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THE CITY OF <br /> CDTY COUNCDL AGENDA REPORT <br /> -)LE ASANTONm <br /> February 2, 2016 <br /> Finance Department <br /> TITLE: ADOPT A RESOLUTION AUTHORIZING THE CITY MANAGER TO <br /> EXECUTE A LEASE PURCHASE AGREEMENT WITH US BANCORP <br /> FOR GOLF COURSE MAINTENANCE EQUIPMENT <br /> SUMMARY <br /> To assure that the Callippe Preserve Golf Course is operated as cost efficiently as <br /> possible, City staff, in cooperation with CourseCo, the course operator, regularly review <br /> equipment needs and replacement schedules and determine required inventory and <br /> replacement timing To manage cash flow and the integration of new equipment, <br /> equipment replacement occurs in regular phases with the last occurring in September <br /> 2011 Staff is now recommending another routine phase of equipment replacement <br /> After reviewing various acquisition options, including purchase, staff is again <br /> recommending a five (5) year lease purchase agreement to acquire required equipment <br /> as it represents the best alternative of utilizing ongoing golf course revenues to cover <br /> equipment acquisition costs <br /> RECOMMENDATION <br /> Adopt the attached resolution authorizing the City Manager to execute an Equipment <br /> Lease-Maintenance Equipment agreement with US Bancorp (Attachment 1) in the <br /> amount of$321,372 for Callippe Preserve Golf Course maintenance equipment <br /> FINANCIAL STATEMENT <br /> The quarterly lease payment for equipment acquisition will be $16,830 ($67,320 <br /> annually) at an interest rate of 1 78% Quarterly lease payments will begin in May 10, <br /> 2016 and end in February 10, 2021 Total interest paid on the $321,372 amount will be <br /> $15,227, for a total amount paid of $336,600 Callippe Preserves annual budget <br /> includes equipment lease payments that are funded from golf course revenues <br />