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HomeMy WebLinkAboutItem 06.hApril 2, 2012 Proposed Action Staff recommends adoption of the following motion: Move to Approve Lease Agreement with Ag Power Enterprises, Inc. for mowing equipment. Passage of this motion will result in the City leasing two new 4WD John Deere 1445 mowers with 72" front mower and mulching kit in 2012 and 2013. Overview The Park Maintenance Department has leased mowing equipment for the past eleven years to supplement our fleet, which has proven to be a cost effective way to ensure reliable equipment is available with minimal repair needs. Staff obtained three quotes from vendors to lease two mowers in 2012 . and 2013 as follows: 2012 2013 Ag Power Enterprises, Inc. $ 8,015.62 $ 8,015.62 Scharber & Sons, Inc. $ 8,122.50 $ 8,122.50 Frontier Ag & Turf $11,756.25 $11,756.25 Staff is requesting approval to execute a Lease Agreement with Ag Power Enterprises, Inc. to lease two new 4WD John Deere 1445 mowers in 2012 and 2013. Primary Issues to Consider The City has been satisfied with the leasing of equipment in the past. Supporting Information Lease Agreement APPROVE LEASE AGREEMENT WITH AG POWER ENTERPRISES, INC. FOR MOWING EQUIPMENT Jo r( Hennen Park Maintenance & Operations Mgr jo w, Laketiffie Item No. Financial Impact: $8 015.62NYR Budgeted: Y/N Y Related Documents (CIP, ERP, etc.): Notes: Source: Park Maint. Gen Fund Unit Model I Manufacturer Description j Present Value A 4WD John Deere 1445 w/ mulch kit 72" Front Mower $20,312.00 B 4WD John Deere 1445 w/ mulch kit 72" Front Mower $20,312.00 AGREEMENT made this 2nd day of April 2012, by and between the CITY OF LAKEVILLE, a Minnesota Municipal Corporation ( "City ") and AG POWER ENTERPRISES, INC. IN CONSIDERATION OF THEIR MUTUAL COVENANTS, THE PARTIES AGREE AS FOLLOWS: 1. LEASE. Ag Power Enterprises, inc. hereby leases to the City, and City hereby leases from Ag Power Enterprises, Inc., the following equipment: 2. TERM. The term of the Lease Agreement is four (4) months for Unit A and four (4) months for Unit B commencing on May 1, 2012, and again on May 1, 2013. 3. LEASE. Unit A: Four months (2012) $ 4,007.81 total lease plus $ 8.00 per hour in excess of 200 hours Four months (2013) $ 4,007.81 total lease plus $ 8.00 per hour in excess of 200 hours Unit B: Four months (2012) $ 4,007.81 total lease plus $ 8.00 per hour in excess of 200 hours Four months (2013) $ 4,007.81 total lease plus $ 8.00 per hour in excess of 200 hours The TOTAL LEASE for the two units, including sales tax, delivery and all costs in 2012 is $8,015.62. Ag Power Enterprises, Inc. shall invoice the City in May and July in the amount of $4,007.81. Payment shall be made within 30 days of receipt of invoice. The TOTAL LEASE for the two units, including sales tax, delivery and all costs in 2013 is $8,015.62. Ag Power Enterprises, Inc. shall invoice the City in May and July in the amount of $4,007.81. Payment shall be made within 30 days of receipt of invoice. 4. DELIVERY. Ag Power Enterprises, Inc. shall deliver the equipment to the City at a location approved by the City at the beginning of the term, and shall pick up the equipment at the end of the term. C:1 Users& mnbelpmurph' AppoatalLoca t\.Microsnttlwindows \Temporary Internet Files \Content.outlook \SPX48G5F1Mower Lease Agreement.doc 5. MAINTENANCE AND REPAIR. Ag Power Enterprises, Inc. agrees that, during the term of this lease agreement, it will, at its own expense: a. Furnish all mechanical replacement parts required. Anything defective in material and/or workmanship would be covered under the manufacturer's warranty by Ag Power Enterprises, Inc. Any parts that are wear and tear items (blades, filters, oil, etc.) would be the responsibility of the lessee. b. Provide all major repairs and/or replacement of major components within two (2) working days of notification. In the event the equipment is damaged, City will immediately report the same to Ag Power Enterprises, Inc. Excluding damage, repairs beyond normal maintenance will be performed by Ag Power Enterprises, Inc. at no cost to the City. c. Ag Power Enterprises, Inc. will be responsible for keeping the equipment completely operational during the lease period (under penalty of $25 per day per leased unit after 48 hour notice of breakdown). Ag Power Enterprises, Inc. may furnish a replacement for the inoperable rental unit, in which case the penalty will not be charged. 6. LOSS OR DAMAGE. City shall assume the entire risk of direct or consequential Toss, theft, destruction or damage of equipment. No loss or damage shall relieve City of the obligation to make rent or other payments. Any damage shall be repaired by Ag Power Enterprises, Inc. and paid for by the City at Ag Power Enterprises, Inc. prevailing rate, less 10% and less any insurance reimbursement. 7. OPTION TO PURCHASE. Upon expiration of the Term of this Rental Agreement, or at any time during such term, City may elect to purchase the equipment for the total "Present Value" shown above, and may apply to such purchase price fifty percent (50 %) of all rentals theretofore paid. Such election shall be evidenced by execution of a purchase order, together with payment of the remainder of the purchase price in cash, or settlement for the equipment in some other manner agreed to by the parties. CITY OF LAKEVILLE BY: BY: `". ---./ AND: Its: te. 1 f � Mark Bellows, Mayor Charlene Friedges, City Clerk �-r G: lUserslmnbelpmurph4 4ppDatalLocallt VlicresoftIwindowslTemporary Internet Files 1Content- Outlook\SPX4BG6F\Mawer Lease Agreement.doc