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HomeMy WebLinkAboutC31380 Lease Agreement for Procuring Golf Course Maintenance EquipmentCITY OF PALM DESERT STAFF REPORT REQUEST: APPROVE THE LEASE AGREEMENT BETWEEN THE DESERT WILLOW GOLF RESORT AND TURF STAR IN THE AMOUNT OF $329,867.52 ANNUALLY FOR A TERM OF 60 MONTHS ($1,649,337.60 CUMULATIVE) FOR THE PURPOSE OF PROCURING GOLF COURSE MAINTENANCE EQUIPMENT (Contract No. C31380) SUBMITTED BY: Heather Buck, Project Coordinator APPLICANT: Turf Star 79-253 Country Club Drive Bermuda Dunes, CA 92203 DATE: CONTENTS: Recommendation December 8, 2011 National Intergovernmental Purchasing Alliance Information Bid Proposal List of Trade -In Equipment Kemper Discount Letter Financing Entity Letter for Additional Equipment By Minute Motion: 1. Approve the Lease Agreement for golf course maintenance equipment for the Desert Willow Golf Resort in the amount of $329,867.52 annually for a term of 60 months ($1,649,337.60 cumulative) from Turf Star (includes tax and interest); (Contract No. C31380) 2. Declare list of Trade -In Equipment as surplus; 3. Declare three Lely Spreaders as surplus; and 4. Authorize the City Manager to approve and execute contracts for additional golf course maintenance equipment (Lely Spreaders, JCB Bucket, and Rollers) in an amount not to exceed $100,000.00 (includes tax and interest) under same Lease Agreement. Funds are available in Golf Course Expenses, Account No. 520-4195-495- 8091. Staff Report Golf Course Maintenance Equipment for the Desert Willow Golf Resort December 8, 2011 Page 2 of 4 Executive Summary The new lease agreement will provide the golf course maintenance equipment listed in the bid proposal (attached) for a term of 60 months. The current equipment has provided superior work and warranty performance. The parameters of the lease are as follows: Equipment Cost $ 1,519,504.76 Trade-in Value $ (83,499.00) Amount Financed $ 1,436,005.76 Tax (7.75%) $ 111,290.45 Monthly Payment Term (months) Total Cost $ 27,488.96 60 $ 1,649,337.60 Amount Financed $ 1,436,005.76 Tax $ 111,290.45 Interest Cost $ 102,041.39 Annual Payment I $ 329,867.52 Background The previous four-year lease agreement for golf course maintenance equipment at the Desert Willow Golf Resort has expired. As per the terms of the previous lease agreement, at the end of the term, the Desert Willow Golf Resort purchases the existing equipment and utilizes their trade-in value as part of the negotiation for new equipment. The Desert Willow Golf Resort is a nationally recognized golf destination that accommodated over 83,923 rounds of golf in fiscal year 2010/2011 alone, bringing $6,036,473 in gross green fee revenues for both courses. The purpose for the lease agreement is to provide the golf resort with equipment to maintain the approximately 215 acres of grounds. The high volume of golf rounds requires constant maintenance and course repair. If the greens and fairways are not properly cared for, play will be adversely affected. The City would like to enter into a lease agreement with Turf Star through the National Intergovernmental Purchasing Alliance (IPA) Company program. National IPA is a cooperative purchasing organization, established through a collaborative effort of public agencies across the United States with the specific purpose of reducing procurement costs by leveraging group volume. The program is similar to the California Multiple Award Schedule (CMAS), which is a state program allowing public agencies to procure goods or services at prices that have been assessed to be fair, reasonable, and competitive. Public Contract Code Sections 10290 et seq. and 12101.5 include approval for local government agencies, including general law cities to use CMAS. GArda\Heather Buck\Desert Willow\Annual RFPs\Equipment\StfRpt\StfRpt DW Equip 2011 Am Staff Report Golf Course Maintenance Equipment for the Desert Willow Golf Resort December 8, 2011 Page 3 of 4 National IPA aggregates purchasing volume of participating agencies in order to receive larger volume discounts from suppliers. Master agreements are publicly solicited and awarded through a Request for Proposals (RFP) process, and held by a principal procurement agency. National IPA serves as a government cooperative purchasing organization for agencies nationwide. Under the provisions set forth in the City of Palm Desert Municipal Code, section 3.30.260 other governmental agencies, the City of Palm Desert is allowed to participate in the IPA program. The City may participate with other governmental agencies such as the State of California, County of Riverside, or any other cities, who have through a bidding process, determined to award or purchase, supplies, merchandise, or other items needed by the City which program of the other governmental agency allows participation by this city. The City of Palm Desert would utilize the competitively solicited and ultimate award by the City of Tucson, Arizona, the principal procurement agency, for the purposes of entering into the Turf Star lease agreement (please refer to attached materials). Additionally, a Kemper Sports Management discount is applied on top of this per the attached letter. Turf Star provided three financing bids and Kemper Sports, in consultation with the City's Finance Department, has chosen the lowest cost straight 60-month bid. Staff recommends approval of the lease agreement between the Desert Willow Golf Resort and Turf Star for the lease of golf course maintenance equipment for a term of 60 months with an annual interest rate of 2.63%. The Desert Willow Golf Resort in conjunction with the Finance Department have thoroughly reviewed the proposed terms of the lease agreement, and have determined that the terms of the lease agreement are reasonable and proposed costs are in accordance with the previous agreement and current market conditions. The Finance Department and the City Attorney have determined that the National IPA program meets the provisions set forth in the City of Palm Desert Municipal Code and Purchasing Policy. Additional Equipment The following equipment is not available through the National IPA program, but is required for operation of the golf course: • (4) Lely 2010 Spreaders • (1) 4 in 1 JCB Bucket • (2) Tru-Turf Rollers G:\rda\Heather Buck\Desert Willow\Annual RFPs\Equipment\StfRpt\StfRpt DW Equip 2011.doc Staff Report Golf Course Maintenance Equipment for the Desert Willow Golf Resort December 8, 2011 Page 4 of 4 Staff will solicit bids for the above equipment separately; however, the financing entity has agreed, per the attached letter, to honor the leasing terms for this additional equipment in an amount not to exceed $100,000.00. Fiscal Analysis The total net principal cost for the equipment is $1,436,005.76. The $1,436,005.76 will be financed through a municipal lease at a monthly lease payment of $27,488.96, which will result in an overall/inclusive cost for the equipment for the 60 month lease period of $1,649,337.60. The cost for the additional equipment and leasing shall not exceed $100,000.00. No appropriation is required; funding is available in the current Desert Willow budget. Submitted By: Heather Buck, Project Coordinator Department Head: n McCarthy, ACM Ma;Kn Alvarez, Redevdlopment Manager CITY COUNCIL✓✓ MON APPROVED DENTED RECEIVED OTHER MEETING DATF _1 opmer*YES: � �1 41e► NOES: ABSENT: ABSTAIN: n� Paul S. Gibson, Director of Finance VERIFIED BY: Original on File with Ci lerk's Office Approval: M. Wohlmuth, City Manager GArda\Heather Buck\Desert Willow\Annual RFPs\Equipment\StfRpt\StfRpt DW Equip 2011.doc Willow 6ea. Toro 3150 Riding greens mowers 6ea. Extra reels for 3150,11 bladed 2 sets Extra rollers & scrapers for extra reels 1 set Greens Spikers 2 sets Verticute reels (dynblade) 4ea. Toro 648 Walk behind Aerator 6ea. Toro Sand 3040 Pro bunker rakes 3ea. Mid mount asm for 3040 bunker rake 3ea. Manual blade 3ea. Weeder tine toolbar for 3040 4ea. Toro 5610 Faiway mowers 5ea. Extra set of reels for 5610 Sea. Extra set of roller scrapers-5610 3ea. Toro Pro Core 864 Fairway aerator 4ea. Toro Pro Force debris blower 1 ea. Toro 1800 straight drop topdresser 1 ea. 1 /3 Flatbed for Workman/1800 1ea. Bracket-Topdresser lift 1 ea. Toro Multi Pro 5800 fairway sprayer 28ea. Toro Workman MDX mid size vehicle 5ea. Folding windshields 10ea, Toolboxes 1 ea. Toro Pro Pass spinner topdresser 4ea. Toro Reelmaster 3100-D Trim mower 4ea. Toro 7000-D Rough mowers ($27,689.53) ($1, 707.88) ($1,062.34) ($5,719.62) ($22,658.92) ($13,558.65) ($984.39) ($1,049.43) ($652.60) ($43,947.63) ($2,246.48) ($50.24) ($24, 538.67) ($6,510.15) ($10,176.70) ($191.07) ($386.14) ($29,270.18) ($59,886.93) 11/3/2011 $166,137.18 $10,247.28 $2,124.68 $3,876.16 $11,439.24 $90,635.68 $81, 351.90 $2,953.17 $3,148.29 $1,957.80 $175,790.52 $11,232.40 $251.20 $73,616.01 $26,040.60 $5,684.25 $430.87 $143.50 $37,061.53 $284,947.60 $955.35 $3,861.40 $9,305,64 $117,080.72 $239, 547.72 lea. Toro HDX-D w/200 gallon sprayer 5ea. Toro Workman HDX-D diesel vehicle tea. Toro Workman MDE (Electric) $33,239.91 ($21,283.32) $106,416.60 ($10,013.78) $20,027.56 $1,519,504.76 117,761.62 Tax 7.75% 1,637,266.38 Trade-ins 1,553,767.38 0 STAR Desert Willow- trade in list See quote for trade in value Property # Make Model Serial # ' 1176 Napa 295 Amp Welder 5116822 1180 Ammco 6 Ton Lift P97072566646 1185 Homelite LRI "0 Generator 265571 1192 Napa 83-314 Mig Welder A61796 1213 Toro 686 Fairway Aerifier 4485070118 1221 Toro Sand Pro 885660353 1225 Snapper Edger 45763986 1256 Pressure Washer 295567 1296 Jacobsen Aerator 2753 2208 Forks 6000 lb. 2821 2210 Edger NIA 2211 Edger N/A 2224 Blue Bird Renovator N/A 2225 Blue Bird Renovator N/A 2226 Blue Bird Renovator WA 2227 Blue Bird Renovator N/A 2228 Sado Scalping Mower N/A 2229 Sado Scalping Mower N/A 2231 Sado Scalping Mower N/A 2232 Sado Scalping Mower 202085 2234 Sado Scalping Mower 202093 ' 2235 Sado Scalping Mower N/A 2843 Mathew 72" Flail 57207 2844 Tru Cut Mower C27 813613 2855 Tru Cut Edger 28716 3216 Jacobsen PGM Green Mower 3468-62280 3223 Jacobsen PGM Green Mower 3467-62280 3225 Jacobsen PGM Green Mower 3431-62280 3243 Jacobsen LF3800 2538-67867 3256 Mower Caddy Greens Mower Trailer 10385 3257 Mower Caddy Greens Mower Trailer 18392 3292 Jacobsen B-40 Blower 2370 ' 3294 Mathew 72" Flail 57814 3324 Snapper 48" Rotary Mower 1652157 3338 Turfco Top Dresser Spinner D00131 Property # Make Model Serial # 3402 John Deere 2500A Greens Mower TC250AD040528 3403 John Deere 2500A Greens Mower TC250AD040529 3404 John Deere 2500A Greens Mower TC250AD040535 3405 John Deere 2500A Greens Mower TC250AD040536 3406 John Deere 2500A Greens Mower TC250AD040543 3407 John Deere 2500A Greens Mower TC250AD040544 3408 John Deere 3235C Fairway Mower TC3235CO30560 3409 John Deere 3235C Fairway Mower TC3235CO30599 3410 John Deere 3235C Fairway Mower TC3235CO30649 3412 John Deere 2653A Utility Mower TC2653D140880 3413 John Deere 2653A Utility Mower TC2653D140881 3414 John Deere 2653A Utility Mower TC2653D140882 3415 John Deere 2653A Utility Mower TC2653D140883 3416 John Deere 2653A Utility Mower TC2653D140884 3417 John Deere 2653A Utility Mower TC2653D140893 3418 John Deere 1905 Rough Mower DM1905X195267 3419 John Deere 1905 Rough Mower DM1905X195337 3420 John Deere 1905 Rough Mower DM1905X195343 3421 John Deere 1905 Rough Mower DM1906X195346 3422 John Deere 1200H Bunker Rake TC1200HO20156 3423 John Deere 1200H Bunker Rake TC1200HO20157 3424 John Deere 1200H Bunker Rake TC1200H020160 3425 John Deere 1200H Bunker Rake TC1200HO20161 3426 John Deere 1200H Bunker Rake TC1200HO20166 3427 John Deere 1200H Bunker Rake TC1200HO20167 3428 John Deere 2030 Pro Gator TC203OA060497 3429 John Deere 2030 Pro Gator TC203OA060504 3430 John Deere 2030 Pro Gator TC203OA060507 John Deere HD300 Srayer 3431 John Deere 2030 Pro Gator TC203OA060508 John Deere HD200 Srayer 3432 John Deere 2030 Pro Gator TC203OA060511 3433 John Deere TX Turf Gator WOTURFDO04069 3434 John Deere TX Turf Gator WOTURFDO04081 3435 John Deere TX Turf Gator WOTURFDO04116 3436 John Deere TX Turf Gator WOTURFDO04117 3437 John Deere TX Turf Gator WOTURFDO04118 3438 John Deere TX Turf Gator WOTURFDO04119 3439 John Deere TX Turf Gator WOTURFDO04121 3440 John Deere TX Turf Gator WOTURFDO04122 3441 John Deere TX Turf Gator WOTURFDO04265 3442 John Deere TX Turf Gator WOTURFDO04267 3443 John Deere TX Turf Gator WOTURFDO04269 Property # Make Model Serial # 3444 John Deere TX Turf Gator WOTURFDO04270 3445 John Deere TX Turf Gator WOTURFDO04271 3446 John Deere TX Turf Gator WOTURFDO04272 3447 John Deere TX Turf Gator WOTURFDO04273 3448 John Deere TX Turf Gator WOTURFDO04274 3449 John Deere TX Turf Gator WOTURFDO04275 3450 John Deere TX Turf Gator WOTURFDO04276 3451 John Deere TX Turf Gator WOTURFDO04277 3452 John Deere TX Turf Gator WOTURFDO04278 3453 John Deere TX Turf Gator WOTURFDO04294 3454 John Deere TX Turf Gator WOTURFDO04295 3455 Vantage White Truck LFWAIF1216JB50021 3456 Vantage White Truck LFWA1 F1236JB50022 3457 Vantage White Truck LFWAOF1256JB50023 3458 Vantage White Truck LFWA1 F1226JB50027 3459 Vantage White Truck LFWA1F1296JB50025 3460 Vantage White Truck LFWAIF1266JB50029 3461 Vantage White Truck LFWAlF1246JB50045 3462 Vantage White Truck LFWA1F1236JB50067 3463 Vantage White Truck LFWA1 F1206JB50074 3464 Vantage White Truck LFWA1F1266JB50077 3465 John Deere 800 Aercore TC800AC060152 3466 John Deere 800 Aercore TC800AC060373 3467 John Deere 800 Aercore TC800AC065019 3468 John Deere 800 Aercore TC800AC065020 3469 John Deere 2000 Aercore TC200OX035099 3470 John Deere 2000 Aercore TC2000X035100 3471 John Deere 2000 Aercore TC2000X035102 3480 Buffalo Blower Turbine 12426 3481 Turfco Top Dresser Straight J00104 3482 Turfco Top Dresser Spinner G00550 3486 Tru-Turf RS66 Roll n Slice 11231 3487 Tru-Turf RS66 Roll n Slice 11232 3488 John Deere 11 Blade Reels Set of 3 BM18973 3489 John Deere 11 Blade Reels Set of 3 BM18973 3490 John Deere Verticut Reels Set of 3 BM19916 3491 John Deere Verticut Reels Set of 3 BM19916 3495 Buffalo Blower Turbine 7499 3496 Buffalo Blower Turbine 9060 STAR 11/11/2011 Turf Star & Toro Equipment Proposal for Desert Willow Turf Star and Toro would like to extend the following offer to Desert Willow on a new equipment package; Equipment would be purchased under the National IPA contract that the city has already used to purchase golf cars and walking greens mowers. We will pass on the even deeper discounts that Kemper Sports is entitled to that can be as much as a 28% discount based on the equipment category. Parts discounts are also based on category and can reflect as much as a 20% discount. Golf irrigation whole goods and accessories can be purchased up to a 50% savings. All equipment included will be 2012 models. Scheduled delivery will be January 2012. Equipment manuals, parts manuals and safety training tapes are included. Upon delivery, Turf Star will host equipment training at Desert Willow. Ron Moore Turf Star Territory Manager (760) 834-2806 !`1 Wells Fargo Financial Leasing, Inc. 800 Walnut Street Des Moines IA 50309 City of Palm Desert dba Desert Willow Golf Resort 73-510 Fred Waring Drive Palm Desert CA 92260 November 28, 2011 RE: Turf Equipment Financing, Quote Update 11/28/11 To Whom It May Concern The following is an updated pricing quote for the City of Palm Desert and it's golf operation Desert Willow Golf Resort. The information contained in the document and supporting documents does not replace all prior quotes but offers revised pricing. This information should be used in conjunction with the prior documentation presented and dated 11/9/2011. The material changes are as follows and based in -part on the following information: Total Equipment Cost — $1,519,504.76 & Secondary Purchase up to $100,000.00 Final or formal quotes for the additional equipment have yet to be received by Wells Fargo and a formal quote will be required from the individual vendors prior to any credit review or documentation. Trade Value to be applied to the Equipment Cost — $83,499.00 & $0.00 (Unknown) Amount Financed, Not Including any Applicable Taxes — $1,436,005.76 & $100,000.00 (Estimated) Applicable Property, Sales, and Use Taxes Will Require Additional Consideration to Determine Application to a Qualified Municipality, State, or Local Government; specifically the City of Palm Desert *Prior leases did not require any Property Tax to be billed by Wells Fargo, reference information can be provided* Estimated Financing Commencement Date — December 2011 or January 2012 Financing Terms for Consideration — 48 Month Municipal Lease Purchase (Monthly Payments), 60 Month Municipal Lease Purchase (Monthly Payments), 42 Month Seasonal Lease Purchase (Six Consecutive Monthly Payments per Year), 54 Month Seasonal Lease Purchase (Six Consecutive Monthly Payments per Year), 48 Month Lease Purchase Deferred Payment (No Payments for the Initial 12 Months followed by 36 Consecutive Monthly Payments), and 60 Month Lease Purchase Deferred Payment (No Payments for the Initial 12 Months followed by 48 Consecutive Monthly Payments) *Please See Attached Amortization Schedules for the defined primary package; no Amortization Schedules have been provided for the undefined Secondary Purchase. The City will be able to capture the financing Additional Terms Available upon Request* Financing Type — Fully Qualified Municipality *Subject to Approval* Offered Interest Rate — ***UPDATED, 1112812011 *** 2.43 Annual Percentage Rate on All 48 Month Terms, 2.63 Annual Percentage Rate of All 60 Month Terms (As Listed Above) *Quote is Valid through 1/31/12* Fees or Non -Interest Costs — None ALL PRICING AND TERMS SUBJECT TO CREDIT APPROVAL, OTHER TERMS AND CONDITIONS MAY APPLY Please review the attached amortization schedules based on each term listed above. The schedules are labeled to match the option and include a non -tax and taxed figure at 7.75 percent sales tax rate, if such a tax applies. Amortization schedules for the secondary purchase have not been provided as the final number has not been determined. Additional terms are available and can be offered but direction will be required from the City. As noted above; this updated pricing does not replace the prior quote or supporting documentation beyond information regarding rate. Please retain the prior quote and financing information as much of the information is unchanged relative to rate. Wells Fargo Golf & Turf sincerely appreciates the opportunity to assist with this latest acquisition and for the business the City has extended Wells Fargo previously. Please contact me with any questions or if the city requires any additional information. Wells Fargo will work with the City diligently to ensure their needs are met now and in the years to come. Sincerely Shawn Foy Wells Fargo Financial Leasing, Inc. 515/557-4133 or 866/336-8382 'Grounds maintenance equipment from Toro is now at your finger-tips. I"M lit • AP 'I TORO. Count on it. Publicly solicited and awarded national agreement offering Toro equipment, attachments and accessories SINCE 1914, Toro's heritage has been rooted in durable commercial equipment. Beginning with the first Toro machine ever built, we have been committed to creating durable and reliable equipment to help professionals do their job better and faster. Toro turf equipment continues to provide the enduring performance and quality required to establish and maintain an impeccable image. Award Highlights. The City of Tucson, AZ has publicly solicited and awarded an agreement for Parks and Golf Grounds Maintenance Equipment to The Toro Company. This cooperative purchasing agreement (Contract #083004-01) is available to public agencies and non-profit entities nationwide via National Intergovernmental Purchasing Alliance (National IPA). National IPA works with public and non profit agencies, who competitively solicit and award national contracts for aggregated use. 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Box 613189 892-898 Troy Schenectady Road DFW Airport, TX 75261 Latham, NY 12110-1698 (817) 785-1900 (518) 785-5841 REINDERS, INC. HAWTHORNE PACIFIC CORP_ P. O. Box 825 94-025 Farrington Hwy Elm Grove, WI 53122-0825 Waipahu, HI 96797-2299 (262) 786-3300 (808) 677-9111 SIMPSON NORTON CORPORATION HECTOR TURF P. O. Box 1295 1301 N.W. 3rd Street Goodyear, AZ 85338 Deerfield Beach, FL 33442 (623) 932-5116 (954)429-3200 SMITH TURF 6t IRRIGATION TERRY PATE TURF St P. O. Box 669388 IRRIGATION, INC. Charlotte, NC 28266-9388 P.O. Box 11 128 (704) 393-8873 Pensacola, FL 32524-1128 (850) 479-4653 SPARTAN DISTRIBUTORS, INC. P. O. Box 246 KENNEY MACHINERY CORP. Sparta, MI 49345-0246 8420 "Zionsville Road (616) 887-7301 Indianapolis, IN 46268-1565 (317) 872-4793 STORR TRACTOR COMPANY 3191 U.S. Hwy 22 East MIDLAND IMPLEMENT Somerville, NJ 08876-3481 COMPANY. INC, (908) 722-9830 P. O. Box 30358 Billings, MT 59107-0358 (406) 248-7771 TRI STATE COMPANIES, INC. 6125 Valley Drive Bettendorf, IA 52722-5564 (563)332-6684 TURF EQUIPMENT & IRRIGATION, INC. P. O. Box 68 Midvale, UT 84047-0068 (80I) 566-3256 TURF EQUIPMENT k SUPPLY COMPANY, INC. 8015 Dorsey Run Road Jessup, MD 20-9-1 (215) 345= 200 TURF PROFESSIONALS EQUIPMENT COMPANY 12000 Missouri Bottom Rd., Ste. 100 Hazelwood, MO 63042 (314) 895-9800 TURF STAR. INC. 2438 Radley Court Hayward, CA 94545-1159 (800) 585-8001 WESCO TURF SUPPLY, INC. 300 Technology Park Lake Mary, FL 32'•16 (407) 333-36(X) I CQ-[URF, INC. 2101 Cantu Court Sarasota, FL 34232-6242 (941)377-6777 WESTERN EQUIPMENT DISTRIBUTORS. INC. 20224 - 90th Avenue South Kent, WA 98032-1288 (253)872-8858 Or contact your local Toro Commercial distributor toll -free at: 1-800-803-8676 wwwAoro.com 2008 The Toro Company 8111 Lyndale Ave. S, Bloomington, MN 55420. 1196 All rights reserved Part No. W016-T A,. 17I fi