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ADOPT RESOLUTION APPROVING FINDINGS AND AUTHORIZING THE CITY MANAGER TO EXECUTE A COOPERATIVE PURCHASE AGREEMENT FOR LEASE OF A CANON XEROGRAPHIC SYSTEM FOR 60 MONTHS WITH RAY MORGAN COMPANY OF ROSEVILLE, THROUGH THE SHASTA UNION HIGH SCHOOL DISTRICT MASTER ENABLING AGREEMENT
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution approving findings and authorizing the City Manager to execute a Cooperative Purchase Agreement for lease of a Canon xerographic system for 60 months with Ray Morgan Company of Roseville, through the Shasta Union High School District (SUHSD) Master Enabling Agreement for an estimated annual amount of $69,216.
It is further recommended that the City Manager be authorized to take appropriate and necessary actions to carry out the purpose and intent of the Resolution.
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Summary
A new Canon xerographic system is needed to continue providing dependable citywide services by the Reprographics Center. This equipment will provide imaging, copying, printing, and scanning of a wide variety of documents for the public and for the City’s operations. The City currently leases its existing equipment through an agreement with a fixed-term through April 28, 2016 and continues on a month to month basis. The monthly options are limited to12 months. After evaluating all available options, staff determined that it is most cost effective for the City to continue leasing equipment, and that the Cooperative Purchase Agreement with Ray Morgan Company (Attachment A) provides the best overall value.
DISCUSSION
Background
On December 14, 2010, the City of Stockton adopted Resolution 10-0390 to acquire a Canon high-speed xerographic system for the City’s Reprographics Center. Agreements for equipment and maintenance were executed on April 28, 2011 at a monthly cost of $7,348 ($88,176 annually). The fixed-term of the agreement expired on April 28, 2016, and is continuing under a month-to-month option that is limited to twelve (12) months per the terms of the agreement.
In procuring a new xerographic system, staff identified that SUSHD entered into a Master Enabling Agreement with Ray Morgan Company after a full bid process was conducted. This cooperative structure permits state and local governments to take advantage of existing competitively-solicited purchasing contracts (Attachments B, C and D) without incurring the expenses and time associated with the bid process.
Present Situation
Currently, the City's Reprographics Center annually produces an estimated 2.7 million copies utilizing a Canon, high-speed black/white and color xerographic system. Printing projects dependent on the xerographic system include:
• Council agendas
• Staff reports
• Budget documents
• Year-end consolidated financial reports
• Public safety publications
• Schedules of events
• Requests for proposals
• Human Resources bulletins and related documents
• Utility billing inserts
• San Joaquin and Flood Control Agency agendas, and
• Environmental Impact Reports
During the last twelve months, Reprographics Center staff solicited information from the manufacturers of high-speed xerographic systems meeting or exceeding the specifications of the City’s current system. The resulting three systems, Canon, OCE, and Ricoh, have similar features but varying degrees of quality and efficiency. Staff conducted a complete review of the City’s requirements and observed each system in operation. The Ricoh system demonstrated poor print quality, and was too slow for the complex jobs produced in the Reprographics Center. Both the Canon and OCE systems have features that meet current production needs, including user-friendly software and excellent print quality.
A summary comparison of the three models and five (5) year cost is outlined in the table below:
|
Manufacturer |
5-Year Cost |
Functionality |
|
OCE |
$ 473,280 |
Meets current production needs. Fastest print speeds. |
|
Canon |
$ 346,080 |
Meets current production needs. Similar to OCE. |
|
Ricoh |
$ 185,220 |
Slow and unsatisfactory print quality for current central production type jobs |
Although the OCE is a faster system, the Canon xerographic system was determined to be the best value for meeting the City's needs for current and improved functionality at a reasonable cost. The new system will simultaneously scan documents, accept electronic files, program jobs, and print documents. The Reprographics Center will continue to be able to:
1) run large, complex jobs, rather than use the more expensive department or convenience copiers;
2) minimize setup time in handling print jobs; and
3) enable staff to scan documents, such as the City Budget, and delay printing until the document has been approved and finalized.
The Ray Morgan Company submitted a Proposal (Attachment E) to the City and will provide a new Canon xerographic system with VarioPrint DP-135 for black and white copies and ImagePress C800 Advance for color copies along with maintenance services for 60 months at $5,768 per month. Per the proposed Cooperative Purchase Agreement, it is recommended that the City enter into the Equipment Lease Agreement (Attachment F) and Maintenance Agreement (Attachment G) with Ray Morgan Company. The projected monthly costs includes the lease of equipment, standard maintenance, and estimated overage rates.
Equipment Standard Overage Monthly
Lease Maintenance Estimate Total
$3,746 $1,795 $227 $5,768
Calculated savings through the new Cooperative Purchase Agreement compared to the existing agreement are shown below:
Annual Cost Annual Cost
Current Canon New Canon Total Savings with
High Speed System Xerographic System Annual Savings 60 Month Contract
$88,176 $69,216 $18,960 $94,800
Additionally, the new Agreement offers the following benefits:
1) lower charge per copy from $0.10 to $0.09; and
2) copy threshold increased from 25,000 to 35,000 for color copies.
Findings
Stockton Municipal Code section 3.68.070 provides for an exception to the competitive bidding requirement for purchases in cases where the City Council has approved findings that support and justify the exception. Cooperative purchasing agreements authorized by the City Council for the purchase of supplies or services through other governmental jurisdictions or public agencies is one such exception. The findings to support entering into this Cooperative Purchase Agreement are as follows:
1) The SUHSD established a cooperative purchasing agreement for the lease of technology equipment, software, and supplies on behalf of schools, agencies, and libraries after undergoing a formal competitive bidding process that sought and awarded bids.
2) The bid specifications used by the SUHSD Master Enabling Agreement were assessed considering the City’s central reprographic standards of quality and efficiency. Ray Morgan Company was selected by SUHSD as the supplier for Canon equipment.
3) The SUHSD Master Enabling Agreement is bidding primarily on behalf of educational agencies, however, the program extends the bid protections and price discounts to governments, municipalities, related county/municipal authorities, and other non-profit organizations.
It is recommended that the City participate in the SUHSD Master Enabling Agreement with the Ray Morgan Company to realize the savings achieved by entering into the proposed agreement, to save time and costs of a local bidding process, and to gain advancements in reprographics technology.
FINANCIAL SUMMARY
The estimated annual lease for equipment and maintenance with Ray Morgan Company under the SUHSD Master Enabling Agreement for the Canon xerographic system will cost $69,216. Sufficient funds are available in the Office Equipment Internal Service Fund Account Number 505-5401-571. In subsequent years, the funding will be appropriated through the annual budget process.
Attachment A - Cooperative Purchase Agreement with Ray Morgan
Attachment B - SUHSD Request for Proposal (RFP) A77-2013
Attachment C - Ray Morgan RFP Final Response
Attachment D - Master Enabling Agreement
Attachment E - Ray Morgan Proposal for City of Stockton
Attachment F - RMC Equipment Lease Agreement
Attachment G - RMC Maintenance Agreement