Oakland College is considering outsourcing grounds maintenance. In this regard, Oakland has received a bid from Highline Grounds Maintenance for $299,440 per year. Highline states that its bid will cover all services and planting materials required to "keep Oakland's grounds in a condition comparable to prior years." Oakland's cost for grounds maintenance in the preceding year were $304,800, as follows:
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Salary of three full-time gardeners
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$190,000
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Plant materials
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79,000
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Fertilizer
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11,800
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Fuel
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12,600
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Depreciation of tractor, mowers, and other miscellaneous equipment
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11,400
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Total
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$304,800
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If Oakland College outsources maintenance, it will be able to sell equipment for $31,200, and the three gardeners will be laid off.