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February 16, 2010 Item No. `c
APPROVE LEASE AGREEMENT
WITH AG POWER ENTERPRISES, INC. FOR MOWING EQUIPMENT
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 three new 4WD John Deere 1445
mowers with 72" front mower and mulching kit in 2010 and 2011.
Overview
The Park Maintenance Department has leased mowing equipment for the past nine
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 three mowers in 2010 & 2011
2010
Ag Power Enterprises, Inc. $12,664.68
Scharber & Sons, Inc. $17,474.07
Frontier Ag & Turf $17,634.38
as follows:
2011
$12,664.68
$17,474.07
$17,634.38
Staff is requesting approval to execute a Lease Agreement with Ag Power Enterprises,
Inc. to lease three new 4WD John Deere 1445 mowers in 2010 and 2011.
Primary Issues to Consider
• Has the City been satisfied with the leasing of equipment in the past?
Supporting Information
• Lease Agregment
n Henndn
Maintenance & Operations Mgr
Financial Impact: $12,664.68/YR Budgeted: Y/N Y Source: Park Maint. Gen Fund
Related Documents (CIP, ERP, etc.):
Notes:
LEASE AGREEMENT
AGREEMENT made this 16th day of February 2010, 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:
Unit
Model
Manufacturer
Description
Present Value
A
4WD
John Deere 1445 w/ mulch kit
72" Front Mower
$ 20,190.96
B
4WD
John Deere 1445 w/ mulch kit
72" Front Mower
$ 20,190.26
C
4WD
John Deere 1445 w/ mulch kit
72" Front Mower
$ 20,190.26
2. TERM. The term of the Lease Agreement is six (6) months for Unit A, six (6) months for
Unit B and six (6) months for Unit C commencing on May 1, 2010, and again on May 1, 2011.
3. LEASE.
Unit A: Six months (2010)
$4.221.56 total lease plus
$8.00 per hour in excess of 225 hours
Six months (2011)
$4,221.56 total lease plus
$8.00 per hour in excess of 225 hours
Unit B: Six months (2010)
$4,221.56 total lease plus
$8.00 per hour in excess of 225 hours
Six months (2011)
$4,221.56 total lease plus
$8.00 per hour in excess of 225 hours
Unit C: Six months (2010)
$4,221.56 total lease plus
$8.00 per hour in excess of 225 hours
Six months (2011)
$4,221.56 total lease plus
$8.00 per hour in excess of 225 hours
The TOTAL LEASE for the three units, including sales tax, delivery and all costs in
2010 is $12,664.68. Ag Power Enterprises, Inc. shall invoice the City in May, July and
September in the amount of $4,221.56. Payment shall be made within 30 days of
receipt of invoice.
The TOTAL LEASE for the three units, including sales tax, delivery and all costs in
2011 is $12,664.68. Ag Power Enterprises, Inc. shall invoice the City in May, July and
September in the amount of $4,221.56. Payment shall be made within 30 days of
receipt of invoice.
CADocuments and Settings\mnbelpmurph\Local Settings\Temporary Internet Files\0LK6C\Mower Lease Agreement.doc
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.
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 loss,
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.
M
CITY OF LAKEVILLE
Holly Dahl, Mayor
AND:
Charlene Friedges, City Clerk
BY:
Its:
CADocuments and Settings\mnbelpmurph\Local Settings\Temporary Internet Files\0LK6CWower Lease Agreement.doc