Title
A RESOLUTION AUTHORIZING THE CITY MANAGER TO TERMINATE A CURRENT AGREEMENT AND TO ENTER INTO A NEW AGREEMENT WITH PNC EQUIPMENT FINANCE, LLC FOR LEASING OF NEW GOLF CARTS FOR THE ELLSWORTH MEADOWS GOLF COURSE; AND DECLARING AN EMERGENCY.
Executive Summary: This Resolution will provide authorization for the City Manager to terminate an existing 7-year agreement with PNC Equipment Finance, LLC and enter into a new 5-year agreement with PNC Equipment Finance for leasing of a new 70-cart fleet for Ellsworth Meadows Golf Club.
Body
Legislative History
Resolution No. 13-141, authorizing a 7-year lease agreement with PNC Equipment Financing, LLC for the 2014-2020 golf seasons.
Resolution No. 13-142, authorizing a 7-year agreement with Lake Erie Golf Cars for supply, maintenance, and repair of golf carts.
Purpose & Explanation
In 2013 the Golf Advisory Board suggested that when negotiating the next golf cart fleet, that we ask for a 7-year term versus a 5-year term. This strategy was to try and reduce our annual expenses by stretching out the lease. In 2013, a new agreement was reached with a 7-year term (reducing our annual expense by $8,190.00) a savings of $57,330.00 over 7 years. This new lease also contained a clause that required Lake Erie Golf Cars to supply the Ellsworth golf cart fleet with new batteries after year 3, knowing that the original batteries would never make it to year 7.
The golf course fleet is now at the timing of having the cart batteries replaced per the lease agreement. We have been recently approached by Lake Erie Golf Cars to change the current lease agreement. They have voiced that they would not like to replace the batteries now, because of the high cost factor to them to do so. They have proposed to supply Ellsworth Meadows with an entire new fleet of 70 golf carts, for a new 5-year lease (at the same price as the extended 7-year lease rate). This option would be of value to the golf course for three reasons: 1.) we receive a new fleet of cars on 3-1/2 year-old carts that are already showing wear and tear; 2.) we will remain at the 7-year extended rate for a 5-year lease (continuing the $8190.00 savings moving forward); and 3.) we will eliminate the risk of keeping the current fleet for the entire 7 years that we knew was a risk by agreeing to the extended 7-year lease. By keeping the existing fleet, the full 7 years, the overall condition of the fleet would be in poor shape both in appearance and operationally. Lake Erie Golf Cars has stated that they will not offer a 7-year lease again moving forward.
Lake Erie Golf Cars is the only distributor, and is therefore a sole source vendor, of the EZGO TXT48 electric golf cart, which has been a reliable model for Ellsworth Meadows Golf Club, and staff prefers to continue with this same model going forward. Golf staff has also contacted the only other golf cart vendor in northeast Ohio (Southeast Golf Cars), and they are substantially higher in price than Lake Erie Golf Cars, and they do not offer the EZGO TXT48 electric golf cart. The current 7- year agreements with Lake Erie Golf Cars and PNC Equipment Finance will need to be terminated and the City will need to enter new 5-year agreements with Lake Erie Golf Cars and PNC Equipment Finance.
Timing Considerations
This fleet of golf carts is needed for the 2017 golfing season; therefore, staff requests emergency language be added to the legislation.
Fiscal Impact
X__Currently Budgeted
Supplemental Appropriation Required
Appropriation Not Required.
Recommendation
Suggested Action
Staff recommends City Council authorize the City Manager to terminate an existing 7- year agreement with PNC Equipment Finance and to enter into a new 5-year agreement with PNC Equipment Finance LLC, 995 Dalton Avenue, Cincinnati OH 45203, at an annual cost of $57,750.00.
By separate related Resolution, staff also recommends that City Council authorize the City Manager to terminate an existing supply / maintenance / repair agreement with Lake Erie Golf Cars and to enter into a new 5-year agreement with Lake Erie Golf Cars, 26565 Miles Rd., Warrensville Heights, Ohio, the cost of which will be included in the lease agreement through PNC Equipment Finance LLC.
Submitted by,
Jane Howington, City Manager
Frank J. Comeriato, Jr., Assistant City Manager - Operations
Trent Wash, Assistant Public Works Director