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frATb .CITY OF m CITY COUNCIL AGENDA REPORT August 16, 2011 Operations Services TITLE: APPROVAL OF EQUIPMENT LEASE- MAINTENANCE EQUIPMENT WITH BANK OF AMERICA FOR CALLIPPE PRESERVE GOLF COURSE EQUIPMENT SUMMARY To assure that the Callippe Preserve Golf Course is operated as cost efficiently as possible, the City staff, in cooperation with CourseCo, the course operator, regularly review equipment needs and replacement schedules and determine required inventory and replacement timing. To manage cash flow and the integration of new equipment, equipment replacement occurs in regular phases with the last occurring in December 2010. Staff is now recommending a second phase of equipment replacement. After reviewing various acquisition options, including purchase, staff is again recommending a five year lease purchase agreement to acquire required equipment as it represents the best alternative for utilizing ongoing golf course revenues to cover equipment acquisition costs. RECOMMENDATION Authorize the City Manage' to execute an Equipment Lease-Maintenance Equipment agreement with Bank of America (Attachment 1) in the amount of $298,300 for Callippe Preserve Golf Course maintenance equipment. FINANCIAL STATEMENT The quarterly lease payment for equipment acquisition will be $15,839 ($63,356 annually). Quarterly lease payments will begin in December 15, 2011 and end in September 15, 2016. Total interest paid on the $298,300 amount will be $18,472 for a total amount paid of $316,772. The City's Budget includes funding for the 2011/12FY lease payments. Payments for subsequent years will be included in future budgets funded from Callippe Preserve Golf Course revenues.