That the City Council approve and authorize the City Manager to execute a five-year lease agreement with Konica Minolta Business Solutions, Inc. (KMBS) for the lease, installation, and maintenance of new copying/scanning equipment.

In December 2016 the City entered into a five-year agreement with KMBS for the lease, installation and maintenance of 15 copying/scanning machines across all City departments. These shared user devices have performed at or above the City’s standards during the term of the lease. Konica Minolta copy/scanning machines have proven to be durable, reliable, functional, and easy to operate and maintain.  Furthermore, KMBS has provided excellent support and responsiveness when called on for routine maintenance or repairs.

In order to secure competitive pricing for a new five-year lease agreement, staff recommends the City utilize the Sourcewell cooperative purchasing contract (SCPC) to lease Konica Minolta copy/scanning equipment from KMBS, as allowed by the Municipal Code.  Sourcewell, formerly the National Joint Powers Alliance (NJPA), is a self-sustaining government organization with 40 years of experience assisting government, education, and nonprofit agencies operate more efficiently through a variety of competitively bid contract purchasing, technology and regional program and services solutions.  Sourcewell contracts are competitively solicited and awarded in accordance with state and federal guidelines and requirements.

The current five-year copy/scanning machine lease agreement is due to expire this fiscal year. In order to continue providing necessary equipment to facilitate City department operations, staff solicited KMBS for a new five-year proposal to replace all 15 existing copy/scanning machines with similar or better new Konica Minolta equipment. Using the Sourcewell competitively bid pricing as an initial framework, and after additional negotiations, staff was able to secure a new proposal that will reduce the City's annual lease payment from approximately $46,400 to $39,065. This represents an annual savings of $7,335 compared to current lease costs, totaling approximately $36,675 in savings over the full five-year term. Staff was also able to negotiate a lower cost-per-page usage rate. The proposed rates will reduce the current cost-per-page rates from $0.01157 to $0.0069 for black and white copies and from $0.07174 to $0.0459 for color copies on high output copier models.  Rates for the standard output copier models will also be reduced from $0.01157 to $0.0077 for black and white copies and from $0.07174 to $0.051 for color copies.  Assuming the same usage as the actual number of copied pages over the past twelve months, the new usage rates would reduce the City’s annual copier usage cost from approximately $45,011 to $33,396, an estimated savings of approximately $11,615 per year, or approximately $58,075 over the full five-year term.

Combining both the lower lease payments and reduced usage rates, staff is projecting a total savings of $18,950 per year, or approximately $94,750 savings over the full five-year term.

The proposed annual lease, usage and maintenance cost for 15 new Konica Minolta copy machines provided by KMBS will be approximately $72,461, for a total of approximately $362,305 over the next five years. The estimated usage cost is a projection based on the previous year of actual usage data. For comparative purposes, the City’s current total annual copier lease, usage and maintenance for its 15 existing copy/scanning machines was $91,663 in Fiscal Year 2019-2020 and $91,411 in Fiscal Year 2020-2021.

If this lease is approved by the City Council, the new proposed annual lease and usage cost will be assessed proportionally and budgeted in each department starting in Fiscal Year 2022-2023.