 What works meeting to order please. Let's stand for the Pledge of Allegiance. I pledge allegiance to the flag of the United States of America and to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Let the minute show that older person Donahue is excused from the Finance and Personnel Committee meeting. I think we know each everybody here so we can dispense with the introductions. And number two items for discussion and possible action. 2.1 resolution number 1719-20 December 2nd 2019 direct referral. Resolution authorizing the appropriate city officials to enter into a lease with lease servicing center incorporated to finance the purchase of garbage and recycling carts necessary for the city to transition to an automated garbage and recycling system and to authorize the appropriate city officials to purchase the garbage and recycling carts funded by the lease. And do we want David from somebody from your department want to handle the discussion or okay I guess I'll just come up here you'll be a little bit easier versus from over there since it's a committee meeting really this is just some you know formalization of the purchasing how we're going to finance the carts as well as the purchasing of the carts we've had this discussion has been at several committees already and I have Thomas from the the attorney's office who is instrumental in the actual lease document as part of the 2020 budget if you recall we went through a budget process and it was determined that entering into a lease financing arrangement for the cart purchase was the most advantageous way of excuse me financing the carts it's a it's an expensive endeavor to to supply 38,000 recycling and garbage carts it's a two million dollar purchase in a sense and the the company that we that we vetted and chose is the toad or cart that we had if you recall maybe at the old county chambers where we had the carts on display when we were going forward with the program and the proposal the toad or cart is basically the industry standard it has a 12-year warranty on it and it's got a great track record in terms of durability it's one of the only carts that use a rotational type of molding process where many of the other carts are injected molded so I guess to further give you a little bit the the carts are are competitively bid on a national contract so we were able to piggyback on this contract we've used this this it's called source well now it was formally the national joint powers alliance these national contracts were able to leverage the larger national type of contracts and get that competitive pricing at a local level of Sheboygan so we're rapidly approaching 2020 and the the trucks that we've purchased are at the manufacturer the chassis and now they're being assembled with the actual packing mechanism in the arms so we're we're getting close and before before you know it may will be here so I guess I'm happy to answer any detailed questions or if you have something more detailed in terms of leasing and contractual language if you don't mind I defer to the assistant city attorney Ryan thanks David again I have a few questions so feel free to just kind of shoot off them wherever I guess I know we briefly talked about sizes of carts there was two different sizes and I know a lot of different constituents that I've talked with you know talked about oh you know where am I going to put this we're you know are these sizes too big can I get a smaller one do you can you just kind of talk us a little bit more about that too and then I'm also curious about the how we're going to distribute these carts and then if there's any costs associated with you know distributing those and getting those to to our constituents and you know through this process if there's if there's ever been different difficulties of you know how people request you know their cart numbers and just kind of what your office and DPW if you guys have been getting any feedback and concerns to you guys and any topics like that would be awesome very good first of all there is no additional cost the cost that is part of the purchase includes setup and delivery as well as an inventory they do that okay yes so they they have a company they contract with that will come they'll come in loads roll them out and they'll be inventorying in terms of the serial number per address so we'll have a good tracking mechanism moving forward in terms of the size it was determined that for standardization go with the one size the 95 gallon size listening to the cart manufacturers what they've said is when you start offering different sizes the trend is people they think oh I don't it's too big I don't want this big big garbage can I don't have room for it and what happens is you'll have more requests to go up size in terms of they want to go to the larger because they find oh it fills up pretty quick so what we've learned from the cart manufacturer is go with the one size in the beginning and after about a three to six month trial period if it becomes a burden or if they find that it's just not doable we could entertain moving to to the smaller 65 gallon size they find that the request to go smaller is much less than the opposite direction of going from smaller to larger that's what they that's the trend we're listening to the experts they're the ones that deliver these and that's been their experience from the industry so in terms of footprint though the footprint of a 65 gallon versus 95 basically takes up the same floor space it's just when it when it goes to the height level as well as a little width it's a little bit wider at the top and a little bit taller but the bottom where it sits on the floor is virtually the same from a 95 to a 65 so that the the thought process is oh it's just too big I won't have room in in reality they're virtually the same yeah okay Ryan yeah thanks David Marcus thank you chairperson I have some questions on why you chose to lease these versus an outright purchase versus some other types of financing could you explain how that went and why we went this route I will give it my best and then I may have to defer to maybe Thomas as well as the city administrator as well as our finance director here this evening but when we looked at it two million dollars is a lot of money so it's at we've we've used some cash in for purchase of the vehicles for instance we had cash in the motor vehicle fund and we supplemented it with some borrowed funds one of the issues with terms of bonding for the carts was you know it again it would go against our other borrowing for road projects and infrastructure projects so we didn't want to take away from the capacity in other words for that type of priority within our capital improvements leasing is kind of a form of bonding or a financing so it does add to the debt but in this case given that there's a 12-year guarantee in the leases for 10 years it helps give us a steady cash flow and if you recall we generated a revenue of a four dollar per month per resident fee that we can attribute directly towards the recycling carts so that lease payment it helps for budget for the budget in terms of tracking here's this lease here's the revenue that we're receiving so cash flow wise it works really to our advantage as well thank you Betty you had a question I did not oh you came up okay Jim thank you David I think that the two million dollar figure that we've come up with here actually is a little bit less than we actually the initial estimate isn't it it is and we also within the two million we also if you recall we received about a two hundred and seventy three thousand seventy six thousand roughly two hundred and seventy we'll just round it off to two hundred and seventy thousand recycling grant that will help offset this purchase as well so that's going to be part of our initial down payment is within the lease another question is reading over the document I believe it said that after 10 years we can purchase the if we wish we can purchase the carts for was it thirty seven thousand dollars or something like that uh or did I misread that I'm going to refer to the assistant city attorney Thomas okay so one of the one of the unique features about this lease and it's it's pretty typical of a capital lease like this where the expectation is at the end of the at the end of the time period for one dollar total we will end up outright owning all of the the carts so a lot of times when you think about a lease you think about like a car lease where you're paying for the value of that car for 36 months here the lease schedule is based on the full cost of those of those carts and then the the the rest of the the title transfers at the end of the 10 years for just one dollar and then to follow up on that then at the end if we bought if we buy those those carts and they still got a couple years left on the warranty but eventually that we're going to have to replace them I guess owning those things and we want to transition to new ones let's say after the 12 year warranty what on earth are we going to do with the 37,000 carts before you know and then we're going to get the new ones uh Jason do you want to talk about cart lifespan Jason Jason will explain a little bit more about the lifespan so the lifespan will be longer typically they're seeing up to 20 years so best practices is you start after the warranty and start replacing a small up percentage of 10 percent and then go through um there's a much a larger municipality that kept deferring that and deferring that in the state and now they have carts that are 25 and 30 your age and they're going to have to replace them all at once so if we can digital deal after 15 years the 12 or 15 start replacing them in smaller amounts and then um do that over the life cycle well I want to I won't need a new cart tell them about at least 92 years old so I won't worry about it now Jason let's hope I make it that long it'll be good I believe total carts in Detroit have been averaging over 20 years so Ryan um I know we briefly talked about replacing parts I mean sometimes wheels come off the lights might fall off do we when we're purchasing these do we get like a I don't know like a bulk set of just replacement parts or yeah I'll have carts and what I can do the body is 12 years the lid and the wheels are 10 years so you can replace some I stock the broken ones and then when I get enough I send them back and then they'll send me send me to the new ones cool thanks Marcus thank you this is a question for Thomas could you uh clarify was that a dollar for 37,000 carts or a dollar per cart one dollar total for 37 for all of the carts and I think it's it's a big 37,000 carts total roughly okay thank you yep Jim I have a point of order that I want to ask the city attorney being that we're meeting as two as two committees attorney Adams does each committee have to make their own motion or do we make one motion and we all vote on it each committee would make its motion although if one committee chose to simply defer making a motion for the other that would mean one less document to deal with but I think Meredith is prepared to deal with both okay thank you because that council you're going to have to accept one and file the other okay my recommendation is that both committees would would make a motion to accept so it's on record and then in council one committee could accept it and then the other committee could accept to file if that would work right or could have fun and accept one and deny another one oh there you go that's why we don't recommend joint meetings I'm just kidding okay Jim any uh any other questions I have nothing else okay did you want um I would entertain a motion from a finance committee member I make a motion to approve Marcus you second yep we have a motion and a second from the finance and personnel committee and that's to approve the release all in favor from the finance and personnel committee I vice chair votes aye motion carries okay for public works looking I move to accept the recommendation for public works for public works thank you for that motion acceptance uh any any questions seeing none all from public works all in favor aye any opposed eyes have it all right so we have accepted on both finance and personnel and for public works I move the public works adjourn I move that finance and personnel committee adjourned second second all in favor aye aye we're both adjourned