Consideration and Approval of Contract:  Lease buyout of one commercial front load truck from Rush Truck Leasing, Inc. (d.b.a. Rush Refuse Systems).

On June 7, 2016, the Solid Waste Section requested that Council approve a Cooperative Purchase Agreement that would allow the City to lease two commercial front load trucks from Rush Truck Leasing, Inc. (d.b.a. Rush Refuse Systems) (hereinafter "Rush Refuse Systems").  The Cooperative Purchase Agreement (#T15-097-01) came from the City of Tempe who conducted a formal Invitation for Bids process and selected Rush Refuse Systems (Tempe Cooperative Purchase Agreement available upon request). 

The City approved the Master Lease/Rental Agreement ("Lease Agreement") and these vehicles were used as "front-line" trucks while the City's Fleet Maintenance Division repaired the older commercial front load trucks. The new commercial front load trucks were unused when the City took possession. Pursuant to Section 8 of the Lease Agreement, the City could purchase the equipment in the lease buyout option. The Solid Waste Section seeks to exercise this option and purchase one commercial front load truck from Rush Refuse Systems.
 

Under the lease buyout, the City would be purchasing the commercial front load truck for $217,068.07. This calculation includes a credit of $76,700.00 of rental fees that have already been paid under the Lease Agreement. 

The City budgeted $230,000 for the FY 2018 purchase of a commercial front load truck in line item 211-06-166-0644-0-4401.  In addition, the Fleet Committee approved the purchase of this piece of equipment.

REGIONAL PLAN:
Goal PF.2. Provide sustainable and equitable public facilities, services, and infrastructure systems in an efficient and effective manner to serve all population areas and demographics.

Yes, on June 7, 2016, Council approved the Lease Agreement, which has a provision that allows for a lease buyout option.

Option 1.  Approve the purchase of one commercial front load truck from Rush Refuse Systems in the amount of $217,068.07.

Option 2. Purchase a new commercial front load truck from Rush Refuse Systems off of the Cooperative Purchase Agreement with the City of Tempe (#T15-097-01) in the amount of $287,151.69.

Option 3.  Conduct our own competitive bid process.

After experiencing mechanical issues with multiple pieces of equipment, the Solid Waste Section submitted a request to Council to enter into the Lease Agreement for two commercial front load trucks from Rush Refuse Systems with a lease buyout option. Council approved the Lease Agreement on June 7, 2016, and the City took delivery of the trucks shortly thereafter. Pursuant to the Lease Agreement, the City would possess a 2015 commercial front load truck for six months and a 2016 commercial front load truck for twelve months.

These rentals were used as "front-line" trucks while the older commercial front load trucks used were being repaired by the City Fleet Maintenance Division. Once Fleet Maintenance had repaired enough trucks, the City returned the 2015 commercial front load truck after the six month term-lease and maintained possession of the 2016 commercial front load truck while Fleet Maintenance continued with additional repairs on older trucks.

Solid Waste has an opportunity to purchase this piece of equipment at a used price while receiving credit for some of the rental fees they have paid over the past 14 months.

By exercising this buyout option, the Solid Waste Section will have 15 Peterbilt cab/chassis' commercial front load trucks in its fleet. The City and Fleet Services have had a long working relationship with Rush Refuse Systems here in Flagstaff and the company will be able to provide warranty and post warranty repair if needed. This use of a company with local connections promotes Council's goal of providing "sustainable and equitable" services to our population. Additionally, the City's own Fleet Services is authorized to perform warranty repair on the commercial front load trucks and repairs performed by Fleet Services are eligible for reimbursement from the manufacturer.

The purchase of this piece of equipment was budgeted for FY 2018 and approved by the Fleet Management Committee.  These funds are located in line item 211-06-166-0644-0-4401 in the amount of $230,000.

Community benefits include continuous, dependable, quality Commercial trash and recycling collections at the lowest possible user fees.  In addition, having modern, clean, and efficient collection equipment with the most advanced emission control and fuel saving technology in our fleet portrays a positive image to the community we serve.

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