HomeMy WebLinkAbout02-19-2013 c4 equipment surplus exchange•i `council .j aQEnba REpoat
C I T Y O F S A N L U I S O B I S P O
FROM :Daryl Grigsby, Public Works D irecto r
Prepared By : Gary Keavney, Street Maintenance Superviso r
SUBJECT :EQUIPMENT SURPLUS AND EXCHANG E
RECOMMENDATIO N
1.Authorize the surplus designation of the patch unit, Fleet Asset No . 1104 by trade-in or othe r
method in accordance with the City's policies and procedures as prescribed in the Financia l
Management Manual Section 405-C .
2.Authorize transfer of funds received from the exchange of Asset No . 1104 from the Flee t
Replacement Fund (410) to General Fund Street Maintenance operating budget to support the
purchase of needed equipment .
DISCUSSIO N
The Asphalt Patch Unit is currently part of Street Maintenance program equipment . The asphal t
• patch unit is used primarily to do temporary thin surface patches as a stop-gap measure until a roa d
can be properly repaired or reconstructed . Although the equipment is relatively new (purchased i n
January 2011), Street Maintenance usage has been limited due to several unanticipate d
improvements in the City's patch program . Specifically, experience and a review of Best Practice s
has shown that permanent patches can be completed much more efficiently with the prope r
equipment . The City's recent fleet additions such as the paving machine, paving roller, asphal t
zipper and the freightliner/transfer truck have dramatically enhanced crew capability to complet e
permanent patch repairs without the need for an interim temporary patch . While temporary patche s
have traditionally been the preferred method (primarily to respond to emergency or potentiall y
unsafe conditions) , the City acquisition of the proper equipment and increasing crew expertise ha s
enhanced the City's ability to complete permanent repairs in a timely manner . Permanent repairs
mean the crew does not have to make repeat visits to patch the same street . Temporary surfac e
patches tend to ravel apart fairly rapidly, depending upon traffic loads, and have to be redon e
repeatedly until the street is reconstructed or receives other major maintenance .
When the patch unit was purchased in 2011, Public Works did not anticipate that internal capabilit y
for permanent repairs would increase to the point where the need for temporary patch work woul d
become obsolete . The patch unit is now of limited use, and the excellent condition of the unit make s
it eligible for resale . Staff approached PB Loader, the company that sold this unit to the City, abou t
a possible trade of equipment . The company found a potential buyer for the unit and made an offe r
to trade the patch unit for other equipment and parts needed for Street Maintenance operations . The
exchange value for the asphalt patch unit is $32,531 (Attachment 1).
i Meetin&Dam ''..
.2-19-13
I[em Number C 4
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Equipment Surplus and Exchange Page 2
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Proposal
The proposed equipment exchange involves five items, 1) refurbishing the crack seal kettle, 2) lift
gates, 3) tarp, 4) programmable message board, and 5) plasma cutter . It should be noted the
proposed equipment exchange is an innovation which would enable the City to exchange a littl e
used asset for several other necessary items . The exchange would also eliminate the need for th e
items noted below to be included in the 2013-15 Financial Plan as minor capital requests thereb y
avoiding any delay in activating the new equipment to improve productivity and work quality .
The crack kettle is used to heat material to seal the cracks in the street . This work is completed in
advance of contract microsurfacing to prevent reflective cracking from occurring . This is an
example of an area where the Street Maintenance work compliments contract work . This machin e
has been used extensively since 2007 when it was purchased used from the manufacturer Craftco .
The unit has a significant number of hours of use on it and is overdue for extensive maintenance .
The rebuilding of the unit will include the addition of an engine cover that will significantly reduc e
the decibel volume of the machine during operation, making it much quieter for the public and th e
crew in the vicinity of the operation . Rebuilding cost is approximately one-quarter of the cost o f
new purchase .
The lift gates are electrical hydraulic gates that attach to the back of a pickup thick and are used t o
raise and lower heavy equipment onto, and off a truck bed . The concrete and the paving crews us e
very heavy vibrator compaction machines that have to be manually loaded on and off the trucks .
The crews also have grinders, saws, paint machines, and other equipment that gets loaded into th e
back of pickups that require strenuous lifting . Often times asphalt patching and pothole repai r
materials, weighing over 60 pounds per bag, are manually loaded in the back of trucks . This device
will eliminate manual lifting in many instances and can be removed and re-installed on other pickup
trucks as the trucks are replaced . The addition of this safety device will reduce the potential fo r
work related injuries related to lifting .
The tarp for the trash transfer truck needs replacement . The tarp keeps trash and spoils fro m
blowing out of the back of the drop boxes when they are taken to the land fill for disposal. Covering
loads is required by law to prevent dispersal of materials during transport .
The programmable message board will be a valuable addition for assisting in moving traffic safel y
through the work zones when rehabilitating roads and sidewalks . The message board can be used in
advance of work to notify the public of upcoming activity, and during work to alert drivers an d
cyclists of the need to slow down and merge to avoid a work zone . This unit will be of value t o
more than the street crew, as other programs, such as Tree Maintenance, find themselves workin g
along busy roadways . Message boards are now required more often than not in the City's contrac t
work, given the City's high traffic volumes on the arterial streets during certain times of the day .
A plasma cutter would be beneficial for the fabrication work the crews do in the shop . Last year
two traffic control trailers were constructed by staff for Farmer's Market . Grates for storm drain s
are also made on occasion when needed grates are not of a standard size . A plasma cutter will cut
any metal that is electrically conductive including steel, aluminum, copper, and stainless steel .A
plasma cutter is much faster than the blow torch method and it can be used to cut up old metal pole s
and other metal objects that come to the Corp Yard for salvage and removal, in addition to its value
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Equipment Surplus and Exchange Page3
for regular fabrication work . It will also be used for emergency pole knockdowns in the fiel d
allowing the poles to be cut to size to allow them to be loaded and transferred to the Yard .
CONCURRENCE S
The Fleet Maintenance Supervisor concurs with the recommendation to surplus this vehicle throug h
an exchange .
FISCAL IMPAC T
The original unit was purchased for $46,000 and has an expected life of 20 years . Depreciatio n
would be expected to be 2% to 3% or about $1,200 annually, however the market value of the Patc h
Unit is substantially less than the purchase price minus depreciation . The offer from PB Loade r
appears to be the best way to recapture the value of this equipment, which is not being utilized to it s
highest capacity . The exchange of this unit to PB Loader will provide $32,531 to purchase neede d
equipment for safe and efficient street maintenance operations .
Equipment Ite m
Purchase Value of Patch Unit $32,53 1
Crack Kettle Rebuild $9,607
2 x Lift Gates $6,76 6
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Tarp $83 4
Programmable Message Board $12,00 0
Plasma Cutter $3,00 0
Total :$32,207
Section 480 of the City's Financial Management Manual requires Council approval for surplus i n
excess of $1,000 in value . However, the D irector of Finance and IT may dispose of surplus t o
another local government agency or non-profit based on the recommendation of a department head ,
preferably for auction value or in-kind services . When trade value may exceed auction value, the
Director of Finance and IT may authorize the trade of surplus property in lieu of auctio n
(Attachment 2).
The exchange proposed with the equipment manufacturer includes some items in trade and som e
cash that will be used to purchase the remaining recommended items . Any remaining fund s
following the equipment exchange and purchase of new equipment will be placed in the Flee t
Replacement Fund to support future vehicle replacement purchases .
ALTERNATIVE S
Deny Equipment Exchange.The City Council could determine the unit should be kept or go t o
auction . This alternative is not recommended as the unit is getting insufficient use to warran t
keeping it and will continue to depreciate in value as the equipment ages . The auction value i s
anticipated to be significantly lower than the trade value, and trading the unit will provide
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equipment to streamline operations and improve safety .
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Equipment Surplus and Exchange Page 4
ATTACHMENT S
1.PB Loader Quotation/Offe r
2.Surplus Polic y
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Attachment 1
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Attachment 2
Section 480-A
SURPLUS PERSONAL AND UNCLAIMED PROPERTY POLIC Y
OVERVIE W
This policy addresses the procedures for the disposal of surplus personal property, unclaime d
property, consumable supplies, and junk . The policies and procedures for the disposal or sale o f
surplus real property, abandoned property and resale inventory are provided in other polic y
documents .
In preparing this policy, not all issues or exceptions could be anticipated . Accordingly, th e
guidance given in this policy does not relieve Staff from exercising good judgment in thei r
stewardship of the City's property resources . Whenever there is a question or doubt between the
guidance provided in this policy and the good judgment expected of a prudent person, goo d
judgment should always be the prevailing standard, with this policy as a minimum standard .
LEGISLATIVE POLIC Y
A.Surplus Property
Section 906 of the City Charter provides that the Council must approve the sale o f
surplus property (real or personal) with an estimated value greater than $1,000 .
B.Unclaimed Propert y
1.Chapter 3 .32 of the City Municipal Code provides for the disposal of unclaimed
property by the Chief of Police . This property must be held for a minimum o f
four months and notice of sale must be given at least five days prior to sale b y
publication in a newspaper of general circulation . Property not sold may be
destroyed by the Police Department after public auction .
2.Sections 2080 .4 and 2080 .6 of the Civil Code requires any person fordin g
property valued at $10 .00 or more to turn the property over to the Polic e
Department within a reasonable time, stating when and where the property wa s
found and providing a description of the property . If the property was saved,a
statement is required from the "finder" describing :
a.From what and how it was saved .
b.Whether the owner of the property is known to the "finder".
c.That the property has not been secreted, withheld, or partially disposed .
480-1
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Attachment 2
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Surplus Personal and Unclaimed Property Polic y
ADMINISTRATIVE POLIC Y
A. The Director of Finance & Information Technology (IT) is authorized to declare a s
surplus those items of personal property and consumable supplies estimated to be les s
than $1,000 in value; Council approval is required to declare personal and consumable
supplies as surplus with a value of $1,000 .
B . Department Heads are authorized to approve the disposal of property that is essentiall y
without value due to technical obsolescence or its unrepairable (or economically
unrepairable) condition . Department Heads may dispose of such junk property in th e
manner they deem most appropriate, consistent with other rules, regulations, and th e
City's ethics policy .
C . Generally, estimating the value of surplus property is made by the Department Head o r
designated representative . In unique and unusual cases, Finance will assist Department s
in estimating the value of property by using the City's auction firm to provide a
professional estimate . However, in all cases, the Department Head must approve i n
writing the estimated value of the property to be sold or otherwise disposed .
D . The Director of Finance & IT is authorized to sell, transfer, trade, or otherwise dispose o f
surplus personal property, consumable supplies, or unclaimed property in the most cos t
effective manner. Normally the sale of this property will be at auction with a fir m•
contracted to provide the following services :
1.Sell and dispose of personal property, consumable supplies and unclaime d
property at auction .
2.Provide professional estimates as to the value of personal property an d
consumable supplies when required .
3.Assist in the sale of unique or special property and consumable supplies tha t
requires the use of a "specialty house" to sell or dispose of the property .
4.Dispose of unsaleable property, supplies and equipment at an approved disposa l
site .
E . The Director of Finance & IT may dispose of surplus property and supplies by transfer t o
another local government agency or non-profit organization based on th e
recommendation of a Department Head . Although there may be circumstances where i t
is appropriate to make such transfer without compensation, cash or in-kind service s
should generally be received in an amount equal to or greater than the estimated valu e
provided by the City's auction firm or the Department Head. In the case of vehicles, "lo w
blue book value" may also be considered .
F .When it is a normal business practice, trade value should be obtained to determine th e
•most cost effective method of disposal and as a standard by which to evaluate the
services of the City's auction firm . There may be circumstances when trade value of
480-2 C4-7
Attachment 2
Surplus Personal and Unclaimed Property Polic y
property may exceed auction value, in which case the Director of Finance & IT may
authorize the trade of surplus property versus sale at auction based on the
recommendation of the appropriate Department head .
G.Advertising the sale of the City's property and unclaimed property will be made by th e
City's auction firm in accordance with these procedures, the Auction Service s
Agreement, and legislative policy . Accordingly, the advertising must disclose that th e
property for sale at auction is either the surplus property of the City of San Luis Obisp o
or is unclaimed property in the possession of the City and it must state the date and tim e
of sale . Property sold at auction will be advertised at least five days in a newspaper o f
general circulation in the City of San Luis Obispo .
H.Property determined to be unclaimed by the Chief of Police may be sold at public auctio n
in accordance with these policies and procedures under the following conditions :
1.It is a thing which is commonly the subject of sale .
2.The owner cannot (with reasonable diligence) be found .
3.The owner, if identified, refuses to pay the reasonable charges incurred by the
City for storing and safeguarding of the property .
PROCEDURE S
A.
Surplus Personal Property and Consumable Supplie s
1.Department Heads will identify personal property and supplies that are surplus t o
their needs and notify the Director of Finance & IT by Memorandum to sell or
dispose of property identified, in accordance with City policy and procedures .
The property to be declared surplus will be listed and include the City Asse t
Number (if applicable), a descriptive name of the property, quantity, picku p
location, estimated value, and name of the contract person with their extensio n
number. Separate memorandums must be prepared for property estimated t o
exceed $1,000 in value and for property estimated to be less than $1,000 in value .
The memorandum (or listing) must indicate why the property is no longe r
required .
2.Department Heads may request that Finance assist them in estimating the value o f
personal property and consumable supplies . In such instances, Finance ma y
request the services of the City's auction firm in estimating these values.
However, these services are limited and should not be used except for unique an d
unusual property .
3.Special handling will be required for the disposal of toxic and hazardou s
materials, and should be coordinated with the City's Fire Department .
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