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HomeMy WebLinkAbout2013-02-26; City Council; 21146; Authorizing Purchase Golf Carts GPS for CrossingsCPFA AND CITY OF CARLSBAD - AGENDA BILL 10 AB# 21,146 ACCEPTING PROPOSALS AUTHORIZING PURCHASES OF GOLF CARTS AND GPS EQUIPMENT FOR THE CROSSINGS AT CARLSBAD AND TRANSFERING FUNDS DEPT.DIRECTOR MTG. 2/26/13 ACCEPTING PROPOSALS AUTHORIZING PURCHASES OF GOLF CARTS AND GPS EQUIPMENT FOR THE CROSSINGS AT CARLSBAD AND TRANSFERING FUNDS GBJCOUNSB- DEPT. P&R ACCEPTING PROPOSALS AUTHORIZING PURCHASES OF GOLF CARTS AND GPS EQUIPMENT FOR THE CROSSINGS AT CARLSBAD AND TRANSFERING FUNDS EXEC DIR. / ^ RECOMMENDED ACTION: It is recommended the Board of Directors of the Carlsbad Public Financing Authority (CPFA) adopt Resolution No. 62 accepting proposals for the purchase of golf carts from EZGO Incorporated and GPS Equipment from DSG Tag received by the Authority's golf course operator Kemper Sports Management for The Crossings at Carlsbad Golf Course. Adopt resolution 2013-051 pf the City Council authorizing the Finance Director to transfer funds from the General Fund to the Golf Course for the purchase of golf carts and GPS equipment. ITEM EXPLANATION: In 2007, the CPFA approved a five-year lease agreement for ninety golf carts for The Crossings at Carlsbad Golf Course. The lease agreement expires in February 2013. Most of these carts have been in use over the full five-year lease term, and have exceeded their useful life. A lease option is still available for both golf carts and GPS replacements, however, the purchase option is now being recommended, as this option will save The Crossings approximately $40,000 over the next four years. The cost of purchasing versus leasing is explained in the Fiscal Impact section. The table below summarizes the proposals received for the acquisition of new golf carts, less any sales tax, interest or financing cost. Golf Cart Vendor No. of Carts Purchase Price EZGO RXV 90 $409,507 Yamaha Glacier 90 $367,222 Club Car Precedent i2 90 $417,566 While EZGO was not the lowest proposal received, it has been determined to be the best value, due in part to the extended battery life of their carts when compared to the other two vendors. DEPARTMENT CONTACT: Liz Ketabian 760-434-2826 liz.ketabian(@carlsbadca.gov FOR SECRETARY'S USE ONLY. BOARD ACTION: APPROVED CONTINUED TO DATE SPECIFIC • DENIED CONTINUED TO DATE UNKNOWN • WITHDRAWN • RETURNED TO STAFF • AMENDED • BOARD RECEIVED THE • REPORT/PRESENTATION OTHER-SEE MINUTES • Page 2 The EZGO RXV golf cart has a "regen" system designed to prolong the life of the battery and has proven to last two years, where other battery programs have lasted less than a year and a half, according to Kemper Sports' Managements past experience with the golf carts at the course. Kemper Sports manages 108 golf courses nationwide and based on their expertise, has determined that the EZGO carts are more reliable and will incur less maintenance costs over the life of the fleet. Considering the overall price including past performance, product credits, rebates and battery life, the recommended purchase is for the EZGO RXV golf carts. In addition to the carts, GPS equipment will be required for the new fleet of carts. Summarized below are the proposals received for the acquisition of GPA equipment, less sales tax, interest or financing cost. GPS Vendor Purchase Price GPSl (visage) $212,087 DSG Tag (touch) $167,728 CartTrac $123,120 Based on Kemper Sports' knowledge of the GPS equipment, staff is recommending DSG Tag as the best value, based on the following relative benefits: • Larger and full color screen • Separate battery from the golf cart • Animated video available for select advertising (additional revenue) • Mounts off steering column for better visibility • Remote monitoring of the battery level ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the meaning of CQA in that it has no potential to cause either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, and therefore does not require environmental review. FISCAL IMPACT: Staff analyzed the relative benefits of acquiring golf cart and GPS equipment through lease terms offered by the respective vendors or purchasing this equipment from the General Fund. Golf Carts EZGO offers 4-year lease financing at approximately 5 percent annual interest. For purposes of analysis of the lease versus purchase option, staff assumed a 1.2 percent average annual interest rate as the amount earned on the City's portfolio over the next four years. The difference between paying the City 1.2 percent (purchase option) and paying EZGO 5 percent interest (lease lease financing option), results in a savings of approximately $40,000 over the four-year lease term, therefore, staff recommends purchasing the carts with General Fund monies in order to avoid these relatively high interest rates. Page 3 The Crossings will make monthly payments to the General Fund over a four-year period, and will incur only the average interest rate earned on the City's portfolio per year (1.2 percent estimated). From an accounting standpoint, the difference between purchasing the carts and leasing them is the payee (the party making payment to the vendor). Under a city purchase, monthly payments will go to the city to reimburse the General Fund, and, under a lease agreement with EZGO, monthly lease payment would be made to EZGO. GPS Equipment Similarly, DSG Tag charges over 5 percent per year for a four-year lease term for the GPS units. Purchasing the GPS equipment with General Fund money would save The Crossings approximately $14,000 over the four-year lease terni offered by DSG Tag. An additional $1,400 per month in service fees is included in the contract. This is an expense that is incurred in either the lease or purchase options, and is included in The Crossings annual operating budget. EXHIBITS: 1. Resolution No. 62 of the Public Financing Authority accepting the proposal from EZGO Incorporated for golf carts and GPS Equipment from DSG Tag to be utilized at The Crossings at Carlsbad Golf Course. 2. Resolution No. 2013-051 of the City Council of Carlsbad authorizing the Finance Director to transfer funds from the General Fund to the Golf Course for the purchase of golf carts and GPS equipment. 3 Exhibit 1 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 62 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC FINANCING AUTHORITY, ACCEPTING PROPOSALS FROM EZGO INCORPORATED AND DSG TAG FOR THE PURCHASE OF GOLF CARTS AND GPS EQUIPMENT FOR THE CROSSINGS AT CARLSBAD GOLF COURSE. WHEREAS, the Carlsbad Public Financing Authority, hereafter the "Authority", has previously entered into a contract with Kemper Sports Management Incorporated for the operation and maintenance of. The Crossings at Carlsbad Golf Course; and WHEREAS, proposals were prepared at the request of Kemper Sports Management to provide the Authority with golf carts and GPS equipment for use at the golf course; and WHEREAS, the Authority received three (3) proposals for both golf carts and GPS equipment, which were subsequently evaluated by representatives of both Kemper Sports Management and City staff utilizing an overall "best value" review in accordance with Article V, Section 5.3 of the Rules and Regulations of the Authority governing the acquisition of equipment, materials, and services; and WHEREAS, purchase of the golf carts and GPS equipment will be paid from funds transferred from the Cit/s General Fund; and WHEREAS, the Authority will repay the City for the total amount of the purchase cost over a four year period in equal monthly installments which shall include interest expense at the rate ofthe average annual earnings on the City's portfolio on June 30 ofthe previous fiscal year (the initial rate used through June 30, 2013 will be 1.65 percent). NOW, THEREFORE, BE IT RESOLVED by the Board of Directors ofthe Carlsbad Public Financing Authority of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2. That proposals from EZGO Incorporated and DSG Tag, to provide the requested golf carts and GPS equipment, respectively, are hereby accepted. // // // // // // // // // // // // // // // // // // // // 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the Carlsbad City Council and Public Financing Authority, held on the 26*^ day of February 2013, by the following vote to wit: AYES: Council Members Hall, Packard, Wood, Blackburn, Douglas. NOES: None. ABSENT: None. BARBARA ENGLESON, (SEAL) Exhibit 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 2013-051 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD AUTHORIZING THE FINANCE DIRECTOR TO TRANSFER FUNDS FROM THE GENERAL FUND FOR THE PURCHASE OF GOLF CARTS AND GPS EQUIPMENT FOR THE CROSSINGS AT CARLSBAD GOLF COURSE. WHEREAS, the Carlsbad Public Financing Authority, hereafter the "Authority", has previously entered into a contract with Kemper Sports Management Incorporated for the operation and maintenance of. The Crossings at Carlsbad Golf Course; and WHEREAS, proposals were obtained to provide the Authority with golf carts and GPS equipment for use at the golf course; and WHEREAS, the Authority received three (3) proposals for both golf carts and GPS equipment, which were subsequently evaluated by representatives of both Kemper Sports Management and City staff utilizing an overall "best value" review in accordance with Article V, Section 5.3 of the Rules and Regulations of the Authority governing the acquisition of equipment, materials, and services; and WHEREAS, the Carlsbad Public Financing Authority has approved the proposals received from EZGO Golf Incorporated and DSG Tag; and WHEREAS, The City Council of the City of Carlsbad authorizes the Finance Director to transfer funds from the General Fund for the purchase of golf carts and GPS equipment for use at The Crossings at Carlsbad Golf Course; and WHEREAS, the Authority will repay the City for the total amount of the purchase cost over a four year period in equal monthly installments which shall include interest expense at the rate ofthe average annual earnings on the City's portfolio on June 30 ofthe previous fiscal year (the initial rate used through June 30, 2013 will be 1.65 percent). ^ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the City Council of the City of Carlsbad hereby directs the Finance Director to transfer funds from the General fund to be used for the purchase of golf carts and GPS equipment for The Crossings at Carlsbad . // // // // // // // // // // // // // // 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 1 PASSED, APPROVED AND ADOPTED at a Joint Special Meeting of the 2 Carlsbad Public Financing Authority and the Carlsbad City Council, held on the 26*^ day of February 2013, by the following vote to wit: AYES: Board Members Hall, Packard, Wood, Blackburn, Douglas. NOES: None. ABSENT: None. MATT HALL, Chairman ofthe Board ATTEST: BARBARA ENGLESON, Secretary (SEAL) 19 ii^-^^ — TE • ul S ; —f ; - CO;' 22 23 24 25 26 27 28