The URL can be used to link to this page

Home My WebLink About2007-03-13; Public Financing Authority; 22; Golf Course Maintenance equipment lease4^cps\ '^j" J^j|Kr ^ilifjll/ AB# MTG. DEPT. fc CARLSBAD PUBLIC FINANCING AUTHORITY - AGENDA BILL S% 22 3/13/07 PW - ENG ACCEPT PROPOSAL AND APPROVE A LEASE AGREEMENT FOR GOLF COURSE MAINTENANCE EQUIPMENT FOR THE CROSSINGS AT CARLSBAD GOLF COURSE DEPT. HEAD "^\^ CITY ATTY. f/^ff CITYMGR. /j5jb/ .- r^\ RECOMMENDED ACTION: It is recommended the Board of ADOPT RESOLUTION NO. 30 Directors of the accepting a Carlsbad Public Financing Authority proposal from Golf Ventures West Incorporated to furnish maintenance equipment to be utilized by the Authority's golf course operator Kemper Sports Management and approving a lease - purchase agreement with California First National Bank for financing of the lease. ITEM EXPLANATION: Operation of The Crossings at Carlsbad Golf Course by Kemper Sports Management requires the acquisition of various pieces of specialized golf course maintenance equipment. Kemper Sports personnel prepared a formal Request for Proposal (hereafter "RFP") including a detailed equipment list and performance and maintenance service criteria for this equipment. The RFP was distributed to several golf course maintenance equipment manufacturers and suppliers. Kemper received three (3) competitive proposals in response to this RFP. Kemper Sports personnel consulted with and field-tested the equipment proposed by the three (3) firms responding to the RFP over a thirty (30) day period. Subsequent review of the three (3) proposals by representatives of both Kemper Sports and City staff concluded the overall "best value" proposal was submitted by Golf Ventures West, Incorporated of San Diego. The following is a summary of the three (3) proposals received in response to the RFP: FIRM SUBMITTING PROPOSAL AA Equipment Incorporated, San Diego, California Golf Ventures West Incorporated, San Diego, California Turf Star Incorporated, Vista, California BRAND OF EQUIPMENT John Deere Jacobsen Toro PRICE $664,573.73 $749,877.24 $822,446.28 A review of the three (3) proposals received indicated that both AA Equipment and Turf Star provided either incomplete quotations on requested equipment or quotations on alternative equipment that was judged to be less suitable for the maintenance of this particular golf course. Because of the topographic challenges of the golf course layout, field-testing of the equipment by Kemper Sports maintenance staff confirmed the Jacobsen line of equipment to be superior in many ways to other equipment in this particular application. In a "best value" review of the equipment quoted by AA Equipment Incorporated, compared with the equipment quoted by Golf Ventures West, the Jacobsen line of maintenance equipment was judged to be superior to the John Deere line in terms of being specialized for the intended use, more durable, more "heavy duty" and better suited to the terrain on this golf course, along with other factors. Golf Ventures West will provide onsite maintenance and repair of the equipment wherever possible, onsite routine service training of Kemper Sports maintenance personnel, local access to a complete line of all replacement parts, and the furnishing of substitute or rental equipment for any maintenance equipment requiring an extended period of time for repair. Representatives of both Kemper Sports and City staff who reviewed the proposals recommend acceptance of the proposal from Golf Ventures West Incorporated based upon an overall "best value" review. DEPARTMENT CONTACT: FOR CITY CLERKS USE ONLY. BOARD ACTION: APPROVED X CONTINUED TO DATE SPECIFIC DENIED D CONTINUED TO DATE UNKNOWN CONTINUED D RETURNED TO STAFF WITHDRAWN D OTHER - SEE MINUTES AMENDED D Dn Page 2 Proposal Protest The Authority received a letter of protest dated January 17, 2007 (attached as Exhibit 2) from Turf Star Incorporated raising concerns regarding the equipment selection process. This matter was referred to the City's Purchasing Manager for an evaluation. Attached, as Exhibit 3, is a copy of the Purchasing Manager's response to Turf Star dated February 15, 2007 concluding that applicable rules and regulations of the Authority governing the "best value" acquisition of this equipment were followed. This matter requires no further action by the Authority at this time. ENVIRONMENTAL IMPACT: The Planning Director has determined the acquisition of maintenance equipment for this project is a General Rule Exemption under Section 15061 (b) (3) of the Guidelines of the California Environmental Quality Act since the activity will have no significant effect on the environment. FISCAL IMPACT: It is customary in the golf course operation industry to lease - purchase the large fleet of maintenance equipment needed for a project of this size. The larger riding equipment, in most cases, has an extended service life well beyond the proposed five (5) year lease term. At the conclusion of the lease, the equipment becomes the property of the Authority and can continue to be utilized for some period of time thereafter. Several factors will influence the ultimate operational life of the equipment such as the manner in which it is used by maintenance personnel, the level of maintenance and repair, the topography of the golf course, frequency of use, weather, and a number of other influences. Kemper's Maintenance Superintendent has indicated they intend to keep the equipment in excellent appearance and working order and will strive to extend the service life of the maintenance equipment as far as possible. The Finance Department has secured three (3) equipment lease - purchase proposals as indicated below based upon the price quotation from Golf Ventures West. GOLF COURSE EQUIPMENT LEASING QUOTES February 2007 California First National Bank Estimated Payment Estimated Interest Rate Government Leasing Company Estimated Payment Estimated Interest Rate Textron Financial Corporation Estimated Payment Estimated Interest Rate Monthly $14,042.88 $14,088.94 $14,412.64 5-Year Lease Payment Annual $168,514.56 $169,067.32 $172,951.68 Total 5 Years $842,572.80 4.8500% $845,336.61 4.9896% $864,758.40 5.9628% Total equipment to be financed $749,877.24 The interest rate and total amount of payments under the quotation from California First National Bank contains the most favorable lease - purchase terms. The proposed lease - purchase agreement with California First National Bank for this transaction is currently being negotiated with the City Attorney and once acceptable to the City Attorney, is recommended for approval by the Authority. Payments are made monthly and these will become a component of the current "start up" budget for the project through June 30, 2007 and thereafter within the "annual operating" golf course budget beginning with Fiscal Year 2007 - 2008. Funds have been established within the current "start up" budget for these expenses. Once the first "annual operating" budget is prepared by Kemper and submitted to the CPFA Board for review and approval, funding will be consistent with that budget cycle in succeeding fiscal years. PageS EXHIBITS: 1. Resolution No. 30 accepting the proposal from Golf Ventures West Incorporated for the furnishing of golf course maintenance equipment and approving a lease - purchase agreement with California First National Bank upon acceptance by the City Attorney. 2. Letter dated January 17, 2007 from Turf Star Incorporated. 3. Letter dated February 15, 2007 from the City's Purchasing Manager. DEPARTMENT CONTACT: John Cahill, (760) 602-2726, icahi@ci.carlsbad.ca.us 1 RESOLUTION NO. 30 2 A RESOLUTION OF THE BOARD OF DIRECTORS OF THE CARLSBAD PUBLIC FINANCING AUTHORITY ACCEPTING A 3 PROPOSAL FROM GOLF VENTURES WEST INCORPORATED FOR THE ACQUISITION OF GOLF COURSE MAINTENANCE 4 EQUIPMENT BY THE AUTHORITY FOR THE CROSSINGS AT CARLSBAD GOLF COURSE. 5 WHEREAS, the Carlsbad Public Financing Authority, hereafter the "Authority", has 6 previously entered into a contract with Kemper Sports Management Incorporated for the operation and maintenance of the Carlsbad City Golf Course Project, The Crossings at Carlsbad Golf Course, 8 hereafter referred to as the "Project"; and 9 WHEREAS, Requests for Proposal were prepared and distributed seeking proposals to provide the Authority with golf course maintenance equipment; and WHEREAS, the Authority received three (3) formal proposals which were subsequently 11 evaluated by representatives of both Kemper Sports Management and City staff utilizing an overall 12 "best value" review in accordance with Article V, Section 5.3 of the Rules and Regulations of the 13 Authority governing the acquisition of equipment, materials, and services; and 14 WHEREAS, the Authority has received three (3) proposals for the financing of a lease- , 5 purchase of said equipment. NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Carlsbad 16 Public Financing Authority of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 18 2. That a proposal from Golf Ventures West Incorporated to furnish the requested 19 maintenance equipment is hereby accepted. 20 " 21 " 22 " 23 " 24 " 25 // 26 // 27 28 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 Special Meeting of the Carlsbad Public Financing Authority held on the 13th day of March, 2007, by AYES: Board Members Lewis, Kulchin, Hall, Packard NOES: None ABSENT: Board Member Sigafoose /M / / /^ I7A,/ ffl c/^/ /////Jy /// /^ the following vote: 9 i1 jw/s/r- *^cr<& r CLAUDE MlEWIST Chairman of the Board ATTEST: O O Q^ , r\6)UlA^ O • CtfA&JLW 7V^/yA LORRAINE M.,XViQpD, Secretary ' 7 /J (SEAL) ^1W$%,. /$&*"*$& = Q;^ §M- ^ tD'^"1 /O - ^//mn^^ EXHIBIT 2 STAR (800)585-8001 www.turfstar.com January 17, 2007 ' Mark Steyaert City of Carlsbad Community Service Department 1200 Carlsbad Village Drive Carlsbad, CA 92008 Dear Mark, I am writing to you because we here at Turf Star are baffled by the equipment procurement process at the new Crossings at Carlsbad Golf Course. We have had an outstanding relationship with The City of Carlsbad for many years but I am concerned that the methods used on this project to date have seemed arbitrary and not terribly transparent. Our first intimation of this was with the irrigation system selection. At a minimum, this is typically a Rainbird vs. Toro competition. With The Crossings, Rainbird was selected and we were never truly given a chance to bid. A more common scenario in these situations is the system is designed Rainbird or Toro but each vendor is given the opportunity to bid as an alternate with equipment approved by the irrigation designer to keep products more or less equal. The maintenance equipment selection process was similarly unusual. With a public golf course specifications are usually developed by your management company, in this case Kemper (with whom we have worked many times), and the package is put out to bid or purchased off such state contracts as CMAS, CalSave, or even GSA. Typical bidders on golf equipment packages are Jacobsen, John Deere, and Toro. We were instructed to bid specific products which are proprietary, even though we had products that matched the competition. Even though we pointed this out, it put us at a significant disadvantage from a cost standpoint. We will provide to you, as an example, what pricing would have been if specifications were more "apple to apple". I am concerned that in procuring equipment in this manner, the end result might be more reflective of a particular individual's preferences rather what is best and most cost effective for the city. I look forward to discussing this with you. Sincerely, Leonard Gregory President rr •Fax (760) 345-4297 Fax ,714) 990-8729 f^^™,* "^^ <* 94545 RanCh° COTd°^ CA 95742 Vista CA 92083 Fax 15,91277-71 23 Fax (51 0| 785-3576 Fax ,9 1 6| 635-3448 Fax (760) 734-4285 EXHIBIT 3 City of Ca..- Finance Department February 15, 2007 Mr. Leonard Gregory President Turf Star 2110 La Mirada Vista, CA 92083 Dear Mr. Gregory: I am in receipt of your letter dated January 17, 2007 to Mark Steyaert. As the Purchasing Manager for the City of Carlsbad, I was requested by the City Manager's Office to review the procurement process for golf maintenance equipment at the Carlsbad Golf Course. After interviewing representatives from Kemper Sports Management, It is my understanding that Kemper Sports consulted with the three major equipment suppliers, Jacobsen, John Deere, and Toro, several times over a thirty day period. All three companies provided equipment to be tested during the grow in of the Turfgrass. Each vendor was told specifically to bid their "best value and pricing". This is in keeping with the purchasing procedures for Supplies, Services, and Equipment, set forth in Article V, Section 5.3 of the Rules And Regulations of the Carlsbad Public Financing Authority which defines "best value" to include numerous considerations only one of which is price. An evaluation was made on the performance of the equipment based on the topography of the course, the services provided by each distributor and pricing. Based on these criteria, Jacobsen was chosen over John Deere and Toro. It appears that Kemper Sports Management followed fair and objective procedures in selecting the golf maintenance equipment for the Carlsbad Golf Course. Notwithstanding that the above procurement procedures were followed, in reviewing your quote dated January 16, 2007 which you feel is more of an "apple to apple" quote; Toro's pricing still exceeds Jacobsen's. In regard to your concern with the irrigation system, typically when large projects go out to bid, potential subcontractors and suppliers purchase a set of plans and specifications. After reviewing the specifications, they contact the General Contractors on our plan holder list to bid on the project. It is then the General Contractor's responsibility to choose what equipment is best for the project. In general, the City of Carlsbad does not intervene in the selection of subcontractors by the General Contractor. I look forward to the City of Carlsbad continuing its long relationship with Turf Star in the future. Please free to contact me, (760-602-2468) if you have any further questions. Sincerely, Colette Wengenroth Purchasing Manager 1635 Faraday Avenue • Carlsbad, CA 92008-7314 • (76O) 6O2-2430 • FAX (760) 6O2-8553 www.ci.carlsbad.ca.us • Business License (76O) 6O2-2495 • Utility Billing (76O) 6O2-2420 • Purchasing (76O) 602-2460 - FAX (760) 6O2-8556 - Bid Line (76O) 6O2-2464 7 All Receive - Agenda Item # For Information of THE CITY COUNCIL CM */ C*--^CC Pate CM_ Asst. CMj^T " n/ir,r~k i o onn7March 13, 2007 TO: CITY MANAGER VIA: Assistant City Manager FROM: Finance Director AGENDA BILL #22 - Golf Course Maintenance Equipment Lease Agreement Agenda Bill #22 - Golf Course Maintenance Equipment Lease Agreement is scheduled to be heard by the Carlsbad Public Financing Authority on March 13, 2007. There are two proposed actions included in this Agenda Bill. The first is for the Board to authorize the purchase of $749,877.24 worth of golf course maintenance equipment from Golf Ventures West Incorporated. The second action is for the Board to enter into an agreement with California First National Bank to provide lease-purchase financing for the equipment, contingent upon the City Attorney reaching agreement with California First National Bank on the transaction. The City has been unsuccessful at reaching accord with California First National Bank on the lease-purchase agreement and therefore we respectfully request that the lease- purchase action be removed from consideration during the Carlsbad Public Financing Authority Board meeting this evening. We request the Board adopt the resolution as amended with the deletion of item number 3 - approval of the lease-purchase agreement. We recommend that the purchase of the golf course equipment be considered this evening since the equipment is necessary to help maintain the golf course. We will return to the Board with a recommendation for a lease-purchase agreement with another vendor as soon as the agreement is successfully negotiated between the two parties. In addition, because we are no longer entering into an agreement with California First National Bank, we also request that AB #18,935 - Financial Guaranty with California First National Bank is pulled from the agenda. Please contact me if you have any questions or need additional information regarding this matter. Tfoank you, LISA IRVINE Finance Director c: City Attorney City Clerk Assistant City Attorney 1LHOLEQWIH MAR 13 2007 CITY OF CARLSBADCITY CLERK'S OFFICE n\ y/ T