HomeMy WebLinkAbout6.k. Approve Lease Agreement for Toro Mowers
EXECUTIVE SUMMARY
City Council Meeting: January 19, 2021
AGENDA ITEM: Approve Lease Agreement for Toro AGENDA SECTION:
Mowers Consent
PREPARED BY: Brian Erickson, PE, Director of Public
AGENDA NO. 6.k.
Works / City Engineer
ATTACHMENTS: Lease Quote APPROVED BY: LJM
RECOMMENDED ACTIONS: Motion to approve leasing two Toro Groundsmaster 5910
mowers from MTI Equipment
BACKGROUND
The City of Rosemount’s Capital Improvement Plan includes the purchase of one large mower for 2021
and one large mower in 2022. The funding for this purchase would come from the Equipment Fund, and
the total amount for these two units is $210,000 ($110,000 in 2021 and $100,000 in 2022).
Staff reviewed the possibility of leasing equipment in addition to the light and medium duty vehicles. With
the addition of a new large mower in the next two years, that option was again reviewed. The proposed 4-
year lease agreement with MTI Equipment would provide 2 new mowers, with appropriate equipment and
a 48 month/2400 hour warranty. An existing 2015 mower would also be traded in as part of this
agreement resulting in a $13,500 credit.
The pricing is based on Minnesota state-bid contracts and at the end of the lease agreement the city would
have the option of purchasing the mowers at fair market value. Staff will review the mowers in 2023, prior
to lease termination and make a recommendation on whether to purchase.
By leasing these two mowers, the annual payment would be approximately $22,000 less than purchasing
these mowers at the end of the lease term. However, at the end of the agreement there would be a need to
determine if the mowers should be replaced or purchased. This lease would also reduce costs paid from
the Equipment Fund in the near term. Please see table on page 2 for detailed cost information.
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MOWER LEASE v. PURCHASE COMPARISON
2021202220232024
Lease
Mower 8607$ 23,542.02$ 23,543.02$ 23,544.02$ 23,545.02
Mower 8066$ 23,542.01$ 23,543.01$ 23,544.01$ 23,545.01
Total$ 47,084.03$ 94,170.06$ 141,258.09 $ 188,348.12
Purchase
Mower 8607$ 110,000.00
Mower 8066$ 100,000.00
Total$ 110,000.00 $ 210,000.00$ 210,000.00$ 210,000.00
Equipment
$ 62,915.97 $ 115,829.94 $ 68,741.91 $ 21,651.88
CIP Savings
RECOMMENDATION
Staff recommends Council approve the lease of two Toro Groundsmaster 5910 mowers from MTI
Equipment.
2
City of Rosemount Quote Date: 1.12.2021
Quote Id#Q00549
Award Price Type: MN State Contract
Contract #178432
Quantity Model #Product Name Unit Award
Price
Extended Award
Price
2 31699 Groundsmaster 5910 (T4)$112,951.30 $225,902.60
2 31701 Auxiliary Braking System $75.07 $150.14
2 30706 North American Road Light Kit $463.73 $927.45
2
cm424-
31699 TPP 48 Months 2400 hours Comprehensive $4,600.38 $9,200.76
1 xx-ue Less trade in Toro GM 31599-315000101 -$13,500.00 -$13,500.00
MN State Contract Pricing is valid until Jan. 31st, 2021.
$222,680.95
exempt
$222,680.95
Financing:
• New Toro Commercial Equipment includes a Two (2) Year Manufacture Warranty
• Terms: Net 30 day (if not financed)
Bob Frank, SCPS Mandi Prinsen, SCPS
Outside Sales Representative Inside Sales Representative
612-877-0837 800-492-6344
bob.frank@mtidistributing.com
Award Price Subtotal
Sales Tax (7.375%)
Award Price Total
mandi.prinsen@mtidistributing.com
MTI Distributing, Inc. • 4830 Azelia Avenue North, Suite 100 • Brooklyn Center, MN 55429
• Set-Up and Delivery at No Charge
• 2.5% Service Fee to be applied to all invoices paid via Credit Card
4 Year Term with 4 annual Payments of: $47,048.03
Thank you for allowing us the opportunity to partner with you on your equipment needs. We are pleased to submit this
equipment proposal for your review. All of the proposed Toro equipment meets, or exceeds, ANSI Safety Specifications.
Toro Equipment Proposal
Please do not hesitate in contacting us with any questions.
FMV (Fair Market Value) Lease Option through TCF Financial - Rates are subject to change without notice / $250.00 Doc Fee
/ / Proposed payments include sales tax / Leased products will be available for purchase at the end of term for a TBD Fair
Market Value price