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Agenda Item 11.
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| City Council Meeting |
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| Subject: |
| Lease and Maintenance of Digital Printing/Copying Equipment |
| RECOMMENDATION |
| Authorize the Purchasing Agent to execute the lease and maintenance agreements with the Xerox Corporation for a total of $129,520.80 based on a 60-month lease of digital printing/copying equipment plus as-needed print charges of $27,434.25 per year, and to issue annual purchase orders based on available budget appropriations. |
| BACKGROUND/DISCUSSION |
The City's reprographics services utilize digital printing/copying equipment (equipment) to facilitate its printing and copying requirements. This equipment prints about 2.1 million pieces per year of color brochures, business cards, catalogs, event programs, invitations, postcards, presentation documents, and more for the City and its client agencies.
Since the lease for this equipment will terminate in December 2017, staff reviewed its needs; sought a variety of proposals from the Xerox Corporation (the current vendor), which were based on a competitively bid National Joint Powers Alliance (NJPA) cooperative purchasing contract; and visited a nearby city for equipment demonstrations.
The scenario that best meets Brea’s current print production requirements and provides significant cost savings was to return one of the two black and white units to Xerox at the end of the lease due to underutilization; re-lease the remaining black and white unit; and lease a new replacement color unit that prints 45% faster, handles heavier paper stock, and prints double-sided.
The proposed equipment, maintenance, and supplies, excluding paper, is $25,904.16 annually. These types of leases also include a per page print charge, which is in addition to the equipment lease and maintenance charges. Based on the fixed meter rates and an estimated annual volume of 2.1 million prints, the print charges would be about $27,434.25 annually for a total cost of $53,338.41. The summary below provides the current costs, projected costs, and projected savings.
Current
Annual Costs |
Projected
Annual Costs |
Projected
Annual Savings |
Projected
Five-Year Savings |
| $84,131.53 |
$53,338.41 |
$30,793.12 |
$153,965.60 |
The lease and maintenance terms allow for the agreements to be terminated, with a 30-day notice prior to the beginning of each fiscal year, should the City’s printing needs change.
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| COMMISSION/COMMITTEE RECOMMENDATION |
| The Finance Committee reviewed staff’s recommendation at their December 12, 2017 meeting and recommended to proceed. |
| FISCAL IMPACT/SUMMARY |
The reduced costs, faster output, and enhanced capabilities will help Brea continue to provide excellent reprographic services for the City. The new lease will result in a projected savings to the General Fund of $153,965.60 over the five-year agreement. To maximize these savings, staff reviewed and adjusted its requirements in coordination with last-minute special discounts offers made by Xerox that will expire December 31, 2017.
The Fiscal Year 2017-18 budget has sufficient funding available in the Administrative Services Department's Purchasing Division Account (110-14-1441-4253). |
| RESPECTFULLY SUBMITTED: |
William Gallardo, City Manager
Prepared by: Neil Groom, Procurement and Contracts Administrator
Concurrence: Cindy Russell, Administrative Services Director
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