HomeMy WebLinkAbout12 Purchase - QA Memorandum
CITY OF PALM DESERT
CITY MANAGER’S OFFICE INTEROFFICE MEMORANDUM
To: Honorable Mayor and Councilmembers From: Chris Gerry, Senior Administrative Analyst Date: July 8, 2021
Subject: City Council Agenda (July 8, 2021) Below you will find questions received by the Mayor and/or Councilmembers and answers provided by City staff regarding tonight’s Council meeting agenda.
Consent Calendar – Item 12 Item Description: Request for authorization for purchase of two John Deere tractors from The Toro Company, Bermuda Dunes, California, in the amount of $140,969.47.
• Question: I see under the Consent Calendar that staff is proposing the purchase of two
tractors. I have requested in the past that leasing this type of equipment be
considered as an alternative to a purchase. Was such a comparison done in this
instance?
o Answer: Staff did receive a quote from the company for a capital lease. The total payments for the 60-month lease proposal with fees was $152,581 before sales taxes versus the pre-tax purchase price of $130,427. Therefore, there would be an interest savings of $22,154. Finally, staff did not explore an operating lease because the intention is to utilize the tractors well beyond a typical lease term.