HomeMy WebLinkAbout09. 13-06
JANUARY 8, 2013 13-06 RESOLUTION
(CARRIED___7-0____ LOST _______ LAID OVER _______ WITHDRAWN _______)
PURPOSE: AWARD BID FOR GOLF CART LEASE FOR LAKESHORE MUNICIPAL
GOLF COURSE TO YAMAHA GOLF & UTILITY ($20,275.93/ ANNUAL,
$121,655.58/TOTAL)
INITIATED BY: PURCHASING
WHEREAS, the City of Oshkosh has heretofore advertised for bids for a golf cart lease
for Lakeshore Municipal Golf Course; and
WHEREAS, upon the opening and tabulation of bids, it appears that the following is
the most advantageous bid:
YAMAHA GOLF & UTILITY
3350 West Hwy 13
Burnsville, MN 55337
Total Bid: $20,275.93/Annual, $121,655.58/6-Year Total
NOW, THEREFORE, BE IT RESOLVED by the Common Council of the City of
Oshkosh that the said bid is hereby accepted and the proper City officials are hereby
authorized and directed to enter into an appropriate agreement for the purpose of same, all
according to plans, specifications, and bid on file. Money for this purpose is hereby
appropriated from:
Acct. No. 517-0630-6432-00000 Golf Course Fund – Equipment Rental
CITY HALL
215 Church Avenue
P.O.Box 1130
Oshkosh,Wisconsin
5 903-1130 City of Oshkosh
OfHKQfH
TO: Honorable Mayor and Members of the Common Council
FROM: Jon Urben, General Services Manager
DATE: December 17, 2012
RE: Bid Award- Golf Cart Lease
BACKGROUND
The Common Council allocated $25,000 in the 2013 Lakeshore Municipal Golf Course
(LMGC) Operating Budget for golf cart lease payments. The former six year golf cart
lease expired November 1, 2012 and LMGC is now seeking vendors for another multiple-
year lease program
ANALYSIS
Working in conjunction with Parks and LMGC staff, the Purchasing Division reviewed
and prepared golf cart lease bid specifications. The bids were sent to known vendors and
posted online on NovusVendor. Bids were received on December 4, 2012. The bid tab is
attached. Purchasing, Parks and LMGC staff reviewed the bids and concluded low bid
for the six year lease received from Yamaha Golf and Utility met all the bid
specifications. Yamaha's local service agent is located in Omro. Delivery of the carts is
guaranteed before March 29, 2013.
FISCAL IMPACT
The annual fiscal impact of the six year lease is $20,275.93 for a total lease amount of
$121,655.58. The 2013 LMGC budget allocated $25,000 for the annual lease payment.
Funding for this annual lease payment would be charged to A/N #: 517-630-6432-00000
as was discussed during the 2013 budget deliberations (see attached analysis dated
11/8/2012).
RECOMMENDATION
Purchasing recommends the Common Council award this bid to Yamaha Golf and Utility
for $20,275.93 per year for the six year lease total of$121,655.58.
Respectfull Submitted, Approved:
/te..---F9461K7
Jon Urben, General Services Manager Mark Rohloff, City Manager
tot
0
W w T
Z J
g m >- >-
W N
D
0
W
U)
D
Z
CC
Q Q
D <
O W w w
>- >-
U Q d.
u
J
\\
O
0
-J
a N W
V) Zo WJJ c 0
WD � JD F- c r-
_.) 2 c O N
O- Wm WZH N cy
Q OM � a t
U = U
W
Y 0 C
• o
Ea
w
O▪ = w � a
'>
I-
LL 0a w 0
co
o �o = o o�
co
Ed U) 0 20 0 E
O m W 't }
Y a
O < U
U
W 0
Z c
Z
O aa)
CC O Q E
2 >a)
O (N_ t`
M
Z +' 13 In 5 - LO
Q = Z
O O � ° �' 2
Z 0 c N in
> N = N >
E a C o
CD N LL. EFn E
C in 0 >- M 00
Golf Cart Lease Vs.Buy Analysis
Lakeshore Municipal Golf Course
11/8/2012
End of Lease/Purchase of(34)Golf Carts on 10/31/12-Outright Purchase $25,611
Current Option to Sell 34 Carts $68,000
Estimated profit If option is exercised and carts are sold $42,389
Options for the Next Six Years:
OPTION 1:Retain the(34)golf carts and use them for 6 additional years
OPTION 2:Sell the golf carts and enter into a new lease for 6 years
Ootion 1 Prolection
Cost of Cart Purchase $25,611
Annual Lease Cost $0
Estimated Maintenance Cost Per Year
Year 1 of Ownership/Year 7 of Cart Life $12,621
Year 2 of Ownership/Year 8 of Cart Life $13,945
Year 3 of Ownership/Year 9 of Cart Life $9,319
Year 4 of Ownership/Year 10 of Cart Life $12,225
Year 5 of Ownership/Year 11 of Cart Life $15,804
Year 6 of Ownership/Year 12 of Cart Life $17,000
$80,914
Estimated Loss of Revenue from Down Time Associated with Repairs
Year 1 $442
Year 2 $975
Year 3 $1,586
Year4 $2,366
Year 5 $3,107
Year 6 $3,250
$11,726
Estimated Value of Carts after 12 years of ownership ($5,100)
ESTIMATED COST OF OPTION 1 $113,251
Option 2 Protection
Profit from sale of carts currently owned ($42,389)
Annual Lease Cost
Year 1 $20,890
Year 2 $20,890
Year 3 $20,890
Year4 $20,890
Years $20,890
Year 6 $20,890
$125,338
Estimated Annual Cost of Maintenance w/New Lease
Year 1 $125
Year 2 $125
Year 3 $440
Year 4 $520
Years $675
Year 6 $718
$2,603
Estimated Loss of Revenue from Down Time Associated with Repairs
Year 1 $130
Year 2 $130
Year 3 $195
Year4 $195
Year 5 $260
Year 6 $260
$1,170
Estimated Value of Carts at Termination of Lease ($42,389)
ESTIMATED COST OF OPTION 2 $44,333 I
Assumptions&Additional Information:
-34 carts currently in inventory will demand more maintenance and downtime in years 7-12(as estimated above)
-Overall cart inventory is currently 40,however,only 34 are currently at the end of the lease and being evaluated in this analysis
-Golf Course staff is not equipped to complete large maintenance jobs for golf carts or to spend a lot of time on maintenance-may
need additional staff or contract those services out if keeping carts that are older than 7 years
-The cost of maintenance in years 7-12 could exceed value of carts/therefore causing the need for additional purchases
during that time/staggering the age and cycles of the fleet
-Loss of Revenue is calculated on the basis of$13,per cart,per day
-Average cost of a golf cart is$4,000 if paid for with cash,and$4,500 if financed
-Average life of a golf cart is 10 years
-If a new lease is executed,the new lease company will buyout our smaller,ongoing leases(total of 6 additional carts not included
in this analysis)and combine them with the new lease
-The Golf Course is essentially in the business of renting equipment out to their customers and renters demand reliable equipment
-Revenues earned from cart rental are assumed to be the same under either method,and are not reflected in this analysis