HomeMy WebLinkAboutTR-46-95 THE CORPORATION OF THE MUNICIPALITY OF CLARINGTON
Xis �1� 1�X �XX
REPORT
Meeting: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
Date: June 19, 1995 Res. # LiL L 'y_on;
By-Law# 1 ®L�
Report#:—��6-9a-,.� File #:
Subject: PROPOSED MAIL PROCESSING EQUIPMENT LEASE - ADMINISTRATION
Recommendations:
It is respectfully recommended that the General Purpose and Administration Committee recommend
to Council the following:
1. THAT Report TR-46-95 be received;
2. THAT Council accept the written proposal (Schedule "A") Option 2, from Friden
Neopost, Scarborough, Ontario, through Municipal Leasing (Schedule "B"), to lease
the Mail Processing Equipment at a fixed lease cost of $1,055.50 plus G.S.T. and
P.S.T.,per month for a period of thirty-six (36) months;
3. THAT the funds be drawn from the Capital Lease Account 7007-X-0520;
4. THAT the procedures set out in the Purchasing By-Law #94-129, Section 5,
Paragraph 5.04 be waived for this particular transaction; and
5. THAT the attached By-Law (Schedule "C") be forwarded to Council for approval.
BACKGROUND AND COMMENT:
The current five (5) year lease with Friden Neopost which expired April 30, 1995 included folding
and inserting equipment, a burster and mail centre furniture.
The folding and inserting equipment is now five (5) years old. Should the Municipality decide to
keep the existing products a major overhaul would be recommended to keep the equipment in good
operational condition. Wear on major assemblies have shown an increase in maintenance calls by
thirty-two percent (32%). Costs to the Municipality related to overhauling the equipment runs
traditionally between $12,000.00 to $14,000.00.
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RVStSPRiMEDC PECVCIEDPAPEF
TR-46-95 Page 2
With the volume of mail being processed by the various departments the lease of an updated mailing
machine complete with accounting package is recommended. This mailing system includes an
electronic scale, a printer, a conveyor stacker and an accounting system with 'valid departments"
which will track and allocate charges for up to ninety-nine (99) individual departments and would
enable the municipality to allocate applicable charges to individual departments and to control
postage expenses.
For information purposes, the following is a summary of the options available. Note, all prices
quoted are plus G.S.T. and P.S.T.
Option 1 - Replace Mailing Machine and Scale Only
PITNEY BOWES FRIDEN NEOPOST
Model PD21 Paragon Mail Processor with 45 Model SM-94 Heavy
kg. scale Duty Mailing Machine
Model Elll Postage by Phone Meter Model 8870 - 32 kg.
capacity, electronic scale
Model 8854 Electronic Interfacing
Model 8888 Special Riser Support for Scale
and Printer Package with hard copy print-
out of up to 99 departments
MAC 3 Mail Accounting System with "Valid
Departments"
Model 9412 Conveyor Stacker
Outright Purchase Price $18,300.00 Outright Purchase Price $16,164.00
Lease Cost based on Lease Cost based on
36 months @ $610.00 x 36 21,960.00 36 months @ $527.59 18,993.24
through Municipal Leasing
Meter Rental per month 54.95 Meter Rental per month 61.75
Paragon rate change disk Automatic rate pak
each change 195.00 insurance to cover all j
changes in rates per month 24.50
Maintenance cost per month 119.00 Maintenance cost per month 100.00
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Note: Friden Neopost would waive the buyout cost of the existing equipment in the amount of
$2,596.42 and the final March and April lease payments on the existing lease of$1,277.00
per month plus taxes, should either of their options be accepted.
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TR-46-95 Page 3
Friden Neopost recommends upgrading the inserter to a Model IN2B Production Inserter with
programmable functions for operator's convenience. The upgrade would include the overhaul of the
transport unit, all feeders and extension and existing folding/inserting system. This upgrade would
reduce our overall costs considerably and Friden Neopost would undertake the maintenance at no
extra charge and warranty their use for a five (5) year period when placed on a maintenance plan.
At the completion of our present lease, Friden Neopost will sign over the existing Friden Model 970
Burster and mail centre furniture to the Municipality, thereby eliminating the need to repurchase or
lease these items and waive the normal ten percent (10%) buyout cost resulting in a potential
savings of $865.00
Option 2 - Friden Neopost - Replace Mailing Machine, Scale and Upgrade Inserter
(all prices quoted are plus G.S.T. and P.S.T.)
Upgrade existing inserter to a IN213 production inserter with programmable job functions at
no charge and overhaul the transport, feeders and extension with full warranty for a five year
period.
Provide a new SM-94 Heavy Duty Mailing Machine complete with electronic scale, power
stacker and special riser, interfacing and accounting package all as described in Option 1.
Friden Model 970 Burster and Mail Centre Furniture will be
signed over to the Municipality and this equipment will be owned by the Municipality with no
buyout cost.
Outright purchase price $32,450.00
Lease cost based on thirty-six (36) months 37,998.00
through Municipal Leasing @ $1,055.50 x 36
Meter rental per month 61.75
Automatic rate pak insurance coverage to 24.50
include all postal changes per month
Maintenance contract per month for all 302.50
equipment included in Option 2
(including burster)
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TR-46-95 Page 4
In view of the above, a recommendation to accept Option 2 from Friden Neopost, Scarborough,
Ontario and leasing through Municipal Leasing, would result in the following benefits for the
Municipality:
• A mailing machine with new technology including a 240 speed letter per minute feature and
a conveyor stacker.
• A 32 kg electronic scale totally eliminating manual recordings of our eight (8) user
departments with the capability of printing out each department's postal usage when required.
A high level electronic security scale which forces the "new" user to enter their own
password. The postage meter will not activate for use until a "valid department" is entered
by an operator.
• An upgraded inserter and a feeder and folding system which has been overhauled to today's
standards which should minimize future maintenance.
For the information of Council over the first four (4) years of the lease contract, which expired
April 31, 1995, the lease cost per month was $856.00 plus taxes and for the last year of the contract
was $1,277.00 per month plus taxes,with the addition of an inserter being added to the equipment
lease in the last year of the lease.
The lease cost for a three(3) year period including maintenance,meter rental and rate pak insurance
for a new mailing system and upgrades of our existing equipment as outlined in Option 2 will be
$1,444.25 per month with a savings of $132.27 per month over the existing lease which included
maintenance and meter rental in the amount of $1,576.52.
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The cost of leasing directly from Friden Neopost for Option 2 would be $1,082.75 per month at
approximately thirteen percent (13%) financing. The cost of leasing from Municipal Leasing for the
same equipment would be $1,055.50 per month for a saving of $27.25 monthly and a total saving
of $981.00 for the thirty-six (36) month period.
Accepting the Friden Neopost quotation for the mailing equipment rather than the Pitney Bowes
mailing equipment will provide the municipality with the lowest overall cost and a mailing machine
with an electronic scale with security features which is not available from Pitney Bowes. Pitney
Bowes is unable to upgrade the existing Friden Neopost equipment.
Friden Neopost has provided excellent service and equipment to the municipality in the past five
(5) years.
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The funds required for the mail processing equipment will be drawn from the Capital Lease Account
7007-X-0520,as provided in the Draft 1995 Capital Budget as reflected on page 11, Item A, for the
lease payments of the mailing processing equipment and are within the $20,540.00 allocated.
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TR-46-95 Page 5
For the information of Council, the lease cost in either option, is fixed for the thirty-six (36) month
term of the lease. However, the cost of the service contract for the equipment, meter rental and rate
pak insurance are adjusted annually in accordance with inflation.
In view of the type of equipment and the fact that there are only two (2) known vendors servicing
Durham Region who can supply all the necessary equipment, it is requested that the procedures set
out in the Purchasing By-Law #94-129, Section 5, Paragraph 5.04 be waived, for this particular
transaction, which eliminates the tendering procedure.
After review and analysis of the equipment,by both the Purchasing and the Clerk's Department,staff
recommend acceptance of the proposal from Friden Neopost, Option 2,for the mailing machine and
upgrades and that they be leased through Municipal Leasing.
Respectfu submitted, Reviewed by,
Ma-file A. Marano, H.BSc., A.M.C.T., W.H. Stockwell,
Treasurer. Chief Administrative Officer.
MM/SS/hjl
Attachments
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ifSCHEDULE "A"
F R I D E N
ne ® post
20 Dovedale Court
Scarborough,Ontario M 1 S 5A7
Tel.: (416)298-2100
Fax: (416)292-0364
May 30, 1995
The Corporation of the Municipality
of Clarington
40 Temperance Street
Bowmanville, Ontario
L 1 C 3A6
Attention: Shirley Stewart
Dear Shirley,
The following information has been updated for you as requested. Effective June 1, 1995
'SECURITY"MAC 3 SYSTEM AND CONFIGURATION
Model SM-94 Heavy Duty Mailing System
Model 8870 - 32 kg Electronic Scale
Model 8854 Electronic Interfacing
Model 8888 Special Riser Support for Scale and Printer
MAC 3 Mail Accounting System with "Valid Depts.)
Model 9412 Conveyor Stacker
Special discounted costs to the Municipality included.
Purchase cost - $16,164.00
Option 1
36 month lease term (15% purchase option) - $539.34 / month
1st & last quarterly payments in advance.
Model 9575 Accounting Meter - $61.75 / month
Maintenance on above system - $100.00 / month
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vF R I D E N
IlE`0 1)05 �
Option 2
All equipment quoted, plus new, heavy duty IN26 Production Inserter with "Preset" job
functions. Friden will overhaul existing folding / inserting system with peripherals at no
extra charge and warrant for a full 5 year period when placed on maintenance.
Total cost - $32,450
(The above includes the automatic power stacker and special riser, as quoted).
(Friden will sign over the existing burster, Model 970 and furniture to the Municipality,
eliminating any "buy-out" costs. Maintenance on the Burster is $28.00 / month and not
$28.75 / month).
36 month lease term (15% purchase option) - $1,082.75 month
(1st & last quarterly payments in advance)
Model 9575 accounting meter - $61.75 month
Maintenance on all the above - $274.50, month
(Shirley, please note that the maintenance quoted ($274.50 / month) includes all the F/I
peripherals and not just the IN2B Inserter.
Shirley, if you have any further questions, please call me directly.
Sincerely,
FRIDEN NEOPOS
arnet Reid
National Sales Manager
730
SCHEDULE "Bit LEASE CONTRACT
LESSOR: MUNICIPAL LEASING
Municipal Financial OR The Municipal �� The Municipal Savings& CLIENT NO. .
Leasing Corporation Trust Company Loan Corporation LEASE NO.
whichever executes this Lease Contract,below,as Lessor PLEASE REFER TO THESE NUMBERS
7100 Woodbine Avenue,Suite 400,Markham,Ontario L3R 5J2 Telephone:(905)946 2155
QUANTITY EQUIPMENT DESCRIPTION(include Make,Model and Serial No.)
As per the Attached Schedule A
EQUIPMENT LOCATION:Lessee address below or[specify]
SUPPLEMENTAL PROVISIONS OF THIS LEASE CONTRACT(if any):
SUPPLIER
TERM(No.of 36 NO.OF PERIODIC RENTAL 36 PMTS WILL BE MADE IN ADVANCE PERIODIC RENTAL GST' PERIODIC RENTAL
Complete Months) PMTS DURING SAID TERM MONTHLY 11 QUARTERLY J AMOUNT Exclusive of Taxl05 5•50 PST PAYMENT* 1153.83
Based on current taxes and tax rates.[Sales Tax Exemption Certificate required if sales tax exemption is claimed.]
TERMS AND CONDITIONS OF LEASE CONTRACT-ADDITIONAL TERMS AND CONDITIONS ON THE REVERSE SIDE HEREOF FORM PART OF THIS LEASE CONTRACT.
1. TERM. THIS LEASE CONTRACT("LEASE")IS NOT BINDING ON LESSOR UNTIL SIGNED PERFORM AS INTENDED BY LESSEE AND/OR TOTALLY FAILS TO FUNCTION OR PERFORM
BY LESSOR. Lessee agrees to lease the property described above and all accessories supplied OR IS OR BECOMES UNSATISFACTORY OR UNACCEPTABLE TO LESSEE FOR ANY
therewith(the'Equipment")on the terms set forth in this Lease. The term of this Lease('Term") REASON WHATSOEVER LESSEE(a)will look to Lessor only for co-operation in the
begins on the date the equipment is shipped to Lessee.Unless sooner terminated by Lessor,the enforcement of any warranty obligations of manufacturer or supplier,and(b)AGREES THAT
Term will end after try number of months specified above from the date the Term commences; SUCH EVENT OR EVENTS DO NOT CONSTITUTE A BREACH OF THIS LEASE BY LESSOR.
provided,however,that if the Term commences on OTHER THAN the 1st day of a month,the Term LESSEE'S SOLE REMEDY(IF ANY)SHALL BE AGAINST MANUFACTURER OR SUPPLIER
shall be extended to the last day of the month in which the Term would otherwise expire. DIRECTLY AND NOT AGAINST LESSOR.This Lease may be amended only in writing,signed by
'Termination Date"means the date on which the Term ends,according to this Section. Lessor and Lessee. LESSEE ACKNOWLEDGES THAT NEITHER THE SUPPLIER NOR ANY
2. PAYMENTS. Lessee agrees to pay rent as follows:(a)if the Term commences on other than the SALESPERSON,NOR ANY BROKER OR OTHER INTERMEDIARY,IS AN AGENT OF LESSOR
1st day of a month,Lessee will pay pro rata rent from the date of shipment to the end of the month in AND THAT NONE OF THESE HAS ANY AUTHORITY TO ALTER OR WAIVE ANY PROVISION
which shipment took place and(b)the Periodic Rental Payment("Rental")for the first complete OF THIS LEASE OR TO BIND LESSOR IN ANY WAY and Lessee represents and warrants that no
calendar period of th e Term when Lessee executes this Lease;and(c)subsequent Rentals in such person purported to act as Lessor's agent.
advance on the 1st ray of each calendar period of the Term. Lessee shall make all payments at 5. LOCATION AND USE. The Equipment shall be located at the place designated above
and
Lessors office shown above,or as Lessor specifies in writing.Lessor's invoice is NOT a condition of not elsewhere without the prior written consent of Lessor,which consent may
be arbitrarily withheld.
Lessee's obligation to pay Rentals and/or interest charges when due. Lessee's obligations under Lessee agrees to use and operate the Equipment in a careful and prudent manner and
in compliance
this Lease shall be absolute and unconditional under all circumstances whatsoever and, with all supplier's and/or manufacturers recommendations,and not for any unlawful purpose.Lessee
without limitation,ALL AMOUNTS PAYABLE HEREUNDER ARE AND WILL CONTINUE TO BE shall cause or permit the Equipment to be maintained and operated,at Lessee's expense,by
PAYABLE IN FULL. WITHOUT ABATEMENT, DEFERMENT OR SET-OFF WHATSOEVER, competent and qualified personnel only.Lessee represents that the Equipment will be used for
REGARDLESS OF ANY CLAIM OR DEFENCE WHATSOEVER WHICH LESSEE MAY AT ANY business purposes only.
TIME HAVE AGAINST LESSOR,SUPPLIER,MANUFACTURER OR ANY OTHER PERSON. Any 6. COMPLIANCE WITH LAWS;ENCUMBRANCES;TAXES. Lessee,at its expense,shall(a)
amount not paid when due shall bear interest from its due date until paid at an annual rate of comply with all laws,present and future,relating to this Lease and/or the Equipment,its
ownership,
interest equal to 24 percent per annum,calculated daily,and payable monthly on the first day shipment,delivery,installation,inspection,possession,operation,maintenance,condition,and/or
f each month,before and after any termination of this Lease and both before and after Default storage;and(b)keep the Equipment free and clear of all Liens;and(c)pay all license,registration
:ndrorjudgment. and other fees and all sales,use,property,goods and services and other taxes,levies,duties,
3. NON-CANCELLABLE LEASE. EXCEPT AS EXPRESSLY PROVIDED HEREIN,THIS LEASE assessments and charges,including any increases therein and/or those hereafter imposed,("Taxes")
CANNOT BE RESCINDED OR TERMINATED. payable directly or indirectly in respect of(1)this Lease,(ii)any payments under this Lease,or(iii)the
4. ENTIRE AGREEMENT, NO REPRESENTATIONS OR WARRANTIES. THIS LEASE Equipment,its purchase,sale,ownership,repair,servicing,use,operation,or otherwise related
CONSTITUTES THE ENTIRE AGREEMENT BETWEEN LESSOR AND LESSEE. LESSEE thereto,and whether Taxes are levied against Lessee,Lessor or the Equipment and regardless of
ACKNOWLEDGES THAT THERE ARE NO INDUCEMENTS, REPRESENTATIONS, how any Tax is designated.
AGREEMENTS,WARRANTIES, CONDITIONS,OPTIONS OR TERMS,ORAL OR WRITTEN, 7. TITLE. Title to the Equipment shall at all times remain in Lessor and Lessor shall retain all the
EXPRESS OR IMPLIED,STATUTORY,COLLATERAL,CUSTOMARY OR OTHERWISE OF ANY benefits of ownership.Lessee shall have no right,title or interest(legal or equitable)in or to the
KIND WHATSOEVER,MADE OR GIVEN BY OR ON BEHALF OF LESSOR OR OPERATING IN Equipment other than,conditional upon Lessee's compliance with this Lease,the right to
FAVOUR OF LESSEE WITH RESPECT TO THE EQUIPMENT(including,without limitation,its possess and use the Equipment. Lessee shall not,and shall not purport to(i)sell,transfer,sublet,
condition,capabilities,use,operation,fitness for any particular purpose,conformity to or create any Lien upon the Equipment;(ii)permit any third party to possess the Equipment or
permit it
sample or specifications,durability,quality,merchantability,design,freedom from Liens,or to be placed in jeopardy of confiscation or seizure or in any manner deal with it or permit
it to be dealt
compliance with the requirements of any law,purchase order or contract)or any other matter with so as to possibly defeat,prejudice or impair Lessor's rights or interest therein.
Lessor may
whatsoever,other than as may be expressly stated in this Lease. Lessee acknowledges(a) substitute similar equipment,in comparable condition,for the Equipment.
that it alone has selected the Equipment and the supplier;and(b)that Lessor is not an agent g• ACCESSORIES AND ADDITIONS. Any additional equipment or accessories installed in or
upon
of manufacturer or supplier.THE SOLE OBLIGATION OF LESSOR UNDER THIS LEASE IS TO the Equipment will immediately form part of the Equipment and belong to Lessor.
PERMIT QUIET POSSESSION OF THE EQUIPMENT ON AN"AS IS"BASIS AS LONG AS NO g, RISK;MAINTENANCE AND REPAIR. LESSEE ASSUMES ALL RISK OF LOSS,LOSS OF USE,
DEFAULT HAS OCCURRED. Lessor will give its reasonable co-operation to Lessee to assert,at THEFT OR DESTRUCTION OF OR DAMAGE TO THE EQUIPMENT without regard to culpability or
Lessee's expense,Lessor's rights under any manufacturer's or supplier's warranties and will assign cause. Lessee agrees,at its expense,to maintain the Equipment in good repair,condition
and
to Lessee such warranties(to the extent assignable).IF THE EQUIPMENT IS NOT PROPERLY appearance(reasonable wear and tear only excepted)and so as to maintain in effect any
INSTALLED AND/OR IS NOT,OR DOES NOT FUNCTION OR PERFORM,AS REPRESENTED warranties,and to furnish all parts,components,mechanisms,("Parts")supplies,servicing and
OR WARRANTED BY MANUFACTURER OR SUPPLIER AND/OR DOES NOT FUNCTION OR repairs required.Lessee expressly assumes the risk of obsolescence and the risk that Parts and/or
THE UNDERSIGNED ACKNOWLEDGES HAVING READ THE ENTIRE LEASE AND ACCEPTS THE TERMS AND CONDITIONS THEREOF.
FULL LEGAL NAME(S)OF LESSEE(S) The Corporation of the Municipality of aring on
ADDRESS(INC.CrTY/TOWN) 40 Temperance Street Bowmanville, On. POSTAL CODE
PERSON TO CONTACT Shirley Stewart TITLE Purchasing Asst TEL..R°eACOne05-623-3379
k UffNICIPAL FINANCIAL LEASING CORPORATION, G S T Reg.#Rt038o3946 The undersigned affirm(s)that he/she is(they are)duly authorized to
P ACT.
BY: TITLE
/tratwnzed Signature` IbR TITLE:
THE MUNICIPAL TRUST COMPANY G.S.T.Reg:#R11322615125 Authorized Signature
r
BY:
&dhodzed Signature �R
THE MUNICIPAL SAVINGS&LOAN CORPORATION $ G s T Reg:#R1293905s-,' LESSEE PLEASE NOTE: Co-lessees(if any)are jointly and severally
BY `t liable. Neither supplier nor Lessor is agent of the other. Lessee cannot
a,modzedsl nature s., el this Lease. Please read this Lease before you sign it.
[Shaded areas are for Lessor use only) - � LC 0900 01/95 REV.
%100 Woodbine Avenue,Suite 400 j� Telephone:(905)946-2155
Markham,Ontario OR SJ2 fox No.:(905)07*82
MUNICIPAL LEASING
Since 1983
Schedule "A"
This is Schedule "A" to a Lease Contract entered into between MUNICIPAL FINANCIAL
LEASING CORPORATION or THE MUNICIPAL TRUST COMPANY or THE MUNICIPAL
SAVINGS & LOAN CORPORATION, whichever executes the Lease Contract, (as Lessor)
and
The Corporation of the Municipality of Clarington
(as Lessee).
Quantity Equipment Description Serial Number Model Number
1 "SECURITY" MAC 3 SYSTEM AND C011FIGUARATION Comes With
1 Heavy Duty Mailing System SM-94
1 32kg Electronic Scale 8870
1 Electronic Interfacing 8854
1 Special Riser Support for Scale
& Printer 8888
1 Conveyor Stacker 9412
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1 New Heavy Duty IN213 Production nserter
1 Two Station Transport Unit TR20
1 STD. Fold Unit F010
3 Fully Automatic Feeders
1 Transport EXT. Unit - ADD
NAME (S) OF LESSEE (S) The Corporation of the
Municipality of aring on
B
(AL�horized Signature(s))
Each copy must be signed as an original
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GoodTeopfe,Striving far Exceffence...Together
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_)444!�_
Mary Woodbine Avenue,Suite 400 c Telephone: (416)480-2377�� Fax No.: (,4 16)480-2366
Markham,Ontario L3R 5.12 n Toll Free: 1-800-465-4591
MUNICIPAL LEASING Fax Toll Free: 1-800-463-5726
Since 1983
8 JUNE 1995
THE CORPORATION OF THE
MUNICIPALITY OF CLARINGTON
40 Temperance Street
Bowmanville, Ontario
L1C 3A6
Attention: Shirley Stewart-Purchasing
RE: Mailing System Equipment., for full description see Schedule 'A'
This letter is to confirm that, after The Corporation of the
Municipality of Clarington has made 36 payments of $ 1,055.50 & pst &
gst, we undertake to sell the attached equipment description to you
for Fair Market Value, not to exceed 15% of $ 32,450.00 & pst & gst.
Provided that at that time, all arrears or other charges incurred by
the lessee, have been paid.
Yours very truly,
MUN IPAL LEASING
Stephanie Mayo
Regional Sales Manager
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