Special City Council Meeting Called For Equipment Purchase, FY 2021 Audit

A special meeting of Sulphur Springs City Council has been called for Tuesday for consideration of an large equipment purchase and an audit.

Equipment Purchase

The City Council will once again be asked to consider using a Sourcewell contract to purchase a backhoe from South Star JCB. The Council also considered but opted after discussion during the regular meeting on March 1, 2022, to follow City Manager Marc Maxwell’s recommendation to put the potential purchase for the capital improvement department on hold until more research could be done to see if a less costly new option is available.

Caterpillar equipment in use for rebuilding of College Street.

City staff had proposed using $98,000 budgeted for the water distribution and wastewater collection department to buy a new backhoe. That was the amount quoted to the city during the budgeting process for the purchase. However, when the city sought Sourcewell bids in February, the cost had increased to more than $120,000. That was ruled out due to the overage. City staff then reached out to all manufacturers that have purchasing contracts with Sourcewell. The City of Sulphur Springs received three bids in response to the request sent the purchasing cooperative, as well as one for a 2019 used backhoe.

Utilities Director James Jordan after reviewing the options available recommended the City Council approve the backhoe purchase from South Star JCB for $106,953.50, Sulphur Springs Assistant City Manager/Finance Director Lesa Smith told the city board earlier this month.

Maxwell noted that the city has had fewer breakdowns since they began buying Caterpillar equipment. Because of the extended life of the equipment, and the fact that JCB is a relatively unknown company, Maxwell asked the City Council to waiting to make a decision on the backhoe purchase until city staff can come back to them with a request to increase the budget to buy a Caterpillar backhoe. Maxwell said he’d talked to the department head, who said he is fine with that recommendation.

Smith pointed out that the one amount quoted for a new backhoe from was over $120,000, while the low bid quoted for a used 2019 Caterpillar backhoe was $105,000 and the new JCB backhoe was $106,000. One of the bids only includes a 36-month 1500-hour warranty which only covers the big stuff — powertrain and hydraulics, according to city staff.

Maxwell said it’s been the city’s experience with equipment other than Caterpillar that about 15 months after purchase, the equipment begins having problems. The city manager said he was not disparaging the company, because that might not be case with their products. However, every time the city has switched from “something else to Caterpillar, we’ve been pleased with it.” He said when it comes to such a big purchase, you want to get your month’s worth for the product.

Community seating at full capacity inside the Council Chambers inside City Hall

Mayor John Sellers and Place 5 Councilman Gary Spraggins at the March 1 meeting asked about the urgency of need for the equipment, if there were projects that would be delayed if they waited a few more weeks or a month before making a decision on the purchase.

Jordan was unable to attend the March 1 meeting, but Smith said in prior conversation with him, he noted that the equipment the city currently has is starting to have some electrical issues, but there is a back up unit available if the failure escalates to total disrepair sooner than expected.

Availability of the backhoe once purchased was another factor to consider, Smith noted. JCB and Case had backhoes available on March 1, while New Holland’s projection for new equipment was 4-6 months.

“In October, Capital Construction purchased a backhoe. They got the last backhoe from Holt Cat that they had on the lot,” Smith noted.

When Maxwell said the city would be fine waiting to make the purchase, Smith said if it became necessary before the purchase can be made and is available, the department could potentially see if the capital construction is in a position to share theirs or the department could have to rent a backhoe to fill the gap.

The City Council at the end of the March 1 declined the bid proposals for purchase of the backhoe, pending further research.

During the 12 p.m. meeting on Tuesday, March 22, 2022, the purchase of a backhoe from South Star JCB via the Sourcewell purchasing co-op contract is one of two items slated for discussion and action.

2021 Audit

The other action item on agenda includes discussion and acceptance of fiscal year 2021 audit.

Sulphur Springs City Hall
Sulphur Springs Municipal Building

On March 1, Smith reported the general fund balance is currently positive and in pretty good shape, coming in fairly close to the amount budgeted. Property tax collections had also come in “about where they should be” through Jan. 31.

Sales taxes received through February were up 13.75%, a $280,000 increase over the same time last year.

Overall, department balances making up the general fund total were “right where they should be at this time.” A lot of times in the beginning of the fiscal year, expenses are top heavy at the start of the fiscal year. Any overages are mainly due to that, Smith reported. The only department that was slightly over budget was the street department, which performed some drainage work this year that they don’t normally do.

A budget amendment is expected to be presented at the next City Council meeting, allowing for two readings. This would also allow the city to catch up and include any additional items which cost more than projected due largely to inflation.

The City of Sulphur Springs at the end of February received $59,000 in American Rescue Act money last week for Sulphur Springs Municipal Airport. The funds will be reflected in the February financials, which the council should receive at the April meeting. She said when the funding reimbursement request was made, the amount requested was based on Airport salaries.

The audit the City Council is set to receive and consider accepting is for fiscal year 2021.

The special called meeting of Sulphur Springs City Council will begin at 12 p.m. March 22, 2022 in the Council Chambers inside Sulphur Springs Municipal Building (City Hall).

Sulphur Springs Municipal Building (City Hall) on Davis Street in Sulphur Springs.

Author: Faith Huffman

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