2010-27364 ResoRESOLUTION NO. 2010-27364
A RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER
TO EXECUTE (FOLLOWING THE EXPIRATION OF THE INITIAL TERM,
WHICH OCCURRED ON MARCH 31, 2010) A MONTH TO MONTH
EXTENSION OF THE LEASE AGREEMENT WITH FORT LAUDERDALE
RAREFY DAVIDSON, INC. FOR THE LEASE OF FIFTEEN (15) POLICE
MOTORCYCLES PLUS TWO (2) SPARE MOTORCYCLES FOR THE CITY'S
POLICE DEPARTMENT; SAID EXTENSIONS (UPON THE SAME TERMS
AND CONDITIONS AS THE ORIGINAL LEASE) NOT TO EXCEED BEYOND
MARCH 31, 2011.
WHEREAS, on February 5, 2003, the Mayor and Commission approved a Lease Agreement
with Fort Lauderdale Harley Davidson, Inc. for the lease of fourteen (14) Harley Davidson police
motorcycles and two (2) spare motorcycles, via Resolution No. 2003-25122, for a term of thirty-six
(36) months, with the option to extend the Lease for two (2) additional two (2) year terms; and
WHEREAS, the Lease Agreement expired on March 31, 2010; and
WHEREAS, the Administration intends to solicit proposals forthe lease or purchase offifteen
(15) police motorcycles plus two (2) spare motorcycles, in the coming months; and
WHEREAS, in the interim Fort Lauderdale Harley Davidson, Inc. has agreed to extend the
Lease, upon the same terms, conditions and current pricing, on a month to month basis; and
WHEREAS, the Administration recommends extending the current Lease Agreement with Fort
Lauderdale Harley Davidson, Inc., on a month to month basis, upon the same terms and conditions
as the original Lease, with said extensions not to exceed beyond March 31, 2011 (allowing the City
time to explore all options and alternatives, and proceed with the formal bid process).
NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION
OF THE CITY OF MIAMI BEACH, FLORIDA that the Mayor and City Commission hereby approve
and authorize the City Manager to execute (following the expiration of the initial term, which occurred
on March 31, 2010) a month to month extension of the Lease Agreement with Fort Lauderdale Harley
Davidson, inc., for the lease of fifteen (15) police motorcycles plus two (2) spare motorcycles for the
City's Police Department; said extensions (upon the same terms and conditions as the original
Lease) not to exceed beyond March 31, 2011.
PASSED AND ADOPTED this l y day of ~i~~ , 2010.
ATTEST:
rte. ~ ~. ~
CITY CLERK
APPROVED AS TO
FORM & LANGUAGE
`~
Y R:
Condensed Title:
COMMISSION ITEM SUMMARY
A Resolution Approving And Authorizing The City Manager To Execute (Following The Expiration Of The
Initial Term, Which Occurred On March 31, 2010) A Month To Month Extension Of The Lease
Agreement With Fort Lauderdale Harley Davidson, Inc. For The Lease Of Fifteen (15) Police
Motorcycles Plus Two (2) Spare Motorcycles For The City's Police Department; Said Extensions (Upon
The Same Terms And Conditions As The Original Lease) Not To Exceed Beyond March 31, 2011.
mtenaea outcome
I Increase visibility of police. Maintain crime rates at or below national trends. I
upporting Data (Surveys, Environmental Scan, etc.): The 2009 survey indicates that residents
ontinue to identify safety as one of the top three factors affecting their quality of life, particularly
increasing crime prevention and visibility of police in neighborhoods. 90% of residents said they feel
afe or somewhat safe in their neighborhoods during the night.
Shall the Mayor and City Commission adopt the Resolution?
Item Summary/Recommendation:
The Administration will be soliciting proposals for the lease or purchase of fifteen (15) police motorcycles
plus two (2) spare motorcycles in the coming months. The outcome of the solicitation will not be known for
several months. In the interim, Ft. Lauderdale Harley Davidson, Inc. has agreed to provide the City with an
', extension of the City's lease agreement on a month to month basis, expiring no later than March 31, 2011,
i, offering the same terms, conditions and current pricing. A recent bid offer made to the City of Ft.
Lauderdale for fifteen (15) motorcycles, including routine maintenance for a two (2) year period was
reviewed as a comparison to the City's current costs. The City will save an estimated $28,500 over a
twelve (12) month period. The City also reviewed a bid by the City of Ft. Lauderdale for a lease without
maintenance as well as a purchase option to see if either option was advantageous. Both the lease
without maintenance and the purchase option resulted in higher costs for the City.
The extension of the current lease terms will save the City money as proposals for replacement
motorcycles are solicited and is in the City's best interest.
The Administration recommends, in the best interest of the City, that the Mayor and Commission approving
and authorizing the City Manager to execute a month to month lease agreement, expiring no later than
March 31, 2011, with Ft. Lauderdale Harlev Davidson, Inc.
Advisory Board Recommendation:
Source of
Funds:
OBPI
Financial Impact Summary:
City Clerk's Office Leaislative Tracki
Sign-Offs:
Department Director Assistan y Manager City ager
AET GL JMG
~~t~ Y S~ ~r+ AGENDAtTEM C ~~
nAT~ y
m MIAMIBEACH
CiFy of Miami Beach, 1700 Convention Center Drive, Miami Beach, Florida 33139, vsww.miamibeachfl.gov
COMMISSION MEMORANDUM
To: M ar Mat ~ errera Bower and M hers of the City Commission
i
FROM: JO a M. Go alei, i y Manager
DATE: April 14, 2010
SUBJECT: A RESOLUTION APPROVING AND AUTHORIZING THE CITY MANAGER
TO EXECUTE (FOLLOWING THE EXPIRATION OF THE INITIAL TERM,
WHICH OCCURRED ON MARCH 31, 2010) A MONTH TO MONTH
EXTENSION OF THE LEASE AGREEMENT WITH FORT LAUDERDALE
RAREFY DAVIDSON, INC. FOR THE LEASE OF FIFTEEN (15) POLICE
MOTORCYCLES PLUS TWO (2) SPARE MOTORCYCLES FOR THE
CITY'S POLICE DEPARTMENT; SAID EXTENSIONS (UPON THE SAME
TERMS AND CONDITIONS AS THE ORIGINAL LEASE) NOT TO EXCEED
BEYOND MARCH 31, 2011.
ADMINISTRATION RECOMMENDATION
Adopt the Resolution.
ANALYSIS
On February 5, 2003, the Mayor and Commission awarded a Lease Agreement to Fort
Lauderdale Harley Davidson, Inc. for the Lease of fourteen (14) Harley Davidson police
motorcycles and two (2) spare motorcycles via Resolution No. 2003-25122 for a term of
thirty-six (36) months with the option to extend the Lease for two (2) additional terms,
each term having a period of two (2) years, or an additional four (4) years. The current
Lease with the term extension option expired on March 31, 2010.
The Administration will be soliciting proposals for the lease or purchase of fifteen (15)
police motorcycles plus two (2) spares in the coming months. The one (1) additional
motorcycle was a result of an increase in the Motor Squad officers several years ago.
The outcome of the solicitation may not be known for several months. During this time,
the Administration will take the opportunity to evaluate and test less expensive models of
police motorcycles.
Fort Lauderdale Harley Davidson, Inc. has agreed to provide the City with a month to
month extension of the Lease Agreement, not to exceed twelve (12) months, and
expiring no later than March 31, 2011, offering the same terms, conditions and current
pricing.
Market research (details following) indicates that the cost of motorcycle leases is
increasing as a result of very flat sales of both new and used motorcycles. Fort
Lauderdale Harley Davidson, Inc. is uniquely able to offer the City an extension on the
expiring agreement, as the current leased motorcycles still have one year remaining on
their warranties and the extension will not increase the cost to the dealer.
Commission Memorandum -Motorcycle Lease Extension
April 14, 2010
Page 2 of 3
In order to assess the benefit of extending the Lease Agreement versus soliciting new
proposals, a recent bid that was submitted to the City of Fort Lauderdale was obtained.
Two recent bid offers were made to the City of Fort Lauderdale for the lease of fifteen
(15) motorcycles for their Police Department. The bids were $575 and $550 per month
per motorcycle for a period of two years, including routine maintenance outside of the
standard warranty.
Exhibit "A" (attached) compares the City of Miami Beach's current monthly cost of
leasing fifteen (15) motorcycles plus two (2) spares, removing and installing police
equipment/radios and transferring tags; titles and registration fees, with the offers made
to the City of Fort Lauderdale. The City of Fort Lauderdale bid is for a Harley Davidson
FLHTP model which is a smaller motorcycle than the City of Miami Beach's current
model, the Harley Davidson FLHP Road King.
Extending the City of Miami Beach's current lease for seventeen (17) police motorcycles
with Ft. Lauderdale Harley Davidson, Inc., on a month to month basis, expiring no later
than March 31, 2011, provides the City an estimated cost savings of $28,500 over 12
months as compared to offers made to the City of Fort Lauderdale (which included
routine maintenance).
The City of Fort Lauderdale rejected the two bid offers that included routine maintenance
and re-bid for a Lease Agreement that did not include routine maintenance outside of the
standard warranty, as shown in Exhibit "B" (attached). The City of Miami Beach's current
lease rate of $450 per motorcycle per month, which includes the cost of routine
maintenance, is only $55.34 per motorcycle per month more than the lowest of the
recent offers to the City of Fort Lauderdale without routine maintenance. The Fort
Lauderdale cost for maintenance per motorcycle per month from the two (2) proposals
received is approximately $140. The City estimate of cost for maintenance per
motorcycle per month is approximately $150, making the $55.34 difference a significant
savings to the City.
The lease extension option was also assessed against a purchase option for
motorcycles. In Exhibit "C" the cost to purchase a 2010 Harley Davidson FLHP Road
King police motorcycle is an estimated $15,750 with a 24 month warranty per Florida
State Contract 09-17-0908. The estimated cost to provide and install the public safety
equipment is $4,500 per unit, for a total estimate of $20,250 per unit, or $344,250 for
fifteen (15) motorcycles and two (2) spares. Adding four (4) years of estimated
maintenance costs totaling $122,400 and using a four (4) year motorcycle life cycle, the
annualized cost to purchase for one (1) year is approximately $116,662. The savings to
the City versus the lease extension option is approximately $30,262.
Both scenarios, leasing without maintenance or purchasing, would require the City to
either issue a separate bid to contract maintenance locally or hire a factory trained
certified Harley Davidson motorcycle technician. Purchasing the motorcycles would also
require additional capital funding for the fifteen (15) motorcycles and two (2) spare
motorcycles, plus public safety equipment costs.
Extending the current Lease Agreement with Fort Lauderdale Harley Davidson, Inc., on
a month to month basis, expiring no later than March 31, 2011, is in the best interest of
the City and allows the City time to explore all options and alternatives, and proceed with
the formal bid process, including testing and evaluation. A formal bid that will go out in
Commission Memorandum -Motorcycle Lease Extension
April 14, 2010
Page 3 of 3
June or July of this year would be effective beginning March 2011. The awarded vendor
must be notified no later than October or early November to have new 2011 motorcycles
by March 2011. The City reserves the right to terminate the month-to-month agreement
with 30 days notice to the vendor.
CONCLUSION
The Administration therefore recommends, in the best interest of the City, and to avoid
any unnecessary increases in costs, that the Mayor and Commission approve and
authorize the City Manager to execute a month to month extension, expiring no later
than March 31, 2011, of the current Lease Agreement with Fort Lauderdale Harley
Davidson, Inc., for the lease of fifteen (15) police motorcycles and two (2) spare
motorcycles, under the same terms, conditions and pricing, while at the same time
saving the City an estimated $28,500.
JMG/RCM/GL/AET/mo
T:WGENDA\2010Wpril14\Consent\ Motorcycle Lease
Commission Memorandum -Motorcycle Lease Extension
April 14, 2010
Exhibit A
City Of Fort Lauderdale Bid For Lease Of Fifteen (15) Harley Davidson Model FLHTP*
Motorcycles With Maintenance.
Recent Bid Offer 1-City Of Fort Lauderdale With Maintenance Included:
Per All All Units/12
Vendor #1 Unit/mo Units/mo mos.
City of Ft. Lauderdale offer w/ maintenance for
15 motorcycles* $ 575 $ 8,625 $103,500
Per All All Units/12
Vendor #2 Unit/mo Units/mo mos.
City of Ft. Lauderdale offer w/ maintenance for
15 motorc cles $ 550 $ 8,250 $ 99,000
Current City of Miami Beach Lease Agreement With Maintenance
Included:
Per
Unit/mo. All
Units/mo. All Units/12
mos.
Rate per unit w/maintenance 15 motorcycles $450 $6,750 $ 81,000
Included in the current City of Miami Beach lease agreement are two (2) additional spare
motorcycles at $225 each per month including maintenance.
Cost Savin s for Cit of Miami Beach Compared to Cit of Ft. Lauderdale Bid
City of Ft. Est. Savings
CMB Laud. Rate to CMB over
Current (avg. of 2 12-mos
Rate offers eriod.
12 mo. Rate per unit w/ maintenance for 15
motorc cles $81,000 $109,500 $ 28,500
The comparison of the City of Miami Beach's existing lease rate for twelve (12) months
and an average of the two bid offers received by the City of Fort Lauderdale show a cost
savings of an estimated $28,500 over the next twelve (12) months. Not included in the
estimate is the cost to transfer titles, radios and safety equipment, approximately $500,
in the event the current provider is issued a new contract.
*The City of Ft. Lauderdale bid specifications are for the Harley Davidson model FLHTP, a downgrade or
smaller unit than our current standard.
T:\AGENDA\2010\April14\Consent\ Motorcycle Lease
Commession Memorandum -Motorcycle Lease Extension
Apri( 14, 2070
Exhibit B
City Of Fort Lauderdale Bid For Lease Of Fifteen (15) Harley Davidson Model FLHTP*
Motorcycles Without Maintenance
Recent Bid Offer 2-City of Fort Lauderdale Without Maintenance Included
Per All All Units/12
Vendor #1 Unit/mo Units/mo mos.
City of Ft. Lauderdale offer w/o maintenance for
15 motorcycles` $ 394.66 $ 5,919.90 $ 71,038.80
Per All All Units/12
Vendor#2 Unit/mo Units/mo mos.
City of Ft. Lauderdale offer w/o maintenance for
15 motorcycles $ 410.00 $ 6.970.00 $ 83,640.00
Current City of Miami Beach Lease Agreement with Maintenance Included:
Per All All Units/12
Unit/mo. Units/mo. mos.
Rate per unit w/ maintenance for 15
motorc cles $450.00 $6,750.00 $ 81,000.00
Included in the current City of Miami Beach lease agreement are two (2) additional spare
motorcycles a[ $225.00 each per month including maintenance.
The average cost of routine maintenance outside of a standard warranty was not included in the second
bid by the City of Ft. Lauderdale. Without a maintenance contract, there is no limit or cap on the overall
cost of maintenance over the contract period. The estimated cost of maintenance per motorcycle unit is
$150.00 per month or $1800 per motorcycle per year, not including the cost to replace tires and clutches
which is included in our current contract.
The City of Miami Beach's current rate, which includes the cost of routine maintenance, of $450.00 per
motorcycle is an average of $47.67 more than the two recent offers to the City of Ft. Lauderdale without
routine maintenance.
*The City of Ft Lauderdale bid specifications are for the Harley Davidson model FLHTP, a downgrade or smaller unit than our
current standard.
T:\AGENDA\2010\April l4\Consent\ Motorcycle Lease
Commission Memorandum -Motorcycle Lease Extension
April 14, 2010
Exhibit C
Cost to Purchase Police Motorcycles
Estimated Purchase Price of Harley Davidson FLHP Road King
w/ ABS Brakes and 24-Month Factory Warranty
Per Unit 17 Units
Estimated purchase price per
FL State contract 09-17-0908
$ 15,750
$ 267,750
Estimated cost to purchase &
install ublic safet e ui ment
$ 4,500
$ 76,500
Total $ 20,250 $ 344,250
Estimated Annual Maintenance Expense
Each Unit 17 Units Cost over 4-year life
c cle
Annual estimated
maintenance cost $1,800 $30,600 $122,400
"Years 1 & 2 motorcycles under factory warranty
Cost of Capital and Expense for 17 Units Annualized Over 4-year Life Cycle
Ca ital $ 86,062
Maintenance $ 30,600
Total Annualized Cost $116,662
Purchasing the motorcycles will require additional capital funding for public safety
equipment costing an estimated $4,500 per motorcycle, or $76,500 for fifteen (15)
motorcycles plus two (2) spares. Purchasing fifteen (15) Harley Davidson motorcycles
and two (2) spare motorcycles will require the issuing of a separate bid to contract
certified maintenance locally and/or hire a factory trained, certified Harley Davidson
motorcycle technician.
The FL State contract 09-17-0908 purchase price does not include the cost of routine
maintenance outside of a standard warranty and without a maintenance contract there is
no limit or cap on the overall cost of maintenance over the contract period. An estimated
cost of routine maintenance outside of a warranty is $1,800 per motorcycle per year, not
including tires and clutches for the first two (2) years while the motorcycles are under
warranty, or $30,600 per year for seventeen (17) motorcycles. The savings to the City
versus the lease extension option is projected to be $30,262 annually.
T:WGENDA\2010Wprill4\Consent\ Motorcycle Lease