City of Lawrence

Finance Department

MEMORANDUM

DATE:	February 2, 2006
TO:	Mike Wildgen
	City Manager
FROM:	Alan D. Landis
	Purchasing Specialist

LEASE/PURCHASE TWO BACKHOES BID #B06003

The Public Works Department requests to lease two backhoes for a period of three years, 1,000 hours per year, with the option to purchase at the end of the lease period. We want to make a one time up front payment and have a guaranteed purchase price should we decide to purchase one of the backhoes.  Presently we are using a 1998 backhoe with approximately 4150 hours that has high maintenance costs and is due for replacement.  The bid included a trade in amount for the backhoe for $21,000.00.  Presently the backhoes on Gov Deals are selling for $16,000 or less.  We plan to return another backhoe that is at the end of the lease period.  This purchase was budgeted in the 2006 budgeting process.

Vendor	LEASE each	total LEASE
Murphy Tractor Co.	$37,707.41	$75,414.82
Martin Tractor Co.	$46,215.85	$92,431.70
The Victor L. Phillips Co.	$49,641.98	$99,283.96
Kan Equip INC.	$56,200.00	$112,400.00

Recommendation Action: 

Approve lease of two (2) backhoes for a period of three years from Murphy Tractor Co. in the amount of $75,414.82 (Public Works/Street Maintenance)

cc:	Dave Corliss	Charles Soules
	Frank Reeb	Tammy Bennett
	Bobbie Walthall	Steve Stewart
	Diane Trybom	Tom Orzulak