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THE CITY OF _ 8 CITY COUNCIL AGENDA REPORT pLEASANTON. November 3, 2015 Operations Services TITLE: AUTHORIZE THE CITY MANAGER TO EXECUTE A LEASE PURCHASE AGREEMENT WITH US BANCORP FOR GOLF COURSE MAINTENANCE EQUIPMENT SUMMARY To assure that the Callippe Preserve Golf Course is operated as cost efficiently as possible, City staff and 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 September 2011. Staff is now recommending another routine phase of equipment replacement. After reviewing various acquisition options, including purchase, staff is again recommending a five (5) year lease purchase agreement to acquire required equipment as this represents the best alternative of utilizing ongoing golf course revenues to cover equipment acquisition costs. RECOMMENDATION Authorize the City Manager to execute an Equipment Lease-Maintenance Equipment agreement with US Bancorp (Attachment 1) in the amount of $414,139 for Callippe Preserve Golf Course maintenance equipment. FINANCIAL STATEMENT The quarterly lease payment for equipment acquisition will be $21,643 ($86,574 annually) at an interest rate of 1.7%. Quarterly lease payments will begin in April 1, 2016 and end on January 1, 2021. Total interest paid on the $414,139 amount will be $18,729, for a total amount paid of $432,868. Callippe Preserves annual budget includes equipment lease payments that are funded from course revenues.