BANC OF AMERICA LEASING & CAPITAL LLC - EQUIP LEASE AGMT 2005

® i THE CITY of 12 CITY COUNCIL AGENDA REPORT PL£t\SANTUNe December 7, 2010 Operations Services Department TITLE: AUTHORIZE THE CITY MANAGER TO EXECUTE AN EQUIPMENT LEASE— MAINTENANCE EQUIPMENT WITH BANK OF AMERICA TO FUND THE ACQUISITION OF CALLIPPE PRESERVE GOLF COURSE MAINTENANCE EQUIPMENT SUMMARY In 2005, the City entered into a five year lease purchase agreement with Bank of America for the purchase of maintenance equipment (lawn mowers, rollers, aerators, seeders, etc) for the Callippe Preserve Golf Course. While this five year lease agreement expired in May 2010, CourseCo, the City's contract golf course operator, has continued utilizing the equipment purchased through the lease to meet golf course maintenance needs. However, because the equipment is at the end of its useful life, it needs to be replaced. As a result, staff consulted with CourseCo to identify appropriate replacement equipment (i.e., manufacturer, models and required pieces of equipment) and to determine the most cost effective way to acquire the new equipment. Based on that review, staff is again recommending a lease purchase arrangement to acquire the required replacement equipment as it provides the best alternative for utilizing ongoing golf course revenues to cover equipment acquisition costs. Based on a competitive bid process, staff is recommending entering into a five year equipment lease with Bank of America to acquire $352,900 of golf course maintenance equipment in 2011. Additional equipment leases may also be used in 2012 and 2013 for anticipated future equipment purchases. RECOMMENDATION Authorize the City Manager to execute an Equipment Lease-Maintenance Equipment agreement with Bank of America (Attachment 1) to purchase $352,900 of golf course maintenance equipment in FY 2010/11 for the Callippe Preserve Golf Course. FINANCIAL STATEMENT The quarterly lease payment for equipment acquisition will be $18,748.87 ($74,995.48 annually). Quarterly lease payments will begin in April 2011 and end in January 2016. Total interest paid on the$352,900 amount will be $22,077.40 for a total amount paid of $374,977.40. The City's Budget includes funding for the FY2010/11 lease payments. Payments for subsequent years will be included in future budgets funded from Callippe Preserve Golf Course revenues.