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REVISED 03-03-09
REQUEST FOR COUNCIL ACTION
ORDINANCE: O-2009-12
SUBJECT: Approving and authorizing a contract to lease/purchase 60 golf carts for use at the Homestead Golf Course.
ADDRESS: 11500 West Hampden Avenue
RECOMMENDATION: The Golf Course Operations of the Community Resources Department has identified an ongoing method of providing patrons of the golf course with quality golf carts through a capital lease. This Ordinance provides for approval of the golf cart lease and replacement of the 60 golf carts at The Homestead. Across the country, nearly 85% of golf courses are leasing their cart fleets. Additionally, this Ordinance authorizes a single source contract with E-Z-Go Corporation, a division of Textron Financial Corporation. This is the best course of action as the City has all of the tools and an inventory of repair parts to maintain two fleets of E-Z-Go golf carts, and therefore saves on switching costs.
FUNDING SOURCE: Homestead Golf Course golf cart rental fees
SUMMARY AND BACKGROUND OF SUBJECT MATTER: In 1993, Fox Hollow Golf Course elected to purchase E-Z-Go golf carts following evaluation of three golf cart manufacturers. We have been extremely satisfied with the performance and reliability of the carts as well as the service. The golf cart maintenance technician is certified by E-Z-Go to handle routine and minor repairs, and a stock of parts is kept at both golf courses. Generally, carts are replaced every four years. In 2002, E-Z-Go carts were purchased for the Homestead Golf Course as well. Due to flat golf revenues in the past few years we extended the use of carts to 6 years, however those carts now need to be replaced.
Our research into purchasing carts vs. leasing them showed that leasing carts is now a more viable option. The leasing option allows us to acquire new carts every four years and more effectively budget annual expenses. Past performance and reliability of golf carts from E-Z-Go has led us to recommend that we lease these replacement carts from E-Z-Go as a single source. E-Z-Go has also proposed a generous trade-in value for current carts.
Golf cart rental fees cover the annual lease payment and all cart related operating expenses.
The Property and Purchasing Division has reviewed the contract and financing costs, and recognizes the importance of economies of scale in having both golf courses using the same golf cart manufacturer as well as the benefits of leasing and has approved this as a sole source contract pursuant to Section 3.04.030 of the Municipal Code.
DATE OF FIRST READING: February 23, 2009
DATE OF SECOND READING: March 9, 2009
ORIGINATED BY: Bill Jewell, Regional Parks and Golf Manager
STAFF PERSON RESPONSIBLE: Bill Jewell, Regional Parks and Golf Manager
Department of Community Resources
(303) 987-7805
DOCUMENTS ATTACHED: Ordinance O-2009-12
Agreement REVISED
Fleet Golf Cart Price Sheet
SUBMITTED BY:
Kathy Hodgson, Director, Department of Community Resources
REVIEWED BY:
Joni D. Inman, Director, Mayor and City Manager’s Office
Michael J. Rock, City Manager
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