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FY2008-04 P2008 International Dump Truck OWNER - DISTRIBUTORfMANUFACTURER AGREEMENT Contract No. 2008 - 04 THIS AGREEMENT, made this 11 day of July, A.D., 2007, between the Kodiak Island Borough, acting by and through its Borough Manager, party of the first part, and Cascadia International, LLC of Anchorage, AK, hereinafter called the Distributor. WITNESSETH: That the Distributor, for and in consideration of the payment or payments herein specified and agreed to by the party of the first part, hereby covenants and agrees to furnish a 2008 International Dump Truck for the Kodiak Island Borough per the Premium Specifications [part of the Contract Documents] for same and for the sum of Ninety-four thousand four hundred and fifty eight Dollars ($94,458.00) plus trade in value of $5,000 for 1991 4900 Model International Dump Truck (VIN#IHTSHNZR7NH418504), FOB Whittier Ferry Terminal. The Distributor further covenants and agrees that the manufacturing of said 2008 International Dump Truck shall be done to the complete satisfaction of the Kodiak Island Borough, subject to inspection at all times and approval by any participating agency of the Government of the United States of America, and in accordance with the laws of the State of Alaska and rules and regulations of said Federal Agency. The Distributor further covenants and agrees that the manufacturing of said 2008 International Dump Truck shall be done and performed in the best and most workmanlike manner and that all and every of said materials and labor shall be in strict and entire conformity in every respect with the Specifications: that he will abide by and perform all stipulations, covenants, and agreements specified in the Contract Documents, all of which are by reference hereby made a part of this Contract, as to all premises therein: and in case any of said materials or labor shall be rejected by the Borough Manager or his assistant or authorized representative, as defective or unsuitable, then the said materials shall be removed or replaced with other approved materials and the said labor shall be done anew to the satisfaction and the approval of the Borough Manager or his representatives, at the cost and expense of the Distributor. To the fullest extent permitted by law, the Distributor agrees to defend, pay on behalf of, indemnify and hold harmless the Kodiak Island Borough, its elected and appointed officials, employees and volunteers and others working on behalf of the Kodiak Island Borough against any and all claims, demands, suits or loss, including all costs connected therewith, and for any damages which may be asserted, claimed or recovered against or from the Kodiak Island Borough, its elected and appointed officials, employees, volunteers or others working on behalf of the Kodiak Island Borough, by reason of personal injury, including bodily injury or death and/or property damage, including loss of use thereof, which arises out of or is in any way connected or associated with this Agreement. \\Dove\Departments\EF\Baler Facility\RFPs\RFQs\FY2007\Dump Truck Purchase\Agreement Equipment Purchase. FIN AL.doc Page 1 of 3 The agreement entered into by the acceptance of the Distributor's bid and the signing of this Agreement consists of the following documents all of which are component parts of said Agreement and as fully a part thereof as if herein set out in full, and if not attached, as if hereto attached. 1. Agreement 2. Specifications 3. Instructions to Bidders 4. Bid Schedule In the event of any conflict or inconsistency between any of the foregoing documents, the conflict or inconsistency shall be resolved upon the basis of the numerical order. The document or documents assigned the small number or numbers being controlling over any documents having a larger number in the numerical order set forth above. The Distributor further covenants and agrees that said 2008 International Dump Truck shall be furnished and delivered to the satisfaction of the herein aforementioned Borough Manager, on or before December 20, 2007. It is expressly understood and agreed that in case of the failure on the part the Distributor for any reason, except with the written consent of the Borough Manager, to complete the furnishing and delivery of said 2008 International Dump Truck before the aforesaid date, the party of the first part shall have the right to deduct from any monies due or which may become due the Distributor, or if no monies shall be due, the party of the first part shall have the right to recover One Hundred Dollars ($ 100) per day for each and every calendar day elapsing between the time stipulated, and the actual date of delivery in accordance with the terms thereof: said deduction to be made, or said sum to be recovered not as penalty, but as liquidated damages. Provided, however, that upon receipt of written notice from the Distributor of the existing causes over which said Distributor has no control and which must delay the delivery of said 2008 International Dump Truck, the Borough Manager may at his discretion, extend the period herein before specified for the delivery of the said 2008 International Dump Truck, and in such case the Distributor shall become liable for said liquidated damages for delays commencing from the date on which said extended period shall expire. The Borough agrees to deliver 1991 International Dump Truck to the Whittier Terminal within one month upon receipt of the 2008 International Dump Truck. The Distributor hereby agrees to receive the prices set forth in the proposal as full compensation for delivering the 2008 International Dump Truck to complete said Agreement to the satisfaction of the Borough Manager. It is further distinctly agreed that the said Distributor shall not assign this contract, or any part thereof or any right to any of the monies to be paid him hereunder. \\Dove\Departments\EF\Baler Facility\RFPs\RFQs\FY2007\Dump Truck Purchase\Agreement Equipment Purchase.FIN AL.doc Page 2 of 3 Payment for services rendered under this Agreement shall be made by the Kodiak Island Borough within thirty [30] days of delivery, acceptance by the Kodiak Island Borough and invoicing by Distributor. IN WITNESS WHEREOF, The Kodiak Island Borough Manager, by authority in him vested, has executed this contract on behalf of the Kodiak Island Borough, and the said Cascadia International, LLC have hereunto set their hands and seals, the day and year first above written. KODIAK ISLAND BOROUGH DISTRIBUTOR By Rick L. Gifford Borough Mana er By Title: BY~ Woody Koning Engineering/Facilities Director :~:7!t:L2fM~ oinl07 Borough Clerk \\Dove\Departments\EF\Baler Facility\RFPs\RFQs\FY2007\Dump Truck Purchase\Agreement Equipment Purchase.FINAL.doc Page 3 of 3 Item No. 13.A.4 Kodiak Island Borough AGENDA STATEMENT Regular Meeting of July 5, 2005 Contract No. FY2008-04 Purchase of a Dump Truck for Landfill Operations The landfill has two International dump trucks, a 1991 and 1994, which are used to haul bales and cover material respectively. Staff is proposing to replace the older of the two trucks which is six years past its useful life and fully depreciated. Future maintenance/repair costs will only increase in order to keep the truck up and running. The City mechanic found the condition of the truck to be poor. Cost estimates for the repair of one of the problems identified will be approximately $10,000. The cost to repair the truck, as well as the down time, will outweigh the cost to depreciate a newly purchased truck. Garbage bales require cover at the end of every working day per ADEC regulations. Due to the volume of garbage it would be extremely difficult to operate with one truck. If only one truck was working the increase in personnel costs will be approximately $67,740 annually. The cost to lease a truck will be approximately $3, 750/month with a 12 month commitment or $45,000 for the year. Foam filled tires would have to be purchased at a cost of approximately $3,200. Add to this the potential of 2 months downtime before a leased vehicle could be delivered will increase personnel costs, in overtime, of approximately $11,290 for a total of $59,490. Last year staff recommended the purchase of two dump trucks in order to avoid the upcoming ultra low sulfur fuel emission standards for trucks manufactured in 2007 (2008 models). A number of companies and municipalities purchased vehicles with the "dirty" engines prior to the new standards impacting them. In fact, this was the reasoning behind the recent purchase for the two new vehicles at the Bayside Fire Department. Bids were requested for 2007 (regular "dirty" engine) and 2008 (ultra low sulfur "clean" engine) models in hopes that there were some 2007 engines still out there. Bids were received from: TrailerCraft as an approved substitute - Freightliner, 2007 model ("dirty") in the amount of: $103,704 Cascadia International, LLC - International Truck, 2008 model ("clean") in the amount of: $99,458 - $5,000 (trade in of old vehicle) = $94,458 [Alaska Truck is willing to include a trade in for the old truck at a value of $5,000 which will reduce the purchase price and the annual depreciation cost.] During a recent site visit, managers of the Fairbanks landfill stressed the importance of purchasing equipment that staff is familiarwith. This decreases down time for maintenance and repair. KIB landfill staff has done an exemplary job of maintaining the existing International vehicles for them to have lasted as long as they have. Because landfill staff is most familiar with International trucks, bids were requested for International vehicles. However, staff included "or a pre-approved equivalent" statement in the RFQ. There are a number of entities on-island that have recently purchased International trucks including the City of Kodiak, B&R Fish and Red Hook Construction. Continued on next page. The International truck cost less and is heavier than the Freightliner. It has features which are not included in the Freightliner bid. For example, the bed thickness is greater, heavier duty frame and a high lift gate allowing quicker loading and unloading of bales. While the Freightliner meets the specifications it is essentially the basic, stripped-down light version. The estimated fuel consumption is 300 gallons per year. A verbal quote of $4.50/gallon was given as the expected cost for the new "clean" fuel. It is recommended that the truck from Cascadia International, LLC be purchased, FOB Kodiak, in the amount not to exceed $94,458. Fiscal Notes: D n/a Account No. 530-164-110 Expenditure Required: $94,458 D n/a Amount Budgeted: I D n/a IAPPROVAL FOR AGENDA'&) cf?r Recommended motion: Move to authorize the manager to execute Contract No. FY2008- 04 with Cascadia International, LLC of Anchorage, Alaska in the amount not to exceed $94,458. . I KODIAK ISLAND BOROUGH Engineering & Facilities 710 Mill Bay Road Kodiak, AK 99615 (907) 486-9343 (p) (907) 486-9394 (f) .vkoning@kib.co.kodiak.ak.us MEMORANDUM DATE: TO: FROM: RE: June 14, 2007 Rick L. Gifford, Manager Illi~- Woody Koning, Director ~neering and Facilities Purchase a Dump Truck for Landfill Operations The baler facility requires two dump trucks to operate legally and efficiently. ADEC requires bales of garbage to be covered with rock at the end of each day. which calls for two trucks to be working simultaneously- one hauling bales while the other is hauling rock for cover material. A local heavy equipment mechanic evaluated the oldest truck to be in poor condition with a good engine and a fair frame (see Randy Erickson's report); suggesting the probability of a major breakdown is high. Staff recommends a new truck be purchased to minimize the risk of equipment failure and the additional costs associated with repairs and downtime. For example, in the likely event of transmission failure, KIB will face the following options: 1. REPAIR/REPLACE TRANSMISSION . REPAIRS................................................ .$10,000 repair transmission . OVERTIME WHILE DOWN.. .. . .. .... .. .... .. .. ... .... $5,645/month x 2 months = $11 ,290 ANNUAL ESTIMATE.......... $21,290 2. LEASE A TRUCK . LEASE TRUCK (lYear Minimum)...................$3,750/month x 12 months = $45,000 . OVERTIME WHILE DOWN............................$5,645/month x 2 months = $11,290 . FOAMFILLED TIRES................................ ....$3,200 ANNUAL ESTIMA TE.........$59,490 3. DO NOT REPLACE TRUCK - ADD OVERTIME OR STAFF . OVERTIME WHILE DOWN..... ............. ......... $5,645/month x 12 months = $67,740 OR . HIRE SWINGSHIFT OPERA TOR.................... .$80,590 annually ANNUAL ESTIMATE...........$67,740 OR $80,590 If KIB chooses to purchase the new truck the estimated additional costs, which the budget will easily accommodate, are as follows: . NEW TRUCK COST..... . . . . . . . . . . ......... . . . $94,458 total cost . ANNUALIZED FOR 10YRS .................... ..... 9,446 annually . ADDITIONAL COST OF "CLEAN" FuEL.........i,OOO annually ANNUAL ESTIMATE ....... $10,446 If KIB chooses not to purchase the new truck and no maior breakdown occurs with the old truck, the only additional costs to the landfill will be the staff time and down time expenses needed to perform minor repairs, which are likely to increase with the aging equipment and are impossible to estimate. CONCLUSION: There is need for a new truck regardless what the A-Z study may recommend. It may take most of the year for any recommendations to come out of the study. The proposed truck purchase is the fiscal option of least risk to keep the landfill operating legally and efficiently. Jl J ~ Inspection Report. 5-29-07 rr II 1991 International 4700 Dump Truck. VIN # 1HTSHNZR7NH418504 Located at Borough Bailer Facility. ~ Scale for rating as follows. Excellent-Good-Fair-Poor. ,j i ~ The truck as of 5-29-07 has 4201 hrs and 17200 miles. Body. Poor Interior. Poor Frame Fair Frame mounted accessories, steps, battery box, tanks- -oil and fuel. Poor Box. Poor Steering assembly. Poor Drive train Poor Transmission Poor Engine Good Brake components Poor -J ~ , i j ] 1 I Comments: The Engine is strong- Transmission is slipping-Right side steering box needs repair- Steering components worn-Box is deteriorating. ./:;J~p~ ~~ll O. Erickson ] ~ I I I I I I I NOTICE TO PROCEED Kodiak Island Borough 710 Mill Bay Road Kodiak, AK 99615 To: Cascadia International, LLC 1301 Post Road Anchorage, AK 99501 Contract No.: 2008-04 Amount of Contract: $94,458.00 You are hereby notified to commence work on the referenced contract and deliver the equipment as per the schedule in the contract. The contract provides for an assessment of the sum of $100.00 as liquidated damages for each consecutive calendar day after the contract date for delivery. Dated this By: {jJ!- Nova M. Javi r, CMC Borough Clerk ACCEPT ANCE OF NOTICE Receipt of the foregoing Notice to Proceed is herehy ::kn:l~ { L Title: bvtlfZl ( ~/_f This cttay of fl.t~ 2007. \ \\dove\borough\EF\Baler Facility\RFPs\RFQs\FY2007\Dump Truck Purchase\Notice to Proceed.doc Page 1 of 1