City of Lawrence
			Request for Vehicle Bids
			Type of vehicle to be bid:	Lease of 3 Loader/Back Hoes
			Department/Division:	Public Works/ Streets
			Approved in the budget?	Yes
			Amount budgeted:	$180,000 - For three year lease
			Budget account:	214-3800-578.60-08 = $60,000 & 505-3900-579-60.08 = $120,000
			Vehicle (& unit #) to be replaced (if any):	Units 338 (trade in), 339 (lease expires) and 761(lease expires)
			Department contact & phone #:	T. Orzulak, 832-3031
			Reason for purchase:	We are currently leasing units 337 and 761. The 3 year lease ends April 2009. Unit 338 is a 6 year old back-hoe that we own. 338 currently requires approximately $8,000 of know maintenance. The average service life of a back hoe is six years. That places unit 338 at the end of its expected service life.  We began the practice of leasing back hoes six years ago. Since then we have estimated a cost savings of about one half the cost to purchase and maintain. Fleet Service Division has tracked cost of leased backhoes vs. purchased backhoes and shown that it cost the city twice as much to own and perform maintenance beyond the three year warranty period. The back hoe is a mission essential piece of equipment for the Street Division. They are used daily to perform a wide variety of task to include, street, storm sewer, levee and emergency operations. It is critical to have this equipment operational at all times. The lease cost is paid for upfront to avoid financing. This translates to a once every there year expense. The back hoes are covered under manufactures warranty for the entire three year lease period.
			Department approval:
			Central Maint. Supt. approval:
			City Manager's Office approval: