HomeMy WebLinkAbout2017-02-14; Public Financing Authority; ; Adopt a Resolution approving the purchase of 89 golf carts and 6 ancillary carts from EZGO Inc and authorizing the Administrative Services Director to appropriate funds from the Golf Course Fund to The CrossingsCA Review H-5
cbC"CIIA%PUBLIC FINANCING AUTHORITY
C.)0 Staff Report
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Meeting Date:February 14, 2017
To:Chair and Board Members //
From:Kevin Crawford, City Manager
Staff Contact:Kyle Lancaster, Parks Services Manager
Kyle.lancaster@carlsbadca.gov or 760--434-2941
Subject Adopt a Resolution approving the purchase of 89 golf carts and six ancillary
carts from EZGO Inc.,in an amount not to exceed $605,000,and
authorizing the Administrative Services Director to appropriate funds from
the Golf Course Fund to The Crossings at Carlsbad.
Recommended Action
Adopt a Resolution approving the purchase of 89 golf carts and six ancillary carts from EZGO Inc.,
in an amount not to exceed $605,000, and authorizing the Administrative Services Director to
appropriate funds from the Golf Course Fund to The Crossings at Carlsbad.
Executive Summary
On December 4, 2012, the Carlsbad Public Financing Authority (Authority) adopted Resolution
No. 60, approving an agreement with Kemper Sports Management, Inc. (Kemper) to manage and
operate the golf course.Under Section 2.23 of the management agreement, the Authority is
required to approve and execute any contract exceeding $25,000.The golf cart and ancillary cart
fleet of The Crossings at Carlsbad has experienced significant use over the past four years, and
has generally exceeded its useful life.Kemper Sports Management staff has proposed purchasing
carts with lithium batteries to optimally address the terrain of The Crossings at Carlsbad.The
Golf Course Steering Committee is recommending that Kemper purchase 89 EZGO RXV Elite golf
carts and six ancillary carts,in an amount not to exceed $605,000.The committee is also
recommending purchasing the carts with Golf Course Fund monies, and allowing The Crossings
at Carlsbad to make monthly payments to the Golf Course Fund over 48 months —while incurring
only the average interest rate earned by the city on its portfolio.On February 26,2013, the
Authority approved the last purchase of golf carts and ancillary carts with similar Golf Course
Fund financing (Resolution No. 62).
Discussion
The golf carts and ancillary carts purchased in 2013 have experienced significant use over the
past four years, and have generally exceeded their useful life.The Crossings at Carlsbad hosts
approximately 50,000 rounds of golf per year.The course terrain is demanding, with substantial
changes in elevation and seven miles of cart paths per round of golf,as opposed to a national
average of 4 miles of cart paths per round of golf.The batteries in each of the existing carts were
replaced approximately two years ago.
The Golf Course Steering Committee meeting which consists of staff from Kemper, and the city's
Administrative Services and Parks & Recreation Departments has determined that the existing
fleet of carts is ready to be traded in for a new fleet.Through extensive research, Kemper has
proposed purchasing golf carts with lithium batteries to optimally address the terrain and length
of The Crossings at Carlsbad.The advantages to using golf carts with lithium batteries over golf
carts with typical lead batteries are summarized below.
•Lithium battery est. energy savings over 48 months:$38,448 (1/2 of the charging time)
•Lithium battery est. water savings over 48-months:$6,552 (Water not needed in cells)
•Lithium battery labor savings over 48-months:$3,750 (No labor time for adding water)
•Higher trade-in value at end of 48 months:$91,225 ($1,025 higher trade-in per cart)
•Efficiency of a 200-pound lighter cart with the lithium battery, which leads to:
o Less turf damage on the course due to less cart weight
o Less tire wear, and correspondingly less tire expense, due to less cart weight
•Less amp hour energy consumption per round (Lithium battery is lowest in cart history)
•Lower environmental impact (Less than 10% of the number of lead batteries recycled)
•5-year warranty with no amp hour limits on batteries (Unprecedented offer in industry)
•Cleaner air without acid spills or the need for cart barn ventilation as with lead battery
•Less operational disruptions due to lead battery change outs (Two times over 48-months)
•Higher guest satisfaction due to confidence in dependable and powerful batteries
•More cart uptime means better cart availability, which enhances the patron experience
Currently, only one well-established maker of golf carts —EZGO,Inc. -offers the lithium battery
product.Another well-established maker of golf carts —Club Car,LLC —offers a lead battery
product.Proposals for carts from each of these makers were received and evaluated.The table
below is a pre-tax cost comparison of the proposals and battery life cycle cost of each golf cart.
Golf Cart Comparison (89 Carts)EZGO RXV Elite Club Car Precedent i3
Cost of Carts -Delivered $656,286 $494,689
Cost of Mid-Life Cycle Batteries $0 $106,800
Cost of Carts and Life Cycle Batteries $656,286 $601,489
Trade-In Value of Carts $242,525 $151,300
Net Total Cost w/Trade $413,761 $450,189
A pre-tax cost comparison of the ancillary carts from these two makers reflects a nominal
difference of $204, in favor of EZGO Inc.
Based on the above information, the Golf Course Steering Committee is recommending that
Kemper Sports Management purchase 89 EZGO RXV Elite golf carts and six ancillary carts from
EZGO,Inc.,in an amount not to exceed $605,000.This action is consistent with the City of
Carlsbad's Vision and Mission, and the following Community Values:Access to recreation and
active, healthy lifestyles; the local economy, business diversity, and tourism; and sustainability.
Fiscal Analysis
tZbU otters 48 month financing at approximately five percent annual interest.The actual
average interest rate of return for the city's portfolio in Fiscal Year 2015-16 was 1.15 percent.
For purposes of analysis, however, staff assumed a 1.80 percent average annual interest rate as
the expected average annual interest rate earned on the Treasurer's Portfolio over the next four
years.The difference between paying the city 1.8 percent and paying EZGO Inc.5 percent
interest,results in an estimated savings of $41,000 to the Crossings at Carlsbad over the 48
month period.
Due to these anticipated savings,the Golf Course Steering Committee is recommending
purchasing the stated carts with Golf Course Fund monies, in order to avoid the higher interest
rate of EZGO Inc.The Crossings at Carlsbad will make monthly payments to the Golf Course Fund
over the 48 month period,and will incur only the average interest rate earned on the city's
portfolio per fiscal year—which is currently at 1.15 percent
Next Steps
it the recommended action is taken,Kemper staff will order the stated 89 golf carts and six
ancillary carts from EZGO Inc.,and the Administrative Services Director will appropriate funds
from the Golf Course Fund for purchase of the carts.The anticipated delivery of these carts will
be 4-6 weeks from the date of order.
Environmental Evaluation (CEQAI
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.
Public Notification
Kemper staff has notified course patrons expressing dissatisfaction in the performance of the
existing golf carts that a plan is being developed for replacements.Patrons have been pleased
to learn that the proposed replacement carts include upgraded batteries.
Exhibits
1.Resolution approving the purchase of 89 golf carts and six ancillary carts from EZGO Inc., in
an amount not to exceed $605,000, and authorizing the Administrative Services Director to
appropriate funds from the Golf Course Fund to The Crossings at Carlsbad.
2.EZGO RXV Elite product information sheets on innovation, energy, and advantages.
EXHIBIT 1
RESOLUTION NO. 73
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC
FINANCING AUTHORITY APPROVING THE PURCHASE OF 89 GOLF CARTS
AND SIX ANCILLARY CARTS FROM EZGO INC.,IN AN AMOUNT NOT TO
EXCEED $605,000,AND AUTHORIZING THE ADMINISTRATIVE SERVICES
DIRECTOR TO APPROPRIATE FUNDS FROM THE GOLF COURSE FUND TO THE
CROSSINGS AT CARLSBAD.
WHEREAS,the Carlsbad Public Financing Authority, hereafter the "Authority",has previously
entered into a contract with Kemper Sports Management, Inc., hereafter "Kemper", for the operation
and maintenance of The Crossings at Carlsbad Golf Course, authorized by the Authority on December
4, 2012 by Resolution No. 60; and
WHEREAS,under Section 2.23 of the contract with Kemper, the Authority is required to
approve and execute any contract exceeding $25,000; and
WHEREAS, proposals were prepared at the request of Kemper to provide the Authority with
89 golf carts and six ancillary carts for use at the golf course; and
WHEREAS,the Authority received proposals from EZGO Inc. and Club Car,LLC,for the 89 golf
carts and six ancillary carts; and
WHEREAS,the proposals were evaluated by both Kemper staff and City of Carlsbad
Administrative Services Department and Parks & Recreation Department staff; and
WHEREAS, purchase of the golf carts and ancillary carts will be paid from funds appropriated
from the Golf Course Fund; and
WHEREAS, The Crossings at Carlsbad will repay the Golf Course Fund 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 of the average annual earnings on the city's portfolio on June 30 of the previous
fiscal year, which is currently 1.15 percent.
NOW, THEREFORE,BE IT RESOLVED by the Board of Directors of the Carlsbad Public Financing
Authority that:
1.The above recitations are true and correct.
2.The purchase of the stated carts from EZGO Inc., by The Crossings at Carlsbad Operator,
Kemper Sports Management, Inc., in an amount not to exceed $605,000,is approved, and
the Chairman of the Board is authorized and directed to execute the proposal from EZGO
Inc.,to provide 89 EZGO RXV Elite golf carts and six ancillary carts, attached hereto as
Attachment A.
3.The appropriation of funds from the Golf Course Fund to The Crossings at Carlsbad, by the
Administrative Services Director, in an amount not to exceed $605,000,is approved.
PASSED, APPROVED AND ADOPTED at a Special Meeting of the Board of Directors of the
Carlsbad Public Financing Authority on the 14th day of February, 2017, by the following vote, to wit:
AYES:M. Hall,K.Blackburn, M. Packard.
NOES:C.Schumacher.
ABSENT:M. Schumacher.
MA HALL, Chairman of the Board
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PREPARED FOR:
The Crossings at Carlsbad
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Dear, Mr. Tate Stull
The Crossings at Carlsbad
E-Z-GO is honored to prepare this exclusive revised proposal for The Crossings at Carlsbad. For over 60 years,E-Z-GO
has pioneered the golf car industry with its innovative, reliable and durable vehicles.E-Z-GO is committed to providing its customers
with vehicle solutions that exceed expectations and perform to the demands of their facilities.
E-Z-GO and Cushman vehicles are manufactured in our globally recognized, award-winning facility in Augusta,GA.Whether you
choose the "TXT or RXV"golf car, you can expect proven reliability and the industry's latest innovations.Cushman utility and
hospitality vehicles are available in electric,gas and diesel models, and are purpose-built to tackle all of your operation's
maintenance and hospitality needs.
But the E-Z-GO advantage goes beyond our products.When you choose E-Z-GO, you gain access to a level of service and support
unsurpassed In the Industry, through the largest fleet of factory direct service technicians, our strong network of factory-owned
branch locations and authorized distributors.
E-Z-GO is dedicated to advancing the game of golf and the Industry that isthe engine behind It.We are a Platinum Corporate
Advantage partner of the Club Managers Association of America,a silver partner with the Golf Course Superintendent
Association of America, and provide support to numerous regional and local association chapter and events throughout the
world of golf.
Our reputation for quality, performance and customer service has made us fortunate to enjoy the company of some of the most
famousfacilities In golf, from Pebble Beach, Spyglass Hill, and Pinehurst Resort.
As you review the enclosed materials, please do not hesitate to contact me with additional questions.I look forward to hearing
from you soon.
With sincere appreciation,
Mike Cross
Fleet Sales
760-285-0430
mcross(Wtextron.com
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OUR HISTORY
During the hot summer of 1954, in a cramped one-room machine shop in Augusta, two brothers founded E-Z-GO from
a simple belief that they could build a better golf car,to better meet the need of the customer.
From those humble beginnings,E-Z-GO has grown into a global leader in the golf industry and light transportation,
building many thousands of vehicles each year from its global headquarters in Augusta, which has been recognized as
one of the top 10 manufacturing facilities in North America by Industry Week magazine.E-Z-GO manufactures multiple,
extensive lines of vehicles, including golf cars, utility vehicles, personnel carriers, refreshment vehicles and is able to
customize any vehicle to your unique requirements.
E-Z-GO became part of Textron Inc.(NYSE: TXT) in 1960.This global, multi-industry company leverages its global
network of aircraft, defense, industrial and finance businesses to provide customers with innovative solutions and
services.Textron is known around the world for more than a century for its rugged, reliable and versatile work
machines.
Today, nearly 60 years after the first E-Z-GO vehicle was built in that sweltering one-room shop,E-Z-GO still has
that single belief -that it exists to build vehicles and services that exceed the expectations of the customer.
It is the drive to sustain and improve that position -to offer an unparalleled combination of world-class products,
advanced technology, manufacturing expertise, and extraordinary service -that leads E-Z-GO to cover new ground.
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PRICING
The Crossings at Carlsbad
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89 E-Z-GO RXV/Elite 2017 CASH $5,794.00 $515,666.00
2 Cushman Oasis Beverage 2017 48 mo Exec Demo $0.00 $0.00
1 Cushman Shuttle 6 2017 CASH $11,220.43 $11,220.43
1 Cushman Hauler Pro 2017 CASH $10,929.20 $10,929.20
1 Cushman Diesel Range 2017 CASH $14,641.00 $14,641.00
1 Cushman Shuttle 2 2017 CASH $10,016.00 $10,016.00
89 TKV 10" CPS 2017 CASH $1,580.00 $140,620.00
Sub Total $703,092.63
Tax 7.75%$54.489.68
Total $757,582.31 I
90 EZGO RXV 2013 Trade In Amount $1,700.00 $153,000.00 I
Total after trades $604582.31
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USB Ports 10" Tourmax Alloy Wheels Premium HI:h Back Seats
Lithium Batteries w/a Five Year Warranty Sand Bottles (2)Upgraded Steering Wheel
Parts Package Fold Down Windshield Custom logo
Cooler Coastal Package # Decals
Lease Schedule:N/A Payment Months:Net 30 Days
Delivery:Mar-2017 First Pay:Net 30 Days
SPECIAL CONSIDERATIONS:
EZGO estimates the FMV of a used 2017 RXV Elite golf car in the year 2021 to be 2,650 -2800. The FMV is an
estimate and not a guarantee. The actual value will depend on the condition of the car and market value at that time.
EZGO will write a check for your current fleet of 90 2013 RXV's in the amount of $1,700 per car for a total of $153,000.
All trades must be in running condition and a fleet inspection will be done prior to pick up.
It is the clubs responsibility to either repair damages noted or pay for these repairs to be completed. All cars must have
a working charger. All trade values are contingent upon management approval. Insurance cost are not included.
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Accepted by:Accepted by:—
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EXHIBIT 2
RXV ELITE Energy Savings Calculation
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A Textron Company
Course Name The Crossing at Carlsbad
Course Contact Tate Stull
5800 The Crossings Dr, Carlsbad,
Course Address CA 92008
Current/Comparative Cars Club Car Precedent
Number of Vehicle Rounds 50,000
Number of Vehicles 90
Ownership Term (month)48
Cost per kWhr 0.14
Monthly Energy Savings Per Car ($)7.54
Monthly Watering Savings Per Car ($)1.52
Monthly Direct Savings Per Car 9.06
Monthly Direct Savings Per Fleet 815.25
Lifetime Energy Savings (5)32,580
Lifetime Watering Savings (5)*6,552
Lifetime Direct Savings 39,132
* Does not include filling systems, filters, or de-ionizers
Indirect Benefits and Savings Opportunities
Reduced cleaning, inspection, maintenance, service, and battery replacement
Faster recharging times, 'top off opportunity charging
Responsive hill climbing and smooth ride
250+ pound weight reduction
Range at the end of term/life
Friendly on the environment
Longer warranty
Battery Warranty-ELITE 5.0 Years
Battery Warranty-Current Fleet *1.7 Years
Increased Warranty (Years)3.3 Years
*If current fleet warranty is less than 4 years it is limited
by amp hour allotment
he energy savings potential for the RXV ELITE System is based on real course side by side comparisons certifie
by an independent testing laboratory. The actual realized savings for each course will vary based on a tour s
unique topography, total distance, style of play and local utility rates.
trt.y
E-Z-GO's History of Innovation
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•E-Z-GO, Founded in 1954 si;
•1969: Rack and pinion steering
•1984: Fully automatic charger
•1994: Powder coat protection
•1995: Inductive throttle sensor
•1995:Automotive-quality body panels
•1999: Regenerative braking, anti-rollback and diagnostic capabilities, Precision Drive
•2002: Industry's first to become ISO 9001 and 14001 certified
•2007: High frequency charger, PowerWise QE
•2008: AC Drive with full-time regenerative braking
•2008: Intelli-Brake automatically applied parking brake and downhill speed control
•2009: TruCourse Technology
•2010: 2Five LSV
•2011: Exceed hybrid technology
•2014: 72V AC utility powertrain •
•2016: 4 wheel hydraulic brake system with Intelli-Brake
•2017:ELiTE lithium battery technology
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Competitive Energy Consumption
Vehicle Energy Consumption per Round
6,100 yd course (White), 6.4mile loop, 890 ft elevation change
vi --28.0 27.7
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Club Car E-Z-GO Yamaha E-Z-GO E-Z-GO E -Z-GO
Precedent TXT Drive AC RXV TXT ELiTE RXV ELiTE
•Net Regen
RXV ELITE, The most efficient golf car... Ever
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Competitive Energy Requirements
Energy Requirement From Outlet per Round, Vehicle & Charger
6,100 yd course (White), 6.4mile loop, 890 ft elevation change
2.0 --'
1.5
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Club Car E-Z-GO Yamaha E-Z-GO E -Z-GO E-Z-GO
Precedent TXT Drive AC RXV TXT ELITE RXV ELITE
More efficient charging, dramatic reduction in power bills
Vehicle Energy Consumption per Round
0
45
40 0
Estimate for The Crossing at Carlsbad
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E-Z-GO Club Car E -Z-GO
RXV Precedent RXV ELITE
We predict roughly a 40% improvement in vehicle efficiency at the
Crossings at Carlsbad vs. Precedent
Charging will provide additional savings
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•Crossing at Carlsbad
The Crossings at Carlsbad is a VERY high energy usage course.The ELITE system was
designed specifically around this course and its energy usage.
Based on January 26, 2013 Service Call
Monthly gross energy use:1,124 amp hours (RXV)
Distance :7.45miles
Elevation gain:1,292 ft
Estimated energy usage and warranty:
RXV ELiTE, 5 year warranty
versus
Precedent 1.7 year to consume 25k amp hour warranty
Triple the warranty +lower cost to operate +no maintenance battery
=Better investment
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ELITE Key Highlights
Zero Maintenance Cost-Saving 5 Year Warranty
Energy Efficiency i4;yst0-4A/4_4„
50 x 3 x 20 x 5 =SO
VEHICLES WRITES INES YEAR
WAhAiNP z=t MRS MORE
\tRANyCfAVECLE59%EFFICIENTLIMA
VS. CLUB CAR
it.MORE5270EFFICIENT
VS. YAMAHA
Turf Protection Consistent Performance Smart Batteries Eco Friendly
49LBs to
ITHIUM BATTERIES oununerms ECO
VS.PRIGNDLY
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328LBs
LEAD-ACID BATTERIES I 3 4
YEARS
The most efficient golf car to operate, ever!s
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ELITE Advantages
Advantages for the course
•Reliability :consistently makes rounds, even at end of the lease
•Less turf stress: 200+ pounds lighter
•Durable: the battery will last the entire lease term
•5 year warranty, no amp hr less exposure to out of pocket expenses
•Maintenance free:serve customers not cars, no watering
•Efficiency: vehicle and charger efficiency improvement
•Responsive: improved ride quality and nimble hill climbing
•Uptime: recharges faster, full recharge within 4 hours
•Environmental:Less material to recycle at longer intervals
•Clean: No acid spills or car barn ventilation requirements
A significant improvement vs.lead acid batteries