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HomeMy WebLinkAbout2013-07-23; City Council; 21322; Authorizing Purchase Maintenance EquipmentCITY OF CARLSBAD/CARLSBAD PUBUC FINANCING AUTHORITY-AGENDA BILL 23 AB# 21,322 ACCEPTING PROPOSALS AUTHORIZING 1 DEPT. DIRECTOR A MTG. 7/23/13 PURCHASES OF MAINTENANCE EQUIPMENT CITY ATTY. (// DEPT. P&R FOR THE CROSSINGS AT CARLSBAD AND CITY MGR. ^ ^ TRANSFERRING FUNDS UC RECOMMENDED ACTION: Adopt Resolution No. 64 ofthe Public Financing Authority accepting proposals from Toro and Jacobsen for maintenance equipment for The Crossings at Carlsbad Golf Course. Adopt Resolution No. 2013-193 of the City Council of Carlsbad authorizing the Administrative Services Director to transfer funds from the General Fund to the Public Financing Authority for the purchase of maintenance equipment. ITEM EXPLANATION: In 2007, the CPFA approved five-year lease-purchase agreements for 22 pieces of maintenance equipment for The Crossings at Carisbad Golf Course. The lease agreements expired in 2012, with the equipment now being owned by the Public Financing Authority. The maintenance equipment has been in use since the start ofthe leases and has exceeded their useful life. A lease option is still available for the affected maintenance equipment. However, a purchase option is now being recommended, as this option will save The Crossings at Carisbad approximately $70,500 over the next five 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 maintenance equipment less any interest or financing cost. Equipment Vendor Purchase Price Jacobsen $520,204 John Deere $535,498 Toro^ $541,629 1. The Toro "proposal" includes one piece of Jacobsen equipment as the Jacobsen equipment was a better fit for the unique terrain of The Crossings at Carlsbad golf course. While Toro was not the lowest proposal received, it has been determined to be the best value, due in part to the overall reliability, lower part replacement costs, and more readily available replacement parts when compared to the other two vendors. Additionally, one piece of equipment, a greens roller, will be purchased from Jacobsen as Kemper Sports felt that this particular greens roller was better suited to the hilly terrain at The Crossings at Carlsbad golf course than its Toro counterpart. DEPARTMENT CONTACT: Liz Ketabian 760-602-2826 liz.ketabian@carl$badca.gov Council/Board Action: APPROVED CONTINUED TO DATE SPECIFIC • AMENDED • CONTINUED • REPORT/PRESENTATION RECEIVED • RETURNED TO STAFF • OTHER-SEE MINUTES PAGE 2 Kemper Sports manages 108 golf courses nationwide and based on their expertise, has determined that the Toro maintenance equipment, with the exception ofthe Jacobsen greens roller, is more reliable and will incur less maintenance costs over the life of the fleet. Based on their expertise, staff recommends purchasing the 22 pieces of maintenance equipment from Toro/Jacobsen. The various pieces of maintenance equipment being purchased are for: Sand bunker maintenance Greens aeration Fairway rough aeration Debris cleanup Chemical spraying Golf ball collection Greens mowing Fairway mowing Rough mowing Dethatching Additionally, other maintenance equipment, such as one (1) beverage cart, seven (7) utility vehicles, and two (2) tractors, are also being purchased. ENVIRONMENTAL IMPACT: Pursuant to Public Resources Code Section 21065, this action does not constitute a "project" within the meaning of CEQA 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 the 22 pieces of maintenance equipment through lease terms offered by the respective vendors or purchasing this equipment from the General Fund. Toro offers 5-year lease financing at approximately 6.13 percent annual interest. To analyze the difference between leasing and purchasing from Toro, staff assumed a 1.2 percent average annual interest rate as the amount earned on the City's portfolio over the next five years. The difference between paying the City 1.2 percent (purchase option) and paying Toro 6.13 percent interest (lease financing option) results in savings of approximately $70,500 over the five-year "lease" term. Therefore, staff recommends purchasing the maintenance equipment with General Fund monies in order to avoid the higher lease interest rate. The Crossings will make payments to the General Fund over a five-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 payments to the vendor). Under a city purchase, payments will go to the city to reimburse the General Fund. Under a lease agreement with Toro, lease payments would be made to Toro. '1.. PAGE 3 EXHIBITS: 1. Resolution No. 64 , of the Public Financing Authority accepting proposals from Toro and Jacobsen for maintenance equipment for The Crossings at Carlsbad Golf Course. 2. Resolution No. 2013-193 of the City Council of Carlsbad authorizing the Administrative Services Director to transfer funds from the General Fund to the Public Financing Authority for the purchase of maintenance equipment. 3 9 10 19 20 21 22 23 26 27 28 RESOLUTION NO. 64 Exhibit 1 1 2 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBUC FINANCING AUTHORITY, ACCEPTING PROPOSALS FROM 4 TORO AND JACOBSEN FOR THE PURCHASE OF MAINTENANCE EQUIPMENT FOR THE CROSSINGS AT CARLSBAD GOLF COURSE 5 " ^ WHEREAS, the Carlsbad Public Financing Authority, hereafter the "Authority", has 7 previously entered into a contract with Kemper Sports Management Incorporated for the operation and maintenance of. The Crossings at Carisbad Golf Course; and WHEREAS, proposals were prepared at the request of Kemper Sports Management to 11 provide the Authority with maintenance equipment for use at the golf course; and WHEREAS, the Authority received three (3) proposals for the maintenance 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 ofthe Authority governing the acquisition of equipment, materials, 13 14 15 16 17 and services; and 18 WHEREAS, purchase ofthe maintenance equipment will be paid from funds transferred from the City's General Fund; and WHEREAS, the Authority will repay the City for the total amount of the purchase cost over a five 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 24 (the initial rate used through June 30, 2014 will be 1.14 percent). 25 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carisbad Public Financing Authority of the City of Carisbad, California, as follows: 1. That the above recitations are true and correct. H 1 2. That proposals from Toro and Jacobsen, to provide the requested maintenance equipment, respectively, are hereby accepted. 3 4 5 6 7 // 17 18 19 20 23 24 25 26 27 28 // // 8 // 9 10 11 12 13 14 // // // // // 15 // 16 // // // // 21 // 22 // // 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 Carisbad Public Financing Authority Board and the Carisbad City Council held on the 23'^ day of July, 2013, by the following vote to wit: AYES: Board Members Hall, Packard, Wood, Blackburn and Douglas. NOES: None. ABSENT: None. ATTEST: BARBARA ENCCtSON, Secret^ WO vV Exhibit 2 1 RESOLUTION NO. 2013-193 3 2 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CA, AUTHORIZING THE ADMINISTRATIVE SERVICES DIRECTOR TO TRANSFER FUNDS FROM THE GENERAL FUND TO THE PUBUC 4 FINANCING AUTHORITY FOR THE PURCHASE OF MAINTENANCE EQUIPMENT 5 6 7 8 9 10 WHEREAS, the Carisbad 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 Carisbad Golf Course; and WHEREAS, proposals were obtained to provide the Authority with maintenance 11 equipment for use at the golf course; and WHEREAS, the Authority received three (3) proposals for maintenance equipment, 13 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 ofthe Authority governing the acquisition of equipment, materials, 17 and services; and 18 WHEREAS, the Carlsbad Public Financing Authority has approved the proposals received 19 from Toro and Jacobsen; and 20 WHEREAS, the City Council of the City of Carlsbad authorizes the Administrative Services 21 Director to transfer funds from the General Fund for the purchase of the maintenance 22 23 equipment for use at The Crossings at Carlsbad Golf Course; and 24 WHEREAS, the Authority will repay the City for the total amount of the purchase cost 25 over a five year period in equal monthly installments which shall include interest expense at the 26 14 15 16 27 28 7 1 rate of the average annual earnings on the City's portfolio on June 30 of the previous fiscal year ^ (the initial rate used through June 30, 2014 will be 1.14 percent). NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carisbad, California, as follows: 1. That the above recitations are true and correct. 7 2. That the City Council of the City of Carlsbad hereby directs the Administrative 8 Services Director to transfer funds up to $545,000 from the General fund to be used for the purchase of maintenance equipment for The Crossings at Carlsbad . // // // 9 10 11 12 13 14 // 15 // 16 17 18 19 20 22 23 24 25 26 27 28 // // // // 21 // // // // // // 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 Carisbad City Council and Public Financing Authority Board on the 23'^ day of July, 2013, by the following vote to wit: AYES: NOES: Council Members Hall, Packard, Wood. Blackburn and Douglas. None. ABSENT: None. MATT HALL, Mayor ATTEST: BARBARA ENGLE^N, City Clerk Of