HomeMy WebLinkAboutREP FC 444 01/11/1988 1984-1988 REPORT OF THE •
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COMMITTEE ON FINANCE
Date: January 11, 1988 Re: Comm. 1429
Place: Councilroom
Time: 10 :00 a.m.
Chairman and Members
Hawaii County Council
Hilo, Hawaii 96720
Your Committee on Finance, to which was referred Resolution
No . 385-88, reports as follows:
The purpose of Resolution No. 385-88 is to approve a lease agreement
with purchase options with Pacific Machinery for sixty months
starting on July 1, 1988, and ending on June 30 , 1993 .
Your Committee on Finance is aware that the agreement to be entered
into involves the following equipment:
1 . Compactor w/bulldozer - CAT 826C
2. Track-type loader - CAT 973
3. Crawler tractor w/bulldozer - CAT D8N
Your committee is also aware that based on a review and evaluation
of the bid results, Pacific Machinery is being recommended for all
three equipment units for the following reasons:
1 . A reasonable interest rate of 7-1/2 percent .
2 . Serviceability of the units is guaranteed for five years.
3. The lease cost per hour of operation ranges from $17 .82 for
the track loader to $24. 20 for the bulldozer .
4. Reliable services are assured through the warranty options
and by a liquidated damages provision.
5. A "government funding out clause" automatically terminates
the agreement and relieves the County from the payment
obligation in the event funds are no longer available.
6 . The decision to purchase can be made as the County nears.
the end of its five-year lease period and it would be based
on the condition of the equipment and its remaining service
life.
7 . Fifty-two thousand eight hundred dollars ($52,800) have
already been expended on equipment rental for unserviceable
equipment .
Your committee is further aware that it is the intentof the
Department of Public Works to include in the agreement all warranty
options on power train and under carriage.
FC REPORT No, 444
ADOPTED : JAN 18 19
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FC- 444 Page 2 January 11, 1988
Your committee has been further informed that the delivery time is
150 days and that the funding would be in the FY 1988-89 operating
budget .
Your committee has been also informed of the following cost
breakdown:
Item No. 1 - Compactor w/bulldozer - CAT 826C $63, 708
Item No. 2 - Track-type loader - CAT 973 53,484
Item No. 3 - Crawler tractor w/bulldozer - CAT D8N 72, 600
Total Annual Lease $189,792
The purchase price at the end of the five years, should the option
be selected, would be:
Item No. 1 - Compactor w/bulldozer - CAT 836C $ 69,000
Item No. 2 - Track-type loader - CAT 973 85 ,000
Item No. 3 - Crawler tractor w/bulldozer - CAT D8N 120,000
Total Purchase Option $274,000
In answer to the committee 's concern about what action is to be
taken at the end of the 5-year lease period, it was learned that the
Public Works Department will evaluate the condition of the equipment
prior to then and make a decision based on the condition of the
equipment at that time. Outright purchase of the equipment is a
consideration.
Your committee has been apprised of the fact that with the
acquisition of the equipment, the needs for landfill operations will
be satisfied for now.
Your Committee on Finance concurs with the intent of Resolution
No. 385-88 and recommends its adopt
LAO EL
FRANK DE LUZ III, CHAIRMAN
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ORRA`'-NE R. =ararA KU-INOU , V. L. K. DAHLBERG, MEMBER
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TAKASHI DOMING , MEMB SSELL S. KOKUBUN, MEMBER
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�- � (ABSENT & EXCUSED)
ME' K. LAI, MEMBER SPENCER K. SCHUTTE, MEMBER
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