The following equipment to be replaced and purchased are included in the 2022 Capital Improvement Plan (CIP):

Engineering - Sanitary Sewer: Pickup Trucks

The replacement of Ford F-150 No. sk1125 (34,174 miles), and sk1154 (69,413 miles), are summarized in the attached CIP sheet Equip-22-411, and Sewer-22-425. The pickup trucks are being purchased under State of Minnesota Contract No.169665 through Midway Ford. The quotation form is attached and is consistent with state contract pricing. The cost of the vehicles are $38,245.76 each.

Once replaced, the two pickup trucks will be further evaluated and possibly rotated to replace other current holdover vehicles that are used for city staff vehicles. The identified holdover vehicles that are to be replaced will then be declared surplus at a later date.

Community Center - Cargo Van

The replacement of the cargo van is summarized in the attached CIP sheet Equip-22-671. The cargo van will be purchased under State of Minnesota Contract No. 169035 through Ford of Hibbing. The quotation form is attached and is consistent with the state contract pricing. The cost of the vehicle is $58,696.02.

The existing van sk1119 (27,000 miles) has been evaluated, is no longer needed and has been determined that the useful life has been expended and should be declared surplus inventory. Once formally declared surplus and the new van is in service, this vehicle will be sold at auction.

Public Works - Streets: Two 2021 Mack Plow Trucks

The replacements of two plow trucks with box, hoists, plow, dual prewet sanders and accessories (Nos. sk1148 and sk1149) are summarized in the attached CIP sheet Equip-21-422. These vehicles are being purchased under the State of Minnesota Contract Nos. 194871 and 212541. The quotations from Nuss Truck & Equipment and Towmaster Truck Equipment are attached and are consistent with the state contract pricing. The cost of the vehicles are $111,811.62 each plus an additional $187,956.00 each for the equipment purchase and install, totaling $299,767.62 per each vehicle, with an overall total $599,535.24 for the two snow plow trucks.

This same CIP Equip-21-422 snow plow purchase was previously approved by City Council at the January 4, 2022 meeting. The equipment was ordered immediately and because of supply chain issues, subsequently cancelled by the truck chassis supplier in March 2022, nullifying the old contract. A new state contract is now in place with a notable increase in price of $38,000.00 per vehicle.

The trucks have been evaluated and determined that 2007 plow truck sk1148 (3208 hours) and the current spare back-up holdover 2006 plow truck sk1090 (4320 hours) are no longer needed, their useful lives have been expended and should be declared surplus inventory for trade-in/sale once replaced. These trucks have been offered for trade-in by Nuss Truck and Equipment, truck sk1148 in the amount of $25,000.00 and truck sk1090 in the amount of $20,000.00 The 2007 plow truck sk1149 that has (3572 hours) will be retained as a holdover and back-up for the snow/ice control fleet.

Table 1 below provides a summary of the costs and funding for the equipment purchases, comparing the actual amounts to the CIP budgeted amounts. All equipment is funded by the Equipment Internal Service Fund except one F-150, which is funded by the Sanitary Sewer Fund. Revenues from the sales of surplus equipment will be deposited into the Equipment Internal Service and Sanitary Sewer Funds, respectively.

Table 1. Equipment Cost and Funding Summary

The Equipment Fund has adequate cash balance for the additional funding needed to purchase the vehicles and equipment. Also note that the trade-in revenue amounts totaling $45,000 for the snow plow trucks that will be deposited in the Equipment Fund will reduce and offset the overages included in Table 1. Future adjustments will be made for equipment rental fees for these vehicles, accordingly.