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Equipment Procurement (cont 'd) <br /> spreading of compacting equipment, is from 6000 to 7500 hours . The <br /> use of the equipment thereafter would require extensive maintenance <br /> and uneconomical to own. <br /> Under the method of outright purchase and normal warranty, <br /> the buyer assumes maintenance after the 2000 hours . Usually the <br /> maintenance cost for the first 2000 is nominal. The 2000 hours , <br /> generally speaking, constitute 1/3rd of the economic life of <br /> the equipment . The maintenance cost will increase thereafter <br /> to replace the inevitable wear and tear of moving Parts . <br /> A D-8 class tractor equipped to industrial safety require- <br /> ments with suitable trash blade and air conditioning has been <br /> estimated to cost $110, 000. This is with a guaranty of 2000 hours <br /> or one year which ever occurs first . <br /> Lease/purchase for the above equipment is estimated to cost <br /> $2,250 per month for 60 months . <br /> $135,000. 00 <br /> - 1105000 . 00 <br /> 25,000. 00 <br /> Although the normal interest rate presently used in the <br /> industry is 4-1/2% bank interest , the actual rate approximates 8% . <br /> It appears that outright purchase may be more advantageous than <br /> Lease/purchase to a public agency should funding be available. <br /> Total cost bidding is a purchasing concept presently used <br /> by many public entities . Many California cities and counties, <br /> such as Bakersfield, Davis, Richmond, Palo Alto, Los Angeles , <br /> Fresno County, Kern County, Lake County, San Bernardino and Humbolt <br /> County have subscribed to this concept . <br /> Basically the concept includes with the initial price of the <br /> - 14 - <br />