained that with only two gears the engine must be revved up in order to get the power needed, where with lowerr.gears this was not necessary. Mr. Kenfield felt that City operators would.be backing up and down streets and alleys at more than 8 MPH, and if they were he didn't want his children around. He said it all boiled down to the fact that they feel they are a responsible bid and it is just conjecture as to whether a machine would be cheaper in the long run. DPW Hammer gave as an example of 1500 hours: If you have an automobile that puts in 1500 hours at 50 MPH that is 75,000 miles in one year. That is alot of driving. Most operators when putting in that amount of time would choose the machine they felt best. Over a ten year period that 750,000. _This -piece of equipment will be used for leaf pick-up, snow removal, reconstruction more than any other piece of equipment. Mr. Hammer stated that he had to stick with his recommendation. Mr. Kenfield stated again that the City would never get back the $7,300 - not in servicing, fuel consumption or any other way. He said he was a taxpayer and that made him mad. DPW Hammer said that • if he wanted to look at it that way the John Deere did not totally meet the specifications, to which Mr. Kenfield replied that the specs were written for the Caterpillar. Mr. Hammer said he tried to keep them as general as possible, the only exception this time being keeping the service within a 50 mile radius. There are other machines that meet these specifications. PUBLIC WORKS/FINANCE COMMITTEE April 24, 1986 Page 3 C. Palmer voiced a concern regarding the City not taking the low bid, the bidding process itself, and the factors used to make choices. He pointed out that for the first time to his knowledge the City chose the high bid on the garbage containers, and now a week later there is talk again of not going with the low bidder. He stated that given a choice he would drive a vehicle better than the one he had, and he couldn't blame the operators for prefering the "cadillac" of the business, but he was concerned about what other munici- palities were doing when faced with a situation like this. DPW Hammer pointed out that Caterpillar could raise an objection if John Deere was given the bid because John Deere did not meet the specifications. The City's history with Caterpillars is excellent. C. Palmer said Why bid? DPW Hammer responded to obtain the lowest responsible bid. The City could, if it wanted just Caterpillar, write the specifications to reflect only Caterpillar and ask several dealers to bid only Caterpillars. C. Palmer and C. Schindler both voiced appreciation for the amount of time the staff had invested in researching the information provided. C. Schindler said he understood what was said about long-range savings, but with economics what they were he felt the City had to save when it could. DPW Hammer pointed out that the City looks at long-range planning for streets and sewer and water and other things, and they need to do that with equipment also. He had asked for a sheet from both John Deere and Cater- pillar showing a ten year breakdown on maintenance costs. John Deere did not provide this. Since there seemed to be some confusion over this issue he asked the Committee if he could make this request again and let the Committee compare these long-range costs (lubrication, fuel, manhours for maintenance, etc.) The Committee agreed that this would be acceptable. They also requested that DPW Hammer look into other municipalities response to John Deere equipment, and check with the City Attorney regarding the City's position on bids not meeting specifications. (A meeting was later set for Thursday, May 1 at 3:00 P.M. to further consider this bid.) Council Palmer had to leave the meeting. ABANDONMENT OF A PORTION OF FIRST ALLEY WEST - The bank will be building across the present alley. The trunkline will begin approximately behind Western Outdoor so utilities will be no problem. Garbage collection and fire protection are no problem. Abandoning this portion of the alley would solve some traffic problems on Center for the City. The Committee agreed to recommend approval of this abandonment to the Council. A site plan and legal description will be provided for the Council. There was some discussion about the affect this would have on parking and what changes would be made in the lot to accomodate the change in traffic pattern in the lot. There could be a problem with a left turn for southbound traffic entering the lot from lst Avenue West - the present entrance may have to be used for exit only to solve that problem. MERIDIAN SITE PLAN - The staff comments were presented and the Committee added that if a right -turn lane is needed for this development it should be is planned for now before Meridian is redone, and with the mini -mall concept presented the developer should be encouraged to look at other available empty spaces elsewhere in town rather than building additional spaces. PUBLIC WORKS/FINANCE COMMITTEE April 24, 1986 Page 4 WOODLAND SITE PLAN - The staff comments on this development were also presented. There was discussion of the possible extension of 7th Avenue East North and how that could become a truck by-pass, and whatsteps could be taken to prevent that. Concern was voiced that Hwy. 2 and 7th Avenue East North would become another Main and Center. One-way routing was considered a possibility for solving some of the problems forseen. The Committee agreed with the staff comments and also added that garbage collection access would be a problem, as well as the impact on Woodland Park if multiple dwellings allowing children were allowed. DPW Hammer explained that he wanted the Committee to be aware of these proposed developments at this time because of the potential problems he could see in the future. ajg