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05-01-86 Finance Comm MinutesMay 1, 1986 PUBLIC WORKS/FINANCE COMMITTEES 3:00 P.M. Chairmen Ruiz and Palmer and Councilman Schindler in attendance. Mayor Kennedy, DPW Hammer, Surveyor Zavodny, Garry Overn, Dennis Schwenk from Long Machinery, Jeff Wallace and Dirk Kenfield from Davies, Howard Hurst, Dave Melrose, and Roger Hopkins of the Daily Inter Lake also present. FRONT END LOADER BIDS - The Committee took a few moments to read the packet of information handed out which included a recommendation from DPW Hammer, memo from Attorney Neier, and information from both Davies and Long Machinery concerning their particular products. Both companies were invited to give a short presentation of their position and product. Dirk Kenfield from Davies stated that basically his contention was that the two minor items on which they did not meet specifications, the reverse gears and the electrical, and the dollar difference, they felt that the John Deere was the cheaper buy. If the City considers Caterpillar's supposition that they are going to be cheaper because they are going to be servicing every 3000 hours the City won't make that dollar difference up in twenty years. If you take, according to the Caterpillar salesman, the higher cost of operating and the higher fuel costs to be ekperienced you will more than make up for the service dollar difference. So our basic premise is that you have to buy the John Deere. It's cheaper, within the specifications except for two minor things, and there wasn't anybody else that could bid, so John Deere feels they were within the perameters of the specifications, and for $7,300 difference you're getting a quality machine that will certainly hold up over a long period of time. When asked what percentage of parts were available locally Mr. Kenfield stated that he wasn't sure for that machine but in general the figure was 70 - 75%. The rest of the parts come out of Portland, who stocks 95i+ on all equipment. That includes alot of old John Deere farm equipment. C. Palmer asked about the comment that no one else could have bid, and the response was that they could have bid but could not have met specifications. Then he added that only four companies could have bid - Fiat, Case, John Deere, and Caterpillar because of the mileage restrictions. When asked why Case had not bid it was determined that the invitation to bid had not been sent' because of an oversight, and when they had seen the ad in the newspaper they had not responded quickly enough. C. Ruiz asked DPW Hammer if he had called owners of John Deere loaders for opinions. He responded that he had attempted but had not had a response. C. Schindler stated he had called several, who said they were very happy, one just stating he had no problems. Denis Schwenk from Long Machinery gave an overhead projection presentation of the material provided in the handout at the beginning of the meeting (attached) showing detailed comparison of John Deere and Caterpillar loaders in the areas of individuals to contact to discuss Caterpillar vs. John Deere, fuel consumption based on S.A.E. rating using specific temperature, altitude, and fuel, tire replacement cost, maintenance costs, repair reserve, replacement costs, auction values, downtime/maintenance, and initial price. He then went on to discuss briefly the advantages of exchange components for various Caterpillar machinery owned by the City, pointed out that oil and fuel filters are the same for all City -owned Caterpillar equipment, and lubricant commonality. C. Schindler asked about replacement parts and the response from Mr. Schwenk was that Caterpillar parts prices are the same all over, while John Deereprices vary between dealers. DPW Hammer said he had spoken with Gary Stempin at the County landfill who told him the price of Caterpillar parts PUBLIC WORKS/FINANCE COM1,11TTEES May 1, 1986 Page 2 is decreasing. DPW Hammer asked what percentage of parts are carried locally by Caterpillar. Mr. Schwenk said 829, locally with 99% overnight from the Spokane emergency depot. DPW Hammer commented on his memo (attached) and pointed out that the difference in fuel costs alone using $1.25/gallon amounted to $15,000 over a ten year period. Secondly, the 930 Caterpillar front end loader the City recently purchased was in really good shape and would be around for a long time, and parts are interchangeable. Thirdly, the argument that the maintenance and operations costs were not specifically asked for in the bid specifications so therefore should not be considered was not valid because the Council had previously asked for in the specifications and otherwise on other pieces of equipment. Acting Street Superintendent Garry Overn pointed out the advantage of better control over the boom and bucket with the dual controls of the Caterpillar in working in close quarters on City streets. C. Palmer asked about the problem on the John Deere of the door not opening when the wheels are turned, and Mr. Overn said that it would usually be parked straight but this can be a problem if the machine is articulated. It was pointed out that there is an exit through the window if the door cannot be opened. C. Palmer refered to Attorney Neier's memo on Competitive Bidding and Awarding of Contracts (attached) and asked if it addressed the way bids are called for and the specifications and it was pointed out that this was addressed in the last paragraph. The memo also stated that the reasons for a decision by the Committee should be set forth in the minutes. C. Ruiz debated whether fuel costs, resale value, etc. should be considered in making a decision. DPW Hammer pointed out that the County includes these costs in their decisions concerning equipment purchases. C. Schindler questioned the validity of fuel costs unless they were based on an actual trial with the actual equipment in question. The question was raised if the City had had any trouble with the John Deere backhoe. There has been no problem, and it was added that the John Deere backhoe is considered the best equipment for the money, but for front- end loaders for industrial use the Caterpillar is a better machine. C. Schindler moved that the City accept the low bid of John Deere for the articulated front-end loader. C. Palmer seconded in order to get it on the floor. C. Palmer said he was concerned about the importance of the 24 volt system for starting reliability in cold weather and stated that adding other input and staff input he would vote against the motion. C. Schindler responded that Glacier Park had had no trouble with starting problems with the 12 volt John Deere. C. Palmer said there was an engineering problem when a door won't open and said he didn't like the "what if's" of that situation. Howard Hurst pointed out that historically this same decision has been made over and over again through the bidding process, for the same reasons discussed at this meeting, and over and over the Caterpillar is purchased even though it was high bid because of the investment in quality. PUBLIC WORKS/FINANCE COMMITTEES May 1, 1986 Page 3 C. Palmer pointed out the fact of better control in tight situations. Mayor Kennedy said he felt it important to take the recommendation of his staff and he seconded C. Palmer's statements - he would stand with his staff and department head in preference to the Caterpillar. C. Ruiz stated that as president of the Council he represented the entire Council and he had a problem with setting a precedent in the bidding process by deciding on things not included in the bid (as the 10-year projection of costs). He also stated he had a problem with DPW Hammer notcalling owners of the two different pieces of equipment to poll them. DPW Hammer responded that the bidding process had been done correctly both by his office and the City Attorney, and stated his concern that the Council would automatically take the low bid without regard to their responsi- bility to the taxpayers. C. Palmer stated that C. Ruiz should follow the Attorney's advice and give reasons for waiving the specifications. C. Ruiz responded that the 12 volt system performed as well as the 24 volt and that City personnel said that the extra reverse gears are not that important to performance. The vote was to award the bid to John Deere with C. Ruiz and Schindler voting for and C. Palmer voting against. The question of tracking came up and C. Palmer asked Jeff Wallace if the John Deere tracked, and Mr. Wallace replied that yes, it did, he had taken it out in the field and driven it around himself. Others in the room disagreed with that statement. ajg *The DPW Hammer memo, Attorney Neier's memo and the comparison material on the John Deere and Caterpillar equipment are on file in the Public Works Department and included with the original minutes of this meeting. •