R-1834 - 11/26/2019 - PUBLIC WORKS - Resolutions ITEM 6.C.1
BOARD OF TRUSTEES MEETING
VILLAGE OF SAMUEL E. DEAN BOARD ROOM
OAK BRq
ikK , BUTLER GOVERNMENT CENTER
1200 OAK BROOK ROAD
OAK BROOK, ILLINOIS
630-368-5000
AGENDA ITEM
Regular Board of Trustees Meeting
of
November 26th, 2019
SUBJECT: Award of Contract—John Deere Lease Agreement
FROM: Doug Patchin, Public Works Director i
Rick Valent, Public Works Superintendent �(T'
BUDGET SOURCE/BUDGET IMPACT: $129,310 is budgeted in Equipment
Replacement(342-90200) for the lease of these items.
RECOMMENDED MOTION: I move that the Village Board waive further bidding since
Sourcewell has already conducted the bid process for John Deere Construction Equipment
(Cooperative Contract#032515-JDC) and award a three-year lease agreement with Deere
Credit, Inc. for a new 2019 John Deere backhoe and 2020 John Deere excavator, and
approve Resolution R-1834.
Background/History:
Public Works construction equipment has traditionally been purchased and not leased.
When reviewing the age, usage hours, and repair costs of existing equipment then
comparing that to the residual value, leasing becomes a viable option for consideration.
The Department's construction equipment fleet is predominantly comprised of John Deere
which is available through Sourcewell.
Staff reviewed its operations and feels comfortable in reducing the Department's
equipment inventory by one by trading-in units 511 and 611, both being a 2003 and 2012
John Deere backhoe, and unit 613, a 2007 Yanmar excavator. These in turn will be
replaced by a 2019 John Deere backhoe and a 2020 John Deere excavator. Excavating
attachments (bucket, breakers, etc.) will also be purchased to accommodate the new
construction equipment.
BOT AGENDA Page 1
RG
Below is a breakdown of purchase versus lease versus lease/purchase.
2020 2021 2022 2023 2024 2025 2026 2027 2028 2029
Buy
Net Purchase 41OLand 50G $]54,379 $ - $ - $ - $ - $ - $ - $ - $ - $ -
Less Estimated Accumulated Cash (175,000) - - - - - - - - -
5-Year Warranty 7,821 - - - - - - - -
4-Year Maintenance Package 23,256 - - - - - - - - -
410L Backhoe Loader Replacement Charges 17,603 17,603 17,603 17,603 17,603 17,603 17,603 17,603 17,603 17,603
50G Excavator Replacement Charges 9,826 9,826 9,826 9,826 9,826 9,826 9,826 9,826 9,826 9,826
Annual In-House/Contracted Maintenance - - - - 6,000 6,180 6,365 6,556 6,753 6,956
Estimated Miscellaneous Consumables 500 930 1,200 5,330 1,300 1,630 500 5,430 1,200 530
Total Purchase Charges $ 38,384 $ 28,358 $ 28,628 $ 32,758 $ 34,728 $ 35,238 $ 34,294 $ 39,415 $ 35,382 $ 34,914
Lease
Less Estimated Accumulated Cash $(17,500) $(17,500) $(17,500) $(17,500) $(17,500) $(17,500) $(17,500) $(17,500) $(17,500) $(17,500)
410LBackhoe Loader Annual Lease Cost 21,395 21,395 21,395 21,500 21,500 21,500 21,750 21,750 21,750 32,500
50G Excavator Annual Lease Cost 16,098 16,098 16,098 16,200 16,200 16,200 16,300 16,300 16,300 20,000
Total Annual Lease Charges $ 19,994 $ 19,994 $ 19,994 $ 20,200 $ 20,200 $ 20,200 $ 20,550 $ 20,550 $ 20,550 $ 35,000
Annual Lease(Savings)/Cost $(18,391) $ (8,365) $ (8,635) $(12,558) $(14,528) $(15,038) $(13,744) $(18,865) $(14,832) $ 86
The Village has an estimated $175,000 of accumulated funds in the Equipment
Replacement Fund related to the purchase or lease of future units 511,611,and 613. Under
the purchase option, these funds would nearly cover the cost to purchase two new
replacement units net of trade-in values, along with five-year warranties and 4-year
preventative replacement plans. Should the Village choose to continue purchasing Public
Works Equipment,we would also begin setting aside funds for the purchase of replacement
equipment in 10 years. Once the four-year preventative maintenance package is up, it's
estimated the Village will spend an average of$6,000 annually to maintain the equipment,
and increasing gradually with inflation each year.
Under the lease option, the accumulated $175,000 would remain in the Equipment
Replacement Fund and will be applied against future lease payments. The trade-in values
of current units 511, 611, and 613 would be spread across the first three lease agreements
(nine total years) in order to keep annual lease costs stable. The Village would expect to
see an increase in lease costs in year 10 as prior trade equity runs out, but at that point, we
would evaluate if leasing is still a viable option for the Village.
There are various assumptions not included in this analysis due to unpredictability, such as
major breakdowns or repairs if we owned older equipment. Should one of these pieces of
equipment suffer a major breakdown,this could result in thousands of dollars in unplanned
repairs. The technical and mechanical advancements in today's equipment is more
complex than in the past and unfortunately those come with a cost. From an operational
perspective, giving staff up-to-date equipment also allows them to take advantage of those
advancements that can improve their day to day functions.
BOT AGENDA Page 2
Recommendation:
I move that the Village Board waive further bidding since Sourcewell has already
conducted the bid process for John Deere Construction Equipment (Cooperative Contract
#032515-JDC) and award a three-year lease agreement with Deere Credit, Inc. for a new
2019 John Deere backhoe and 2020 John Deere excavator,and approve Resolution R-1834.
BOT AGENDA Page 3
THE VILLAGE OF OAK BROOK
COOK AND DUPAGE COUNTIES, ILLINOIS
RESOLUTION
2019-EG-AG-R-1834
A RESOLUTION
APPROVING AND AUTHORIZING
THE FINANCING OF
PUBLIC WORKS EQUIPMENT
GOPAL G. LALMALANI, Village President
CHARLOTTE K. PRUSS, Village Clerk
JOHN BARR
PHILIP CUEVAS
MICHAEL MANZO
MOIN SAWED
EDWARD TIESENGA
ASIF YUSUF
Village Board
Published in pamphlet form by authority of the
President and the Board of Trustees of the Village of Oak Brook
on this the 26th day of November, 2019
RESOLUTION 2019-EG-AG-R-1834
A RESOLUTION
APROVING AND AUTHORIZING
THE FINANCING OF
PUBLIC WORKS EQUIPMENT
WHEREAS, the Village of Oak Brook is a municipal corporation with authority provided
for and granted pursuant to the Illinois Municipal Code to exercise certain powers and perform
certain functions pertaining to its local government and affairs;
WHEREAS, the Village of Oak Brook (hereinafter referred to as "Village") upon approval
of the corporate authorities may enter into an Agreement with another party pursuant to Illinois
Statute;
WHEREAS, the Village desires to lease new equipment to be utilized by the Department
of Public Works for the continued maintenance of the village thoroughfares and streets as a result
of which Sourcewell has solicited bids for the said purchase and financing of a 2019 John Deere
backhoe and a 2020 John Deere excavator(hereinafterreferred to "Public Works Equipment");
WHEREAS, pursuant to Section 1-7-10 of the Village Code, the Village shall have the
authority to join with other units of government in cooperative purchasing plans when the best
interests of the Village will be served by engaging in such cooperative purchasing plans; and
WHEREAS, to the extent the Village were to engage in a competitive bid process to secure
pricing for Public Works Equipment, the Village would be unable to secure pricing at or lower than
the prices secured by Sourcewell; and
WHEREAS, the Village and Sourcewell have identified John Deere Construction
Company and Deere Credit, Inc. as the companies best suited to sell and finance the desired
equipment; and
WHEREAS, the Village of Oak Brook Corporate Authorities feel that it is in the best
interests of the Village of Oak Brook to participate in the cooperative purchasing of Public Works
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Equipment and enter into a lease agreement with Deere Credit, Inc. for the financing of the public
works equipment as provided for herein.
THEREFORE, BE IT RESOLVED by the Village President and Board of Trustees of the
Village of Oak Brook, Cook and DuPage Counties, Illinois as follows:
Section One - Recitals
The Corporate Authorities hereby find that all of the recitals hereinbefore stated as
contained in the preamble to the Resolution are full, true and correct and do hereby, by reference,
incorporate and make them part of this Resolution as legislative findings.
Section Two— Approval of Financing of Public Works Equipment
The Village Board of Trustees hereby approves lease of the public works equipment and
hereby authorizes the Village Manager to negotiate the final terms of the lease of the public works
equipment and is hereby authorized to execute any and all forms and agreements required to the
financing of the identified equipment.
Section Three —Authorization and Direction
The Village Manager is hereby authorized to execute, and the Village Clerk is hereby
authorized to attest the Village Manager's signature, the necessary agreements, contracts and
forms to finance the equipment identified herein with such changes therein as shall be approved
by the Village Attorney and the officials of the Village executing the same, their execution thereof
to constitute exclusive evidence of their approval to any and all changes or revisions therein from
and after the execution and delivery of such Agreements.
Section Four- Other Actions Authorized
The officers, employees and/or agents of the Village shall take all actions necessary or
reasonably required to carry out and give effect to the intent of this resolution and otherwise to
consummate the transactions contemplated herein, and shall take all actions necessary in
conformity therewith including, without limitation, the execution and delivery of all documents
required to be delivered in connection with the transaction contemplated herein.
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Section Five - Authorization of Expenditures
The Corporate Authorities hereby authorize and direct the expenditure of all costs related
to the execution of the Agreement, additionally, the Village is authorized and directed to allocate
and spend all necessary funds to fulfill the requirements of the Agreement and of this resolution.
Section Six—Waiver of Bidding Process
To the extent that any requirement of bidding would be applicable to any of the
transactions contemplated hereunder, the same is hereby waived.
Section Seven - Acts of Village Officials
That all past, present and future acts and doings of the officials of the Village that are in
conformity with the purpose and intent of this resolution are hereby, in all respects, ratified,
approved, authorized and confirmed.
Section Eight- Conflict Clause
That all resolutions, parts of resolutions and board actions in conflict with the terms of this
resolution shall be repealed to the extent of said conflict
Section Nine - Passage Clause
That this resolution shall take full force and effect from and after its passage, approval and
publication as provided by law.
Section Ten - Publication
This resolution shall be published in book or pamphlet form as provided by the Illinois
Municipal Code.
Section Eleven - Saving Clause
If any section, paragraph, clause or provision of this resolution is declared by a court of
law to be invalid or unconstitutional, the invalidity or unconstitutionality thereof shall not affect the
validity of the remaining provisions of the resolution, which are hereby declared to beseparable.
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Section Twelve - Recording
This resolution shall be entered into the minutes and upon the journals of the Board of
Trustees of the Village of Oak Brook.
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APPROVED THIS 26th day of November, 2019.
Gopal Lalmalani
Village President
PASSED THIS 26th day of November, 2019.
Ayes: Trustees Baar, Cuevas, Manzo, Saiyed, Tiesenga. Yusuf
Nays: None
Absent: None
ATTEST:
1Gti F O4,�
d r >; Charlotte K. Pruss
aIr a� Village Clerk
COUNTI
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Exhibit A
Lease Agreement
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REVIEW OF CONTRACTS
Awarding_,;_ge fl.fy: ype or Con ct;
I
�eaa w - rogram/Accou Number:
Awarded Contract Price: Budgeted Amount:
D Under $20,000 D $500,001 -$1;000,000
$20,000 • $500,000 D Over $1,000,000
<-Jch(1 U -a,.,re...- u o.f,e.., Acg.01,,eHCP- -Q,r
C: :Vtu 6qwp
Name: Date:
Name: r.� ` Date:
Name: Date: )-Zl __
Name: Date:
D Three (3) Originals signed by other party Date/Initials
D Original provided to staff member for other party Date/Initials
D Original provided to Official Flies Date/Initials
Village of Oak Brook I Approved by Board of Trustees- Date/Initfals