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Home My WebLink About25 - Disposal of Police Helicopter - 1982 MD500D0 October 28, 1996 4lgenda Item 25 CITY OF NEWPORT BEACH ADMINISTRATIVE SERVICES DEPARTMENT Resource Management Division October 18,1996 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM Dennis C. Danner, Administrative Services Director SUBJECT: DISPOSAL OF POLICE HELICOPTER -1982 MD500D DISCUSSION: —� 3v�lJ (? �' Earlier this year the City Council authorized participation in the ABLE Joint Powers Authority to provide police helicopter service to the cities of Newport Beach and Costa Mesa. As part of that program each city will dispose of a helicopter that has reached the end of its useful life without a very costly engine and main rotor mast assembly replacement. Also as part of the ABLE program, the JPA will be purchasing a new helicopter to replace the two disposed of helicopters. The City of Newport Beach 500D helicopter scheduled for disposal had an appraised value of $228,150 when it had 9,895 hours on it. Currently the helicopter has 10,359.9 hours on it and has very few useful hours left before the repairs mentioned above would be necessary at an approximate cost of $130,000. The City has received two offers for the purchase of this helicopter. The first offer was for $225,000, of which a 5% broker fee would be required. Subsequently the City received an offer of $230,000 with no broker fee requirement. Council Policy F -11 authorizes the Administrative Services Director to dispose of surplus property " ... in a manner that results in the greatest financial advantage to the City". Normal disposal procedures include: auctions, trade -ins, sales to single vendors or suppliers, or donations to non -profit organizations. In this instance, because the value of the helicopter is so large, Council approval of the disposal is requested Attached to this report is a report from the Police Department which provides background information concerning the appraisal, value, and the two offers received for the 500D helicopter. RECOMMENDATION: That the City Council authorize the disposal of the 500D helicopter to heli -mart for $230,000 which includes no broker fee. 0 0 CITY OF NEWPORT BEACH POLICE DEPARTMENT October 16, 1996 TO: CAPTAIN HENISEY FROM: SERGEANT R. OAKLEY SUBJECT: SALE OF POLICE HELICOPTER - 1982 MD500D Sir: I have received two formal offers to purchase our helicopter. Since we have not officially advertised this helicopter yet, I believe the following information is important in considering these offers. First let me explain how these offers came about. The first is from Mr. Lanny Broaders of Global Aircraft Sales. He is based out of a hangar in the Martin Aviation complex where we are based at John Wayne Airport. He heard about our helicopter being available and is familiar with its history and our maintenance practices. He told me he knew of a buyer who wanted to present an offer. Two days later Mr. Broaders forwarded the attached offer to • purchase our helicopter. The attached offer is for $225,000.00, of which Global Aircraft Sales requires a 5% fee. The second offer is from Mr. Don Nichols of Heli -mart. Heli -mart is an authorized McDonnell Douglas Parts supplier who we have done business with for years. He is familiar with our maintenance practices and particularly the reputation of Russ Eastman, the mechanic who has maintained this aircraft since we've owned it. Mr. Nichols has offered $230,000.00 for this aircraft and does not require a commission (see attached). His motivation is to assist his customer (a New Zealand based helicopter operator) with the acquisition of a good aircraft and provide parts service for it in the years to come. Mr. Nichols is also providing hangar storage for this helicopter until it is sold free of charge as a service to us. I queried two other aircraft brokers at John Wayne Airport and found that the usual rate, or brokerage fee for a used aircraft is based on the value. As a rule a used aircraft valued at under one million dollars will require a broker fee of 10% and those over one million 5 %, so Mr. Broaders fee is not out of line. We had the helicopters appraised by HeliValue$, Inc. in March of this year for the purpose of a joint power proposal for the A.B.L.E. Board of Governors. The helicopter in question is a 1982 McDonnell Douglas 500D. Aircraft appraisals differ from that of a car for example, taking into account the total number of hours the aircraft has been flown and the time remaining on components which are required to be overhauled or replaced at specific intervals. The higher the hours on the aircraft in most cases relates to a lower valuation and the lower the time remaining on specific time life components the lower the valuation. In this case we have 10,359.9 hours is SALE OF POLICE HELICOPTER`Pcontinued) • Page 2 total time and very little time left on the engine and main rotor mast. At the time of our.appraisal in March we had 9,895 hours on this helicopter and it was appraised at $228,150.00. Since we now have an additional 450 hours, $225,000.00 seems to be in line with the real market value. I researched a publication called TRADE -A -PLANE to get a feel for what other similar helicopters are selling for (see attached excerpt). In summary, the comparable helicopters I found were in a range from $325,000.00 to $350,000.00. Some were newer and some were older, but none had the high number of hours as ours does, or the high hours on the engine which in our case is in need of an overhaul. The new owner of this helicopter will have to spend approximately $130,000.00 on a new rotor mast and turbine engine overhaul. Considering the $225,000.00 offer and the $130,000.00 cost of these two components the actual value will be in the ball park of $355,000.00. The Orange County Sheriff's Department is negotiating with McDonnell Douglas for two new helicopters. They have a 1983 MD500E which they intend to trade -in for a newer model. It is one year newer than our helicopter, has 13,000 hours total time and is similarly equipped to ours. McDonnell Douglas is going to give them $169,000.00 for this helicopter on trade -in. If we wanted to market the helicopter ourselves we would incur the expense of advertising and the time it takes to deal with inquiries and offers. The cost of running an add in TRADE -A- PLANE, which is an international aircraft classified publication is approximately $170.00 per month. The Los Angeles Times is comparable to that, but offers limited exposure to a very 1 specific market. We could also do direct mailing to helicopter operators, or even consider the use of an auctioneer, or other aircraft broker at additional expense. Should we choose to pursue this option, there is no way to know what price this helicopter will bring, however it would seem reasonable to expect something in the neighborhood of the recent appraisal minus the additional time flown. I would also expect the market for this helicopter to be somewhat narrower than average due to the high time and large expense of the engine overhaul to the prospective buyer. The two offers in this case are good considering the prevailing market and the appraisal of the aircraft. Both buyers have the funds to complete the transaction quickly which eliminates any delays for financing. Obviously, Mr. Nichols offer is substantially better. Mr. Broaders offer was submitted first and as a courtesy to him, I informed him of the higher offer. He is aware of the time table and may or may not respond. Based on the above information I recommend that we accept the offer of $230,000.00 from Mr. Nichols and take the necessary steps to initiate the transaction as soon as possible. Attachments: 1. Written offer from Global Aircraft Sales. 2. Written offer from Heli -mart. 3. Appraisal from HeliValue$, Inc. • a. Helicopter Specification Sheet. 5. Clippings from TRADE -A- PLANE, September 1996 - Third Issue. a 1 -14 -96 NON 16:27 DAVIS BRO CONST, INC. FAX NO, 190994402 October 14, 1996 Global Aircraft Sales John Wayne Airport Dear Sir- I would like to make an otter on the Newport Beach Police Department's 1982 McDowell Dougless - 369D, Serial Number 1192D for the amount of $225,000.00. This offer is subject to satisfactory pre - purchase inspection and a title search. The o1Ter is good until October 22, 1996. Thank you. ,g- �--- George F. Davis P, 02 0 LJ W,pSAA @IRCRArf SAkto LANNY BROOERS GLOBAL AIRCRAFT SALES 20991 CANTEBURY LANE LAKE FOREST, CA 92630 cm I PHONE 714 -444 -1610 "FAX 714-044 -1613 • PAGER 714. 691=1166 0 L 0 h¢li -mart 3184 Airway Avenue, October 21, 1996 Sergeant Robert Oakley Newport Beach Police Department 361 Paularino St. Costa Mesa, California 92627 Dear Bob: 40 Unit E, Costa Mesa, California 92626 Heli -Mart is pleased to offer the City of Newport Beach the sum of $230,000.00 (net) for the purchase of Helicopter Serial Number 1192, a 1982 model 500D. The offer is made for this helicopter as is, where is, with no warranties or guarantees expected from the seller. This offer will remain open until midnight, October 28, 1996. If offer is accepted, a $10,000 deposit in the form of a certified check will be given while title is verified and arrangements are made for transfer of the balance of purchase price. Full payment will be made within six working days from acceptance. The aircraft is presented to Heli -Mart with the equipment and accessories listed below: Cargo Hook Rotor Brake Four Bladed Tail Rotor Facet Oil Filter Anti Ice Fuel Filter Paravion Door Actuators Extended Landing Gear ELT. Pointer model 3000 Whelen HDH -DF -28 Strobe System Respectfully, Heli -Mart, Inc. Don P. Ni President List of Avionics Bendix/King KY 196 VHF Comm Bendix /King KX155 Com/Nav Bendix/King K1209 Nav Indicator Aircom ACS 300 Audio Panel Tomorrow Aollo 604 Loran RX Tel. (714) 755 -2999 • Oulslde CA (800) 826 -6899 • Fax (714) 755 -2995 0 • • V 0 r\ LJ YJJ- YJ.� -1SSv PO Box 876, Telephone (847) March 3, logo Lt Tom Womack Costa Mesa Police Department 99 Fair Drive Costa Mesa, CA 92826 Dear Lt Wamacc; The following list of nine (9) Current Fair Market Values are submitted for the helicopters operated by the local public service/police departments coordinated by your Board of Governors. This valuation is made under the following general conditions and assumptions: , a. Each helicopter Is In 'flyable and airworthy" operating condition, with all of Its Installed equipment also fully functioning in Its proper operating condition. b. Ail of the helicopters are operated under the FAA's 'Air Twelcommercial (FAR Part 91 or equrvafenf) fright operations and maintenance procedures. c. All of the Uts/optionslaccessodes, or'permanent parts thereof, which will remain with the units rd" in fact were sold, are properly (TSO/STCIPMA) certified. Those items which are department-specific (such as the LoJack transponder and the FUR mount and camera) are NOT included in our valuation. However, "permanent portions of those kits (such as mounting brackets, wiring harnesses, cockpit switches, etc) ARE Included as they will riot be removed. d. The values are one-at- a -tirne RETAIL transactions occurring Ina `normal' helicopter resele marketplace. They are neither the'1oW or the "top" dollar which might be expected, but lather they are values which could reasonably be expected N sold by an entity which does not specialize in helicopter resales. e. The values are based on the technical specifications and installed equipment rate as given. Model: Serial #: TTAF: Value: SOOD 480291D 7,321 His. $301,430.00 ` 1192D 9,895 $228,150.00 AJ 500E 0010E 12,579 $328,840.00 ` 0011E 13,043 $310,580d0 " 0147E 12,044 $407,930.00 " 0178E 11,297 $382,870.00 ` 0321E 8,240 $323,810.00 ' 0373E 5,264 $351,470.00 NaPO 52ON LN029 2,797 $894,890.00 The formal written narrative which will fully state the "Terms and Conditions' under which we have valued these units will be forwarded shortly. Thank you for using the evaluation services of HellValue$, Inc. Sincerely; any D. esfor President HELICOPTER SPECIFICATION SHEET 0 MAKE - McDONNELL DOUGLESS 369D YEAR MODEL - 1982 SERIAL NUMBER - 1192D AIRFRAME TOTAL TIME - 10359.9 ALL COMPONENT TIMES PROVIDED ON ATTACHED SHEET This aircraft has been police service since 1987 with the Newport Beach Police Department and has been maintained to the highest standards. Exterior condition is excellent. Interior condition is good. ACCESSORY EQUIPMENT: Cargo Hook Rotor Brake Four Bladed Tail Rotor Facet Oil Filter Anti Ice Fuel Filter Paravion Door Actuators Extended Landing Gear Whelan HDH -DF -28 Strobe System AVIONICS Bendix/King KY196 VHF Comm Bendix/King KX155 Comm/Nav Bendix/King KI209 Nav Indicator IlMorrow - Apollo 604 Loran Aircom IOOF PA Control Aircom I OOF PA Speaker Aircom I OOF PA Amplifier Wulfsberg RT450 Wulfsberg RT138 Wulfsberg RT30 Wulfsberg C -1000 Controll Head #1 Wulfsberg C -1000 Controll Head #2 NOTE: Wulfsberg radios and PA System are negotiable items. is 0 QC TYPE: McD. DOUG REG. NUM.: N5283C YR. OWNER:NEWPORT BEACH POLICE TOTAL TIME:10359.9 MANUF.:1983 SER.Num.,:1192W- LAST ANNUAL:JUNE 1996 COMPONENT PARTNUMBER LIFE TIMEREMAINING O/H RETIRE O/H RETIRE PIN FOLDING-M/R 369A1004-5 7600 4840.4 =``ii-2 BLADE M/R 369D21100-517 3530 1210.2 ,BLADE M/R 369D21100-517 3530 1210.2 4 BLADE M/R. 369D21100-517 3530 1210.2.;.., . BLADE M/R 369D21100-517 3530 1210.:2 141-,.6 BLADE M/R 369D21100-517 3530 :1 A.,7- MAST ASSY M/R 369D22014 10450 90.1 : LONG. BELLCRANK �369A7301-501 6500 2636.:0 ' i�,,'-9--,DRIVESHAFT M/R 369D25510 5020 4658.3 iA.!,-,b��DRIVESH AFT T/R 369D25518 13900 3540:1 A., ".�, jM'4� COUPLING-M/T D/S 369H5660 4300 3041.1 klg'COUPLING-M/T D/S 369H5660 4300 3041.1. T-/R TRANS ASSY 369D25300-501 4800 3444.1 4�14 T/R BLADES 869D21615-21 10000 4195.8 115,T/R BLADES 369D21615-21 10000 4195.8 T/R BLADES 369D21615-21 10000 4195.8 `-117 T/R BLADES 369D21615-21 10000 4195.8 T/R STRAP PACK 369AI706-509 51p0 4430.2 P19 T/R STRAP PACK 36OA1706 -509 5100. 4439.2 ¢:20,-TAILBOOM BOLTS MS21250-0614 21950 11590.1 `, �*TAILBOOM ASSY 369D23500-505 10300 10237.6 HORZ. STAB. 369D23601-511 5135 1627.8 N2 3 VERT. STAB. 369D23600-503 7620 4861.4 ,W/R TRANS 369D25100-505 3000 1644.1 R HUB ASSY. / /R 369D21200-501 2770 2188.0., --2 RRUNNING CLUTCH 369A5350-21 1800 444.1 YR SWASHPLATE 369D27609-501 2770 2188.0 !�28 T k'SWASHPLATE LUBE 369D27609-501 2770 207.7 FAN BRGS. 369H5655-3-5 1200 139.1 36-1 ;8LWR. BELT 369D25623 1200 139.1 4 A --32 - GEARBOX EXCH 6894171 3500 140.5 F33 "COMPRESSOR EXCH 6390550 3500 140.5 '441 MINI TURBINE EXCH 6898735 1750 140.5...- 35.TURBINE ASSY.EXCH. 6898735 3500 140.5.b %-'36 FUEL CONTROL EXCH 2524644-29 2500 2138.3', -3,7�FUEL STRAINER 2539509 1500 1138.3. ,.,38 GOVERNOR EXCH 2524769-11 2000 1053.1 FUEL PUMP EXCH 6899253 4000 737.0 .39 .,4 "0 FUEL NOZZLE EXCH 6890917 2500 2740.1 `'41 BLEED VALVE 23053176 1500 1489.3, ,\-49 STARTER/GEN 23032-022 1200 440.1 43, IMPELLER .6876873 3550 190.5 JST STG WHEEL 6886407 1775 140.5 45 2ND STG WHEEL 6898782 1775 140.5 46 3RD STG WHEEL 6899373 4550 1190.5 1 ;147 4TH STG WHEEL 6853279 4550 1190.5 3afsed on the Helicoptets component records and time remaining on the life limited, parts this components are 38 % of a new helicopter. i 1349.11k N% oi Df) CiGi%{S,(r's' HUGHfS (F FACTORY NEW MD52ON aircraft: " LNOS8, new. , SIN 1-11059, yaw. SAN LN066. new.. Airsealana Hell•_ - copter Company Istanbul, Turkey. Teli +90 212. 285 -1500: FAX: +90 212 2B5 -7514, Contact:: Dennis Smith, 8 M0520N, 1992, 260TH TT, aux. IuN. wire strike; particle separator, mist eliminator, cargo hack, high skids, Tremble GPS 2000, United IVSI attitude/ direc- tional gyre. ELT. tuft 9endix King avionics, fresh arms. al, plus much more. Airsealand Helicopter Company Istanbul. Turkey. Tel: +90 212 285. 1500, FAX; +90 212 285.1514. Contact: Dennis Smith 8 FUCHS HELIKOPTER, SERVICE CENTER/ JAR 14S 8PPr. SWitXerland, Phone 41.7- 787 - 05.05, Fai 41.1. 787.05- 19.MD52ON- slorsale. 1991 SIN 0461 E. TSN550, $621,112. 1991 SIN 0467E, TSNl50, $675.337, 1995 SIN LN068. TSNSO, $868,875. f 1995 SN LN069, TSN400. $783,415. MLDcanelf Douglas MD900, Explorer farsale. 1995 SIN 0017, TSN IDD, $3,7 mil. McDonnell Douglas MD630 sale. 1997, SIN .... TSN..., $1,3 mil. R 1971 HUGHES SDDD, POWERFUL C20 engine, goo0 component times remaining. excellent paint and inred- or, fresh annual ium completed, loaded and nice, Call Lance Aviation 941, 646.1242: FAX 941. 644.0785. M EASTERN SHORE HELICOPTERS •a lmke DEER RUN FARMS qp. (�3 FORr WER% FLORIDA aaa12 V.SA r. v .av rvnx, w.. sinxI Alt. anti ice fuel fil- its. $345,000. Located in Europe. Eastern Shore Heg- topless, phone 941, 275 -3023; FAX 941. 275.8229. ' S3 f 1985 HUGHES SOOT, 1210 Tr, one owner- tootled. Eggleston & Associates 214 -851 -6969 • Dallas 1980 HUGHES SOOD, HIGH skids, cargo hook, parD- cle separator. R. brake, facet filter, utility wn8gura- here, aux. tank, GPS, F-M., very good dmas rema ng. on engine, transmission and other components, card - able for OAS Pojacls- 3325,000. 1978 Hughes 5000, fresh annual, high sinks, e ti book, Particle SeParalpr, R. brake, facet 81ter, util comigurafien, aux, tank, GPS, F.M., great times re- maining. average 87 %, tameable for OAS Projects, malty, many mods-.3345,000, Above aircraft available with a large inventory al spare parts at very law piece. 214, 851.6969; FAX 851 - 6968.x3 1993 52ON O,T.S.O. turb m fuel Oow. • cow all n: Inc.. negotiable or trade her a JUDE. •tuber. RTSJEJA Contact Tery 318, 232.0841 (T), USA 318, 0.53 iR5 FOR sale or lease. FaL•bry Ired, ,enable. Fly away VFR as fox as Completions for IFR, EMS, Corporate rim plus crew, hesh annual, immediate defw- ery. _Flight Center, Brad Wollen, .206, • xoc-cav, uremia cvo, ow -ago >, "n cxro, 762.1740. if M0500E 1987 MODEL with 2900 hn.. higgh sides, cargo hook, am fuel tank, Magellan GPS. C208 em gone, excellent Careponom Hmes. Private owner sell. ng, Andy. 312. 486.8870; tax 312. 486.7826 or Daryl, 847, 42 &3818.8 '90 MD 500E-C2OR, Sod 412E, 1450TT. King avion- ics, aux. fuel 21 ggaal., NDH, executive use only, $495,000. Arrow Trading, 954. 771.9366, FAX 8%6.23 MD520 NOTAR, 1992 WITH 395 hours, high skies, auxiliary tank, duals, GPS. US $715.000. Uaye Hell. capital, lel : 954, 938 -7338, FAX: 954, 938.7337. of 1991 MDSOOE. TT-1750, FRESH hot section, clean and well equipped, 5435,000. Spitfire Helicopter Ca, 610,565.2986, FAXff .566.3621.01 1969 HUGHES 369HE, TOTAL rework Jan. 1996, all components microns or better. C-18 engine time re-' ma'ining appmximaraly 1000-h.., 5185,000. 813. 7865193 cr 904. 763.9000. n2 HALLO USA, HELI EXPRESS really hates to sell Heir e7 MO-5006. Why - It's such a nice aircraft recent redlblack paint. wetlge windows, duals, high gNr and bur Made TIR. We'll sell with new Means, hub and fresh hw section. only 5399,000. Phone 561, '221.0270. FAX 567 221-3469. a2 Is 0 10