HomeMy WebLinkAboutTR-90-91 TOWN OF NEWCASTLE
yt REPORT
File # 190
Res.
By-Law #
MEETING: GENERAL PURPOSE AND ADMINISTRATION COMMITTEE
DATE: October 7, 1991
REPORT #: TR-90-91 FILE #:
S[JB.ECT: PROPOSED PHOTOCOPIER LEASE - PLANNING DEPARTMENT
RECOMMENDATIONS:
It is respectfully recommended that the General Purpose and
Administration Committee recommend to Council the following:
1. THAT Report TR-90-91 be received;
2 . THAT Council accept the written proposal (Schedule
"A" ) from O.E. Oshawa Inc. , Oshawa, Ontario, to lease
one ( 1) only Canon NP8530 with twenty (20) bin sorter
at a quarterly cost of $2,546 .55 plus taxes, for a
period of forty-eight (48) months with a fifteen
percent ( 15%) buyout option (of original purchase
price) upon lease expiry;
3 . THAT the procedures set out in the Purchasing By-Law
#82-92, Section 5, Paragraph 06, be waived for this
particular transaction;
4 . THAT the attached By-Law (Schedule "B" ) authorizing
the Mayor and Clerk to execute the Agreement be
approved;
5 . THAT in accordance with Section 64 of the Ontario
Municipal Board Act, authorization be obtained from
the Ontario Municipal Board prior to the execution
of this Agreement; and
6 . THAT the funds be drawn from the appropriate 1991
Planning Department Operating Account #7702-X-0224 .
Page - 2 -
TR-90-91
PROPOSED PHOTOCOPIER LEASE - PLANNING DEPARTMENT
BACKGROUND AND COMMENT:
In March of 1987, the Town of Newcastle entered into a lease
agreement with Office Equipment Inc. , Markham, Ontario, for a
Canon Model NP8070 photocopier as required by the Planning
Department. This agreement was for a seven (7) year term which
expires June 11, 1994 . At that time a letter of guarantee was
provided by the Sales Manager of Office Equipment Inc . that would
allow the Town of Newcastle the ability to upgrade the Canon
equipment during the term of the agreement at no penalty, if the
NP8070 did not fulfill the requirements . A copy of the guarantee
is attached marked Schedule "C" .
The Model NP8070 does not offer duplexing and is limited in its
reduction ratios . As these two (2) features have become a
necessity for the users of the copier, staff must constantly go
to another department, such as Public Works or Treasury, for the
photocopies required. Subsequently, the Model NP8070 no longer
meets the requirements of the Planning Department.
Subsequent to the original agreement in 1987, the dealership for
Canon products for the Durham Region area has changed. The Town
of Newcastle's account is now handled by O.E. Oshawa Inc . while
the subject firm have provided excellent service, they found that
they were not in a position to honour a warranty that was
provided by another dealer. After several months of negotiation
and numerous letters and telephone calls, between the Town's
Purchasing and Supply Agent, O.E. Oshawa Inc. and Office
Equipment Inc. , a favourable proposal has been received. O.E .
Oshawa Inc . , in conjunction with Office Equipment Inc. , Markham,
have agreed to honour the original guarantee provided in 1987 .
As the guarantee provides that the equipment may be upgraded,
there is no penalty to break the existing lease agreement.
However, a new lease agreement for the proposed NP8530 is
required.
A comparison of cost between the existing NP8070 and the proposed
NP8530 is as follows:
Present Operating Costs - Model NP8070 - 7 year lease (84 months)
Service No Charge until 1,000,000 copies expires
(current reading approx. 800,000)
(upon expiry $ .008/copy)
Toner No Charge ($281. 37 per quarter upon expiry of
1,000,000 copies)
Rental $1,902 . 00 per quarter
Total Cost $1,902 . 00 per quarter = $634 . 00 per month
/ () 6
Page - 3 -
TR-90-91
PROPOSED PHOTOCOPIER LEASE - PLANNING DEPARTMENT
Proposed Operating Costs - Model NP8530 - 66 month lease
Service No Charge for 250,000 copies
(upon expiry $ . 008/copy)
Toner No Charge ($281. 37 per quarter upon expiry of
250,000 copies)
Rental $2 ,083 .77 per quarter
Total Cost $2,083 .77 per quarter = $694.59 per month
Proposed Operating Costs - Model NP8530 - 48 month lease
Service No Charge for 250,000 copies
(upon expiry $ .008/copy)
Toner No Charge ($281. 37 per quarter upon expiry of
250,000 copies)
Rental $2 ,546 .55 per quarter
Total Cost $2 ,546 .55 per quarter = $848.85 per month
Summary: Upgrade cost for NP8530 on a sixty-six (66) month lease
is $60 .59 per month.
Upgrade cost for NP8530 on a forty-eight (48) month
lease is $214. 85 per month.
Note: The above prices do not include the Provincial Sales Tax
or the Federal Goods and Services Tax which are applicable.
For the information of Council, the outright purchase of the new
equipment versus leasing is as follows:
Outright Purchase $ 29,549 .50 + Service Cost + P.S.T. + G.S.T.
Lease $ 848 .85/month ($2,546 .55/quarter)
48 month term
$ 40,744 . 80 + Service Cost + P.S.T. + G.S.T.
For comparison purposes, the selling price of the existing Model
NP8070 was $32,000. 00 plus P.S.T.
A forty-eight (48) month term lease agreement is proposed for the
following reasons:
a) Should it become evident that the photocopier no longer
meets the needs of the user, alternate equipment can be
negotiated and a new lease agreement entered into.
0)
Page - 4 -
TR-90-91
PROPOSED PHOTOCOPIER LEASE - PLANNING DEPARTMENT
b) A sixty-six (66) month term has become unrealistic in that
in most cases the user needs have usually exceeded the
equipment's capabilities within forty-eight (48) months .
This therefore makes it very expensive to upgrade the
equipment as the outstanding term of the lease must be
bought out.
c) Warranty guaranteed for term of lease including replacement
for non-serviceability.
d) Technology is changing rapidly. Leasing arrangements allow
upgrades to meet needs of Corporation more efficiently.
The proposed Model NP8530 offers the following benefits:
- faster copy speed
- automatic duplexing (allows two sided copies, thereby
reducing paper usage)
- variable magnification (reduction and enlargement
in 1% increments)
- increased administrative productivity of office staff
due to accessibility of photocopier.
A copy of the proposal received from O.E. Oshawa Inc. is attached
marked Schedule "A" .
Note, this proposal is consistent with the previous standardi-
zation on photocopiers within the Municipal offices. In view
of this, as well as the fact that this proposal is based on a
written guarantee offered by the distributors of Canon products,
tendering for this purchase is not possible. Subsequently, the
procedures set out in the Purchasing By-Law #82-92, Section 5,
Paragraph 06, must be waived for this transaction.
Although the Planning Department has not had the opportunity to
use the proposed NP8530, it is very similar in features to the
Model NP8580 currently used by the Clerk's Department. Staff are
confident that the equipment will adequately meet the needs of
the Planning Department. There are sufficient funds available in
the 1991 Planning Department operating budget to accommodate the
increase lease cost for the balance of 1991.
Due to the prior change in dealership of the Canon products as
well as the pending administrative changes within Canon Canada,
O.E. Oshawa Inc. have indicated that this is a limited time
offer. The proposal received is a result of approximately ten
( 10) months of negotiations and has been offered at considerable
expense to Office Equipment Inc .
ors
Page - 5 -
TR-90-91
PROPOSED PHOTOCOPIER LEASE - PLANNING DEPARTMENT
With respect to additional equipment requirements and for the
information of Council, O.E. Oshawa Inc. have advised that the
photocopier located in the Mayor/Administrator's office area is
beyond repair. Subsequently, a machine has been brought in on a
no charge loan basis . Pending satisfactory performance it may be
necessary to rent the photocopier for the balance of 1991.
Sufficient funds are available in the Capital Leases Account
#7007-X-0520 . Adequate funds for a lease agreement would then be
included for consideration in the 1992 budget.
The Treasurer has reviewed the funding requirements and concurs
with the recommendation. Queries with respect to department
needs, specifications, etc . , should be referred to the Director
of Planning and Development.
After further review and analysis of the proposal by both the
Purchasing and Supply Agent and the Director of Planning, it was
mutually agreed that the proposal from O.E. Oshawa Inc. , Oshawa,
Ontario, be recommended for acceptance.
Respectfully submitted, Recommended for presentation
to the Committee,
ie Marano, H.B.Sc . , AMCT. , Lawrence Kotseff,
Treasurer. Chief A i strative Officer.
Franklin Wu, M.C. I.P. ,
Director of Planning and Development.
LAB/hjl
Attachments
SCHEDULE "A"
GE
O.E. Oshawa Inc.
580 [ling St. West
Oshawa, Ontario
LlJ 7J1
(416 ) 436-6363
September 25, 1991
The Corportation of the Town of Newcastle
40 Temperance Street,
Bowmanville, Ontario
L1C 3A6
Attention: Ms. Lou Ann Birkett
Dear Ms. Birkett,
As a fallow up to our conversation, here, is the information
requested.
The equipment quoted is the Canon NP8530. As per your original
equipment warranty the replacement is being provided at no penalty
to exit your present lease. This replacement is being offered at a
considerable expense to O.E. Markham, the original supplier. They
have consented to the replacement of the Carton NP8070 to a new
NP8530.
Talks between Canon and O.E are under way at present to move alot
of administration from O.E. to Canon Canada. This creates an
urgency about this deal because if Canon Canada is now the
administrater than Town of Newcastle, O.E. , O.E. Oshawa and Canon
Canada will have to renegotiate the present generous offer. I trust
that this deal can be expedited as soon as possible to'
give The
Town of Newcastle a new machine for the replacement of the NP8070.
Sincerely,
eve w ce
Sales/ e ral Manager
11
Einc. Equipment Company of Canada 1490 DQnlgQn StrQet,Markham,Qntarip t,.$R 9T-
11 1c. Ciri Canadirinner d'Equipement de Bureau Telephone:(416)491-M50 Fax;(416)491.9120
MONTREAL + TORONTO OTTAWA QUEBEC HAMILTON
� _�� ��� v. c• �c,nnt'tn -.-.-. tVr-M-AolLL tit){..14
Present Canon NP8070 Proposed Canon NP8530
There was a copy block of 10000,000 copies included in
the price of the original machine. The meter reading is
apprOxiamateley 795,000. The monthly volume on this machine
has been consistently 20, 000 copies. The copy block should
expire in approxiamately 3 months. The monthly operating cost on
the NP8O70 will then be $ 160.00 for toner and service.
Present Operating Costs
Service S Tnol.
Toner Tncl,
Rental 634.00
S 634.00
Psopased Operatina Costs
Canon NP8530 with 20 Bin Staple Sorter
As per the original agreement the service and toner will be no
charge for the remainder of the 1, 000,000 copy block. When we
remove the NP8070 the meter will be read and the number of copies
lees than 1 million will be credited to the new NP8530. Upon this
expiry the service rate will be 8/10 cents per copy toner not
included.
Service N/C N/C
Toner N/C N/C
Rental 848.85 694. 59
$ 848.85 (48 month Lease) $ 694. 59 ( 66 Mth lease)
At O.E. Oshawa we value your business and work very hard to
keep it, if there is anyth4-ng we can do to improve pleilse let
me know.
Cost Breakdown of Canon NP 8530
ggnon Ng 8530 $26 685.00
20 Yin sorter 2 864. 50
$29 549. 50
Leasing
48 month lease $ 848.85
( 10 t purchase option)
66 month lease $ 694. 59
( 10% purchase option)
,$.eryice
As per present agreement service and toner will be covered for the
balance of the 1 million copies per original agreement. The service
reate will then be 0.008 cents per copy toner extra.
Toner is $ 124.00 and the yield is 24 000 copies.
LESSOR
Am ASING
IN& LrAi UUU1UrAI It N()
LEASE NO
OE LoaFing,CIIVIFIon of of=inp,PCG,Box 5027,5050 South Aervinq Rpnd,Rurlington,Ontario L7R 3Y5
LESSEE
NAME.
ADDRESS + PRESENTLY LEASINO
C ?t _ll THRQU4H
P.O.Box
i CORRESPONDENCE
CITY AND PO$TAL CODE o-1 ❑ NGL NH
PROVINCE 1 I r
AND TIT TG GGNTACr C: T L.NG,(Inc,Am Code) YEARS IN BUSINESS
AND TITLE /y &W � �� � f'j�� '� 3` 3
SUPPLIER ••t��^J �} �y f (�
&118,1 Atoo Nail16.. •!. .'... .1q W.`'f`,,�Aj�• TYPE OF BUSINESS
.
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Nanx
Sala"Raprn""ntativn .. ... aJ!�'f(aey/[,C�tT��,(r�, Addrnan
LOCATION OF EQUIPMENT And rr (,nnfAC1
(if different than above)
LESSEE OWNS NAME AND ADDRESS OF LANDLORD IF EQUIPMENT It TO BE PLACED IN RENTED PREMISE$
PpEM1f3E8�
4 VANTITY EQUIPMENT pESGRIPTIGN(Incluoing M000l*no$erlpl No.(p.))
(74A,14 A/ AIPeS-30
TERM PNe MENTO LMonthly NO.OF NO,OF •]I Ralttal Am....I Prur.SNiwt,Txn � TOM R—It.1 PNy,uNw
NO.nfmpnih; WILL �/ PAYMENTS INVOICE I
AF A4A(!F pgOuarlerlY COPIES C)2
. � ❑Anlwn RF07)lly
111,110,116 Prov Bala,T4—No—It Applir.rddy
TERMS AND CONDITIONS OF LEASE ADDITIONAL TERMS AND CONDITIONS ON THE REVERSE SIDE HEREOF FORM A PART OF THIS LEASE
This Lease("Agreement")shall not become binding upon Lessor until neceptod in writing by Lessor as Fvidcncgd by the signature c a duly authorized officer of Lessor
In the spaoo¢Ybvldod billow.
LAahpr rein. InanRR In LCS6fen Inn p6rninml pnylx:lly n6rnln drnntlrrtd lull an aC:enS.;l,rlt:n rr,,pptlGd!hrarwlt l'.an.7 at.ernr.�rni:n 111<uVli,,sill I'1S1n;dn,{,II<n1 DIG
FgviptPltu it ui:+tul tiro("n nb Mlul,:eJU,.lilrvna bill
forth herein.
1. RENTAL.Lebd"e ehdll pkiy to Ledaur,dts rental R+I the Cyulpntenl,life MIVJIC lent payu+ente eat Iurth duuve.Soar real pnylventn dliall he pdyaule dt Leeaor'a treat!Ofhce ae
folinwe:firel tent pay
orient upon the oxLeutlon horao}by Laser,and zubnequeni rant paymontn in ovary cafendar month or Mhor ca ondar period,aflrr tho month of nhlpmnnt rn tho tnl of rusol7 r6Gnth pr
p«rir,d.R«111
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date of the At)rec
ulenl twmputed Ituill the ledpeutive udlex u(Buull tr_eiple kind ekild payrneni elsall Lrea:umt due and paydble olt said autual unnntwtcnuu:rt dale.If nloil9ily or uHun purinllh:wrif;d
pdyinitntl;Iru:hsdn,Pd:
C.•h81 of d HMOs cu l(taol,Leases d(llee8 lu pity Ally inCtedae in 8uuh 8elviC""'uvdldul nu818&5 Way Ale 4101666ed burl time to lime.
2, L00ATIQN AND U$F.11w Flivii)mkiin>rh"l I..e ItwMtMt1 two yeW Mt fit"piotk,tle�llyyll"IM4I IMlehi Nlttl IIL.t MI"M1Vti"'" wltl tl,rUl ill"yllul verlttwi vvtlb"tlt Uf Leb#UI,Luus"LI
tgito C.LIVM"life tt)Ulpiil"ill IV ue
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Err her buainceB pur•
pOBBB Oltly.
3. REPRESENTATIONS AND WAnRANTIES.The Leeway wdnante Il+dt ut Ole vale het of It le the owner of tho 6yulpnrnl Oce Irvin any onrutnuraocm Ail othr.•waminti ::prrraln(n0 to the
Lgluprilont
of ho operation:lint forth in the.Lrnnor'n prcn Tint.^,,Inr,truct;nn m,1nuoln nr prorr,rfuroa.F.xGGpt nil
C ;llldl11q All 151%IIQ m(}v9h ihGrein or hprr,ln l.ry !dfatrdri all w +tV 1uQgr,h to tr«EgUlprn«lil"rd Its!ki«114.
1 HL•IINDER81ON17D AQKNOM FrIRFR TO HAVF RFAD THE ENTIRF AGRFFMFNT AND ACCFPT5 THE TFRMS AND t.ptdfi+TlgNS THFRFOF
EXECUTED A$�LQSSQR: NAME OF LESSEE:..1 rR/�'G?, rr' r:t.'p�✓.ins?/ .rwc..'...,,,
OE Leasing,diVislon of OE Inc. � o�rnr.a2F". Ar;-
.................................
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The urideritlyned afflrnle that tlelehe to duly 6uthurle8d W dAiecul"th(b AGREEMENT
INrttforkett filgnrliIn........................................ .......... BY;..l......n............ ,...............TITLE;
(
TITLE: ................. ,. BY'.,.,, .....,........ ..................TITLE:...................
AuthorlroO Signature
LEASE AGREEMENT
09/26/91 12:59 $416 436 8946 0, C. OSHAWA ... NEWCASTLE X1007
OE
t_L SOR: OL Leasing, Division of OE Inc.
P.O. Box 5027
5050 South Service Road
Burlington, Ontario
L7R 3Y8
DELIVERY ANO AR INSTALLATION RECEXPT
T0: OE leasing
The undersigned Lessee acknowledges delivery and/or installation of the personal
property herein below described which is the property described in that certain
Lease
NUMBER (Insert Lessor's Purchase Order Number)
in which tease the undersigned is lessee and OE is Lessor, THE UNDERSIGNED LESSEE
ACKNOWLEDGES THAT SUCH PROPERTY (COMPLETE WITH ACCESSORIES WHERE A'PIICABLE) HAS
BEEN INSPECTED, I5 IN GOOD CONDITION, OPERATING SATISFACTORILY AND IN ALL
RESPECTS IS AS REPRESENTED AND IS ACCEPTABLE. THE UNDERSIGNED LESSEE
ACKNOWLEDGES THAT SUCH PROPERTY IS LOCATED AS REPRESENTED IN THE LEASE,
! QTY. MANUFACTURER DESCRIPTION MODEL SERIAL NO,
IF I
DATE: 19
Name of Lessee � �" .
The undersigned affirms that he is duty authorized to execute this delivery
and/or installation receipt.
BY TITLE
Ihu,t t:lu ,limill Cun : ny l 1490 0vrflz;U1 Gttvwt,MwKham.ONeftO
C �� .
TCIUI;It<.ma.:(414)491.9330 (-ax::o tri)491`i ;'H
MC)NT 1-AI. - TY:>Etcm 10 01 1 AWA HAMI ION
/ 14
SCHEDULE "C"
GE
March 24, 1987
CORPORATION OF THE TOWN OF NEWCASTLE
40 Temperance Street
Bowmanville, Ontario
L1C 1T6
Attention: Ms. Lou Ann Birkett
Dear Ms. Birkett:
Re the Ontario Municipal Board's ruling that contracts do not
go beyond the term of office of council, O.E. Inc. recognizes
the importance of this ruling and with this letter authorizes
the Corporation of the Town of Newcastle to cancel the contract
on the Canon NP 8070 installed at Hampton, Ontario. If .funds
become unavailable for this or a replacement unit,
alternatively, you may continue on at the quoted rates for the
full term of the rental. The Town of Newcastle also has the
ability to upgrade the Canon Equipment if the existing
equipment is not fulfilling the requirements during the term of
the rental at no penalty. With these options, we hope this
satisfies your file requirements.
Sincerely,
OFFICE EQUIPMENT INC.
Linda Hellens
Sales Manager
MAR 25 1967
TOWN Or N-Li V"ASTLE
PURCHASING DEPARTMENT
J,
525 Denison Street, Markham,Ont. L3R 1B8 (416)491-9330
0 E inc. Office Equipment Company of Canada MONTREAL • OTTAWA • QUEBEC TORONTO
THE CORPORATION OF THE TOWN OF NEWCASTLE
BY-LAW NUMBER 91-
Being a By-Law to authorize the execution
of a Lease Agreement with
O.E. Oshawa Inc., Oshawa, Ontario
THE CORPORATION OF THE TOWN OF NEWCASTLE HEREBY ENACTS AS FOLLOWS:
1. That the Mayor and Clerk are hereby authorized to execute,
on behalf of the Corporation of the Town of Newcastle, and seal
with the Corporation Seal, a Lease Agreement between O.E. Oshawa
Inc. and said Corporation, which is attached hereto
and marked Schedule "A".
2. That this By-Law not take effect until approved by the Ontario
Municipal Board, pursuant to Section 64(1) of the Ontario
Municipal Board Act.
By-Law read a first and second time this 15th day of October, 1991.
By-Law read a third time and finally passed this 15th day of October,
1991. . = ...............
Mayor
Clerk
I
i