Discussion:

During the 2017 budget process, the number of front end loader garbage packers used to collect waste from facilities such as condominiums, non-profit organizations and City buildings was reduced from two to one. As a result, the dedicated rental budget was reduced by one unit (1077) and the seasonal rental budget was increased in order to pay for occasional equipment rental as needed when the dedicated unit was in for service.

The Fleet Division did not dispose of the eliminated packer (1077), rather it was maintained and utilized as needed when the dedicated unit was in for service. This unit is 13 years old and has incurred costly repairs to keep it operational. In 2018, this unit was used a total of 248 hours at a cost of $33,292. In 2019, this unit was used a total of 219 hours at a cost of $63,000. It is anticipated that the cost to continue using this unit will increase substantially each year.

Due to the established customer base in 2019 and requests for additional service from existing customers in 2020, it has been determined that the Environmental Services Division requires the use of the previously eliminated front end loading packer to continue to provide established service as well as any additional work. While renting a front end loader was considered, it is not feasible to do so as the cost to rent a truck is $10,500 plus tax per month plus the cost of $1,500 to ship the vehicle. This type of vehicle can only be rented on a monthly basis and are not readily available. In addition to the rental cost, Environmental Services would be required to pay for all operating costs. A review of the usage in 2019 of the eliminated packer indicates that a truck would need to be rented for 11 months, if one is available. Purchasing a unit to replace 1077 with a dedicated unit will ensure the City is able to fulfill its currents contractual obligations with existing customers and be in a position to secure further business from an established customer. This business will generate additional revenue which will offset the increased operating budget impact of purchasing the front end loader.

A portion of the funds required to purchase a replacement for the previously eliminated unit (seasonal unit) are available in the fleet replacement reserve fund.

Unexpected increases due to tariffs, exchange rates and inflation have greatly inflated the cost of speciality equipment. To select the replacement unit, a Request for Proposal will be issued by the Purchasing Department and a purchase order will be issued to the proponent submitting the lowest cost while achieving the highest technical score.

Risk Analysis:

The existing seasonal rental unit is at the end of its useful life. Any delay in replacement may result in costly repairs to the unit.

If the Environmental Division does not have the equipment required to provide the expected level of service, there is a risk that a front end loading packer will need to be rented at a cost of $10,000 per month or $1,400 per day as these types of units are not readily available.