HomeMy WebLinkAbout3/6/2013 - STAFF REPORTS - 2O ;04QPLM Sp9
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City Council Staff Report
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CONSENT CALENDAR
DATE: March 6, 2013
SUBJECT: APPROVE THE LEASE/PURCHASE OF 246 PIECES OF GOLF
COURSE MAINTENANCE EQUIPMENT TO SERVICE THE CITY'S
TAHQUITZ CREEK LEGENDS AND RESORT GOLF COURSES AND
AMEND THE MASTER LEASE AGREEMENT, NUMBER 40911004, TO
FINANCE THE LEASE/PURCHASE OF THE EQUIPMENT THROUGH
"EVER BANK COMMERCIAL FINANCE".
FROM: David H. Ready, Esq., Ph.D., City Manager
BY: Thomas Wilson, Assistant City Manager
Geoffrey S. Kiehl, Director of Finance and Treasurer
SUMMARY
To complete the Golf Course Equipment Replacement Plan for the Tahquitz Creek
Legends and Resort golf courses, the City needs to purchase new golf course
maintenance equipment with which to daily service the City's two golf courses. The
City's golf course manager, Century Golf, has negotiated — at a substantial discount —
the lease/purchase of 246 pieces of Toro maintenance equipment to be financed,
through an amendment to the Master Lease Purchase Agreement with "Ever Bank
Commercial Finance" which most recently financed the four-year lease of the new 152
unit Golf Cart fleet.
RECOMMENDATION:
1) Approve the Amendment of the Master Lease Agreement, Number 40911004,
with "Ever Bank Commercial Finance" for the financing of the lease/purchase of
246 pieces of golf course maintenance equipment (equipment inventory attached
as Exhibit "A") in the amount of $20,916.86 per month, for a term of sixty months,
for a total cost—with interest at not to exceed 3.99% —of$1,255,011.60.
2) Authorize the City Manager to execute all necessary documents upon review and
approval of the City Attorney.
ITEM NO. —
Golf Equipment Lease/Purchase
March 6, 2013
Page 2
STAFF ANALYSIS:
After acquiring sole ownership and operational responsibility in late 2007 for the City of
Palm Springs' two golf courses — The Legends course and The Resort course — staff
embarked upon a program, with the advice and assistance of its day-to-day manager,
Century Golf, to renovate, upgrade and remodel the facilities and replace the
maintenance equipment and the Golf Cart fleet.
The first of those efforts consisted of establishing a regular replacement program for the
Golf Cart fleet. In conjunction with Century Golf, the City has established a four-year
lease program for the 152 unit Golf Cart fleet which provides a quality golf cart which
reliably serves the golfing public. The Golf Cart fleet was replaced in 2012 with a new
lease for another four year term.
The second major effort was the comprehensive renovation and remodeling of the
maintenance facility and the Clubhouse which was completed in 2011.
The third effort was the July 2011 purchase of 33 pieces of equipment to provide for the
annual over-seeding of the two golf courses for winter play. This over-seeding
equipment was equipment which had never been owned by the City until the 2011
acquisition.
The final part of the golf course Equipment Replacement Plan is the purchase of new
maintenance equipment with which to daily service the two golf courses. All of the
current equipment is more than 15 years old and requires approximately $100,000
annually to repair, maintain and keep in service. The purchase of new maintenance
equipment will eliminate this $100,000 cost. The new equipment will also reduce as
much as 40% the amount of staff time required to prepare the golf courses for play on a
daily basis.
Century Golf has been able to utilize its unique market position, as managing more than
100 golf facilities, to negotiate favorable pricing for the new maintenance equipment,
receiving a discount from List Price of more than $285,000 (see Equipment Inventory
attached as Exhibit "A"). By amending the Master Lease/Purchase Agreement with
"Ever Bank Commercial Financing" the City will also be able to acquire favorable
financing for the lease/purchase for five years at a 3.99% interest rate. The
Procurement Manager has spot checked this pricing versus prices available in the
market and has confirmed the accuracy of this discount estimate. Once the new
equipment is received, staff will analyze the older equipment and determine which units
will be surplused via the open auction process.
The attached agreement (Exhibit "B") details the proposed lease/purchase terms. All of
the equipment has an expected life of more than five (5) years with the major pieces of
equipment possessing a projected useful life of at least ten (10) years or more.
O2
Golf Equipment Lease/Purchase
March 6, 2013
Page 3
FISCAL IMPACT:
One of the primary objectives of the City's efforts in replacing the golf course
maintenance equipment, along with the renovation and remodeling of the golf course
facilities, has been to make the purchases and improvements "self-funded" by the Golf
Fund. Staff is pleased to report that that objective has consistently been met — with all
purchases, leases, and construction improvements — totally paid for and/or financed by
Golf Fund revenues.
The lease/purchase of the 246 pieces of maintenance equipment will cost $20,916.86
per month over a term of sixty months for a total cost, with financing, of$1,255,011.60.
The Director of Finance has reviewed the proposed Lease/Purchase Agreement and its
annual cost and has determined that those costs can be met by the Golf Fund
revenues. The Golf Fund has more than $500,000 currently available in fiscal year
2012-13.
David H. Ready, Esq4$Tn. Thomas J. Wilson
City Manager Assistant City Manager
k4;
Geoffrey S. 1 iehl Douglas C. Holland
Director of Finance and Treasurer City Attorney
Attachments: Exhibit "A"
Exhibit "B"
03
EXHIBIT A
® TuffStar,Inc
ry Centu Golf Partners Tahpuhz Creek 6C
Patin Springer CA
National Axount Prlca Quote
27 2013
1 44934 14M-400 EH2 Whereas $26,898.00 $22,115.54
1 44938 MR-400 Cross Corw/Swhrel Ka/OpUon Caddy $6,370.01) $5,237.42
1 44943 MN 400 Brake Kit to Change 2 WH IMWe to 4 WH-UmRod AvaWWay 1I.%S.0n lyyyl,yj
NH440 Total *34A03A0 $26A64.37
3 07370 Wor1Onbn HOX-4WD $91,416.00 $74,229.78
3 07316 High Flow Hydr&Ak Not $5,142.00 $4,175,31
3 07372 Canopy tIA03.00 11
tMerlmran NOR-4WD TOW $96,361AD *79Ae9.12
1 44700 ProPass 200 Wlydem $12,276.00 $10,093.33
1 44704 Propass Tow-Type Chases no renders $2,266.00 $1,863.11
1 44705 Propaas Finder KR $453.00 $372.46
1 44706 Propam Tow Chsask Hoae AW'f gp3.a0 $240.90
PrOPaaa 200 TOW $15,288.00 *12.aN.80
1 44538 Pro Force $a,539.00 $7,020.77
6 04040 GreerKmaster Flex 2100 $45,978.00 $37,803.12
6 04252 14 84de CLRdng Una-Flex 2100 $24,288.00 $19,969A2
6 04255 Front Narrow WMW Roger $2,136.00 $1,756.20
6 04260 Flex Groomer Drive,Counter RoftUng $12,030.00 $9,890.46
6 D4708 Groomer ROO,CarMde(LH)(For use with 04260 only) $3,738.01) $3,073.20
6 04265 LED Ught KR-GR Flex 2100/1800 13 4rw_m f2A02A
GreenNrtWw parr Me TOW *911678.00 $76,294.66
6 04238 Tans Pro 80 $6,210.00 $4,601.2.8
6 04247 Rod Ramp Kit,TarnPro 80 $3,468.00 S2 50 cz
Train Pro ao To"I *9,676.90 $7,170.90
4 03690 Reelmaster 5610 $184,324.00 $136,574.84
20 03697 11 Made DPA(RADIAL)Cutting Umt $65,240.00 $48,339.60
4 30359 LMNersal Sunshade $2A84.00 $2,136.98
4 03667 AU-Me Seat Suspenalon S2.404.00 $LZU m
RONmaaasr 561"Total *254A52A0 $185.832.56
3 30839 GrounOsmaster 350" $125,262.00 $101,712.72
3 30358 Blmkd Canvas Sunshade $678.00 $550.53
9 104-5168 Roger Saapar Kit S700.47 S568.80
QawraaouOEer 350"Tool $1.26,600.47 $30243105
Toro&Wvnwm Tow $639r799.47 $a02,254.23
Two Pieces left off Initial Inventory
List Price Century Price
1 A1036 Dual Master3000IR $34,793.00 $32,937.40
Relief Grinder
1 A1113 Angiemaster 3000MC $14,696.09 $14,065.00
04
® Turf Star,Inc.
Century Golf Partners
Tahquitz Creek GC
Palm Springs,CA
MaMonal Account Prig quote
Fobruary 27 2013
4 043S8 Greensmaster3150-Q $106,220.00 $78,703.68
12 04619 11-Blade OAft Unit $29,484.00 $21,846.12
4 04626 Narrow WkrMe Roger(.200'Spacing)(Set of 3) $4,252.00 $3,150.52
4 04476 3 WD Klt(Without RODS) t11.B96.00 S8,814 36
Oraanwnkrhr 31a0.Q 11-816ch Total 4181,652.00 $112,514.09
4 04358 Grewar aster 3150-Q $1061220.00 $78.703.68
12 D4618 B-ShWe Cullkq Unit $27,252.00 $20,192.40
4 04626 Narroe WK4rk Roller(.200-Spacing)(Set of 3) $4,252.00 f3,150.52
4 04476 3 WO Kit(Wodot ROPE) 111995,00 ellerau
Graaaamaatar 3160Q a-Bloch Total 6149,630.00 f310,860,96
3 308W &vovKIsmaster 4500-D $210,597.00 $173,152.89
3 30359 universal Mount Sunshade $2,163.00 $1,778.43
15 30836 lost Mulching Kit 1e70.00 1715,35
GraMOMtYou 4500-D Total 82131630.00 s179,646.67
1 41198 Mold Pm 1250 $31,939.00 $23,665.20
1 41218 Uitra Sonic Boom KK-M Model Years $3,479.00 f2,577.76
1 41236 ProFoam Marti"Kit $1,743.00 $1,291.48
1 119-9366 Prol'oern Marking Kit Mounting MWwt $179,95 $133.33
1 41361 ROPS-for P12 NO prior models-Standard on F13 models f545.00
i1 95-91M Upta Blue 1.00 $136.
gDm noose 040 PSI fi63.92 f136.29
11 95-9186 Cap and Gasket for Traflet Sy"Tic Mocks fg,28 <u,c1
MUM Pro 2250 Total M119.15 $20,244,44
3 08703 Sand Pro 3040 $50,361.00 $37,314.99
3 06714 Martial Blade(40') $4,476.00 f3,336.5D
3 08731 Mid-Mean ASM f4,200.00 $3,111.99
3 08732 Weeder Tine Toolbar f2,784.00 $2,062.90
3 08751 TooOr Rake $4,236.00 $3,138.66
3 08752 Spring Rake 12.124.00 51 M 77
Sand Pro 3040 Total f68,181.00 $40,518.71
6 D4709 Groorrror Were(Lot)(Set of 1) f9,726.00 $7,206.48
6 04712 Groover Reel,Sprmg Steel(Set of 1) $2,862.00 $2,120.58
2 106-2643 Pull Unk Kit(Set of 3) $1,231.38 $912.40
6rourMamamw 3300•D Total f13,819.78 11101239A6
Toro 6gWptneat Total $6115,221.53 f488,024.88
05
., EXHIBIT B
ADDENDUM TO MASTER EQUIPMENT LEASE AGREEMENT Ever Sank
This Addendum supplements the provisions of the Lease Agreement (consisting of the Master Equipment and
Lease Agreement Number 40911004, dated November 8, 2012, and Equipment Schedule No. 40911032)
("Lease"). The Lessor and the Lessee make this Addendum an integral part of the Lease. Capitalized terms
used in this Addendum that are not defined will have the meanings specified in the Lease. For the purposes of
this Addendum, the term "you" or "your" refers to the City of Palm Springs, and the term "we," "us," or"Our"
refers to EverBank Commercial Finance, Inc. (There are numerous instances in this addendum where such
pronouns are not capitalized, therefore it is easier to redress that drafting convention by permitting lower case
defined etrms as stated above.) If there is any conflict between the Lease and this Addendum, then this
Addendum will control and prevail.
1. Funding Intent. You reasonably believe that funds from the City's Legends and Resort Golf Courses
("Facilities") operations are sufficient to make all Lease Payments and other payments during the term of this
Lease. You affirm that funds from Facilities operations are available for your current fiscal year obligations due
prior to June 30, 2A_ pursuant to the Lease. You and we agree that your obligations to make Lease
Payments under this Lease is subject to annual appropriation and will not be interpreted to be a debt in
violation of applicable law or constitutional limitations or requirements. Nothing contained in this Lease will be
interpreted as a pledge of your general tax revenues,funds, or moneys.
2. Use of Equipment. The Equipment will be operated and controlled by you and will be used for essential
government purposes and will be essential for the term of this Lease.
3. Insurance and Notice of cancellation of insurance. You at your option may be self-insured for a portion
of the insurance requirements under the Lease. You will provide certificates of insurance as otherwise
generally required under the provisions of Section 14 of the Lease and these certificates will require that each
insurer will provide us with 30 days advance notice of any cancellation or material change of such insurance.
4. Approvals. You warrant that you have taken the necessary steps, including any legal bid requirements
under applicable law,to arrange for the acquisition of the Equipment. The approval and execution of the Lease
and all related documents have been in accordance with all applicable open meeting laws and that a resolution
of your city Council authorizing execution of the Lease has been duly adopted and remains in full force and
effect.
S. Non-Appropriation of Funds. If sufficient funds are not appropriated and budgeted by your City Council
in any fiscal year for Lease Payments or other payments due under this Lease, this Lease will terminate as of
the last day of your fiscal year for which funds fnr Lease Payments are available. You will give us written notice
within fifteen (15) days of the occurrence of such non-appropriation (wouldn't this be a matter of record?).
Such termination is without any expense, penalty, or liability of any kind, except for the portions of the Lease
Payments and those expenses associated with your return of the Equipment in accordance with Section 3 of
the Lease for which funds have been budgeted and appropriated or are otherwise legally available. You agree
that, to the extent permitted by law that(1) you will not terminate this Lease if any funds are appropriated by
you or to you for the acquisition or use of equipment or services performing similar functions to the Equipment
during your fiscal year in which such termination would occur and (2)you will not spend or commit funds for
the acquisition or use of equipment or services performing functions similar to the Equipment until the fiscal
year following the fiscal year for which funds were first not available for the Lease payments.
Muni Addadu -Modification
06
6. Indemnity. In lieu of the provisions of Section 17 of the Lease in its entirety and which shall be of no
force and effect for the purpose of this Lease,you agree that you will defend us(using counsel approved by us)
against all claims, liabilities, suits, losses, and costs (including fees of counsel) relating to the Equipment or this
Lease, including those arising from the manufacture, installation, maintenance, use, or ownership of the
Equipment or any breach of a representation or warranty by You and You will promptly pay all such claims and
costs as they arise. If we have title to the Equipment, you will reimburse us for any economic loss resulting
from an adverse change in the recovery period(s) or the depreciation method(s) available for the Equipment.
These indemnities survive the termination or expiration of this Lease.
7. Remedies. In lieu of the provisions of Section 19 of the Lease in its entirety and which shall be of no
force and effect for the purpose of this Lease, you agree that immediately upon the occurrence of a default
under the Lease or immediately after the last day of the fiscal period during which you have advised us of the
occurrence of non-appropriation pursuant to Section 6 of this Addendum, we may terminate the Lease or your
rights hereunder and in such event a) you shall pay to us all unpaid Rent Payments up to the first day of the
non-appropriation period and b) repossess the Equipment under the Lease, which you agree, at your expense,
to surrender promptly to us at the location as we will direct. You will permit us or our agents to enter the
premises where the Equipment is located. In the event of any repossession, you will execute and deliver all
documents required to transfer title (if applicable) to and possession of the Equipment under the affected
Schedule to us, free and clear of all liens and security interests. Upon repossession, if any Equipment is
damaged or otherwise made less suitable for the purposes for which it was manufactured than when delivered
to you, you agree, at your option, to: (1) repair and restore the Equipment to the same condition in which it
was received by you, and as set forth in Section 16 of the Lease , and at your expense, promptly return the
Equipment to us to a location specified by us; or (2) pay to us the actual costs of the repair, restoration, and
return.
If we terminate the Lease as described herein or in the event of non-appropriation as provided in Section 6 of
this Addendum and you continue to use the Equipment or if you otherwise refuse to pay rental payments due
during a fiscal period for which your City Council has appropriated sufficient legally available funds to pay the
rental payments, we will be entitled to bring an action at law or equity to recover damages attributable to the
holdover period for the Equipment that you continue to use or to the remainder of the fiscal period for which
the appropriations have been made. We will also be entitled to exercise any or all remedies available to a
secured party under the applicable Uniform Commercial Code and all other rights and remedies that may have
at law or equity.
No right or remedy conferred upon or reserved to us as provided in the Lease is exclusive of any right or
remedy in the Lease or at law or in equity or otherwise provided or permitted. No waiver of or delay or
omission in the exercise of any right or remedy as provided in the Lease or otherwise available to us will impair,
affect,or be construed as a waiver of its rights thereafter to exercise the same.
8. Governing Law and Place of Suit. In lieu of the provisions of the second paragraph of Section 25 of the
Lease in its entirety and which shall be of no force and effect, You and we agree that in the event of any
arbitration or litigation arising out of or relating to the Lease, or the breach or performance of it, any such
arbitration shall be conducted in the Coachella Valley, California, and such litigation shall be filed in the Indio
Branch of the Riverside County Superior Court in the State of California.
Muni Ad&=Jum-Modification
07
All other terms and conditions of the Lease shall remain in full force and effect.
EVERBANK COMMERCIAL FINANCE, INC. CITY OF PALM SPRINGS,CALIFORNIA
d/b/a TANQUITZ CREEK GOLF RESORT
X
Authorized Signature orized Signature
David Ready, City Manager
Print Name and Title Print Name and Title
Date Date
Muni Add=)dwn-MddiF"k)n
08
...... ..........
EverBank
EQUIPMENT SCHEDULE COMMERCIAL FINANCE*
Master Equipment Lease Agreement Number: 40911004 Dated: 11/08/2012
Equipment Schedule Number: 40911032 Dated: 02/04/2013
Lessor: EverBank Commercial Finance, Inc.
Lessee: CITY OF PALM SPRINGS, CALIFORNIA D/B/A TAHQUITZ CREEK GOLF RESORT
This Equipment Schedule is entered into pursuant to the Master Equipment Lease Agreement identified above(the"Master
Lease"). All of the terms and conditions of the Master Lease are incorporated herein and made a part hereof, along with
any Supplemental Terms annexed to this Equipment Schedule. This Equipment Schedule, any Supplemental Terms
annexed hereto and the Master Lease as it relates to this Equipment Schedule are hereinafter collectively referred to as the
"Lease."
1. EQUIPMENT AND LEASE INFORMATION:
SUPPLIER Supplier Name("SUPPLIER")
INFORMATION TURF STAR,INC.
Street Address/City/State/Lip rppiier- Phone Number
438 RADLEY COURT HAYWARD CA 94Wqu
EQUIPMENT E i ment Descri Ion uanUv Serial Number
D_ESCRIPTION SEE SUPPLEMENTAL DESCRIPTION OF EQUIPMENT
QUIPMENT SfreetAddress/CitylCounty/StateOp
LOCATION 1885 GOLF CLUB WAY,PALM SPRINGS,CA 92264
END OF LEASE heck one applicable box. If no box Is checked or if more than one box is checked,the Fair PLUS
URCHASE Market Value Purchase Option will apply. APPLICABLE
OPTION Fair Market Value Purchase Option ®$1.00 Purchase Option TAXES
Fixed Price Purchase 2plion of %of the Total Cash Price otal Cash Price$
TERM AND Initial Lease Term: Rental Payment: You agree to pay at Ore time You sign this Lease:
PAYMENT 60Months $20.9F6.86
SCHEDULE A)Total Number of Advances: 0 (Mos.)
Payment Frequency: -- S)Total Advance Rental Paymen = $0.00 PLUS
C)SalesNse Tax on Rental Payment= $0.00
Mon D)One-time Documentation Fee = $250.00 APPLICABLE
Quarterly E)Total Due =$250.00 TAXES
Other If more than one Rental Payment is required in advance,the
additional amount will be applied at the and of the initial or
any renewal term.
CITY OF PALM SPRINGS, CALIFORNIA
EVERBANK COMMERCIAL FINANCE,INC. GIBIA TAHQUITZ CREEK GOLF RESORT
Lessor Al ee
Authorized Signature Authorized Signature
DAVID READY, CITY MANAGER
Print Name and Title Print Name and Title
FEBRUARY 4, 2013
Date Date
For EverBank Use only
Lease Commencement Date:
) First RentalPa�ment Due'Date:
Eq`npm Sd Wtk WLA V401012Dt6 J