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New 2022 capital purchases approved by M.D. council

Posted on December 22, 2021 by Taber Times

By Cole Parkinson
Taber Times

As 2022 approaches, the Municipal District of Taber has called on Santa a few days early as they approved several new capital purchases for the new year.

During council’s regular meeting on Dec. 14, three capital purchases and a surplus equipment sale was brought forward for council decision.

The first on the agenda was the purchase of a new loader. Finning provided a quotation for a Caterpillar 966 loader through the Sourcewell program of $570,595 plus GST — the M.D. had budgeted $600,000 in their 2022 capital budget. The machine also has a seven-year, 8,000-hour warranty.

“In front of you is the start of our purchases for the 2022 season. All of this will be invoiced for 2022, so none of it will affect the 2021 budget at all,” explained Stu Weber, director of Public Works. “I simply want to get some equipment signed for so that we can hopefully see it in a decent time in the new year.”

With the purchase recommended to go through the Sourcewell program, administration further explained what it was.

“The first one is the 966 loader for the crusher that we talked about during the budget deliberations. The main thing I wanted to go through was to make sure everybody was comfortable with the Sourcewell program. My proposal in front of you is that we purchase through the Sourcewell program,” continued Weber. “Sourcewell is a Rural Municipalities of Alberta sponsored program for cooperative purchasing that has completed all of the tendering requirements for rigorous competitive bid process and that can be used by other governments, and therefore it satisfies all of our requirements through the MGA. Basically, it allows us to go directly to the manufacturers that we want to purchase equipment from them and buy the equipment we need.”

Weber also explained local dealers can go through the Sourcewell program as well.

As far as why the M.D. was looking for a new loader, it was explained the old one had experienced quite a few issues and had been down for a few weeks in 2020 and 2021. With the warranty expiring in 2022, administration decided to replace the old unit.

Council asked how often the new loader would be used.

“I’m expecting that machine, if it’s running the whole time, to see about 1,200 hours a year on it. We’ve knocked the crusher back to one shift. When I came here, the crusher was working on two shifts, so the loader was seeing lots more hours. It seems like we’re kind of levelling off, so I think 1,200 is what we will see on an annual basis. So I think we’ll be real close on that seven-year, 8,000.”

A motion to approve the purchase was approved unanimously.

Administration also brought up how to deal with the old loader.

“I was discussing with Finning, they made a couple of different suggestions or offers and that’s why I wanted to bring it in front of council. They did offer us a straight trade-in value of $146,000 for our current loader. I think there’s more value in it than that for the M.D., but it’s a no-risk that comes straight off our purchase price and it is what it is,” stated Weber.

“One of the other offers or options they gave us, and there are other options too, but it was to cosign with them. I’ve been looking online at these HL975s, a lot of them are in the condition that our loader is and in that $235,000-$240,000 range. So, I was thinking if we were in that $225,000 range, you pay your 10 per cent commission, you have full control on that sale the whole time, so it’s not a crapshoot. Numbers come in you can make a decision yay or nay. We do have that control with the open tender, we probably won’t see that kind of value and at the auction, you take what you get on that day,” added Weber.

With a few different options, administration gave their recommendation to council.

“My recommendation is to cosign that machine with Finning for $225,000 with the 10 per cent commission. It puts just over $200,000 back in our pocket and can be used in the future towards new equipment,” said Weber.

A motion to approve cosigning the old loader was carried unanimously by council.

The final purchase proposal brought forward was for two new graders. Administration provided a quote of two Caterpillar 150 graders from Finning through Sourcewell for a total of $1,139,200 plus GST.

The M.D. had budgeted $1.2 million for the purchase of two new graders and the units come with a seven-year, 9,000-hour warranty.

“Similar to the loader except for this time we have two graders. I was hoping to run these through the Sourcewell program as well. The last couple of years we bought CAT 150s, we’ve had a lot of success and I’ve actually had zero downtime with them thus far. We’ve been doing regular maintenance, the guys like them and they’re performing well, so I’m very satisfied. The difference that we made this year is we went from the five-year, 7,500-hour warranty to a seven-year, 9,000-hour warranty,” explained Weber.

Council also asked about the older grader units and what would happen to them once the two new units arrived.

“So the units that will be sold — one is a 2008 and the other is a 2013 or 14. They will just be surplus auction, the same way we sold them this year,” responded Weber.

A motion to approve the purchase of the two Caterpillar 150 graders from Finning was carried unanimously.

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