REPORT TO COUNCIL
SUBJECT
Title
Award of Contract for Electric Golf Car Lease for the Sunnyvale and Sunken Gardens Golf Courses (F17-054)
Report
REPORT IN BRIEF
Approval is requested to award a four-year Municipal Master Lease Agreement in the amount of $286,056 ($263,040 in leasing costs and $23,016 in sales tax) to lease eighty (80) electric golf cars from the Yamaha Golf Car Company of Newnan, Georgia, for use by the Department of Public Works Golf Division. The lease agreement will commence on March 28, 2017.
EXISTING POLICY
Pursuant to Chapter 2.08 of the Sunnyvale Municipal Code for the purchase of goods or services, Council approval is required to approve bids greater than $100,000. Pursuant to Section 2.08.070(f) of the Municipal Code, alternative methods of procurement (other than traditional competitive bidding) may be used if in the best interest of the City and the methods used are in compliance with the provisions of Chapter 2.08.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” within the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(a) as it has no potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.
BACKGROUND AND DISCUSSION
The City currently leases seventy-five Yamaha electric golf cars for patron usage at the Sunnyvale and Sunken Gardens Golf Courses. The fleet is increasing by five cars to a total of eighty cars to accommodate the aging population playing golf at the Sunken Gardens Golf Course. The additional cars will also accommodate larger tournaments The new cars will also have a tow-hitch system which will allow transport of five cars at a time to and from the car barn to the staging area.
Leasing the cars has been determined to be more cost effective than purchasing because of the heavy usage the cars receive, the vehicle life span, and minimal resale value. Historically, the City has leased the cars for a thirty-six month period. Through thorough amperage testing and factoring in players who walk the course (instead of using a car), as well as receiving better pricing for a longer term lease, it was determined that a forty-eight month lease would be cost effective for golf course needs.
Two of the primary suppliers of golf cars, Club Car and EZ-Go, participate in national cooperative contracting through US Communities Government Purchasing Alliance and National Intergovernmental Purchasing Alliance (NIPA), respectively. The current provider, Yamaha Golf Car Company, does not. Seeking to leverage volume pricing through the large purchasing cooperatives, the Purchasing Division solicited cost proposals from Club Car and EZ-Go, rather than issuing a traditional competitive bid. Pricing came in much higher than anticipated, so comparative pricing was also obtained from Yamaha. The pricing received from Yamaha at $286,056 is nearly 14% lower than EZ-Go’s pricing of $325,728 and approximately 7% lower than Club Car’s proposal of $305,850. Although an alternative bidding method was utilized in this instance, a favorable result was achieved without inhibiting competition (Club Car, EZ-Go and Yamaha are the three main suppliers of golf cars in the Bay Area).
Staff has determined that the golf cars offered by Yamaha Golf-Car Company meet City specifications, and the total lease cost is the lowest of three solicited price quotes. Service will be provided by a Yamaha Fleet Service Technician located in Livermore, California.
FISCAL IMPACT
The total cost to the City of the four-year lease period is $286,056, which includes leasing costs of $263,040 and sales tax in the amount of $23,016. Budgeted funds are available in operating program 647, Golf Course Operations. The annual amount ($71,514) over the term of the new agreement represents a slight increase of approximately $500 over the annual amount in the current agreement ($71,055).
Funding Source
Golf car services are funded by the Golf and Tennis Operations Enterprise Fund.
PUBLIC CONTACT
Public contact was made by posting the Council agenda on the City's official-notice bulletin board outside City Hall, at the Sunnyvale Senior Center, Community Center and Department of Public Safety; and by making the agenda and report available at the Sunnyvale Public Library, the Office of the City Clerk and on the City's website.
RECOMMENDATION
Recommendation
Award a four-year Municipal Master Lease Agreement, in substantially the same form as Attachment 2 of the report, in the amount of $286,056 to Yamaha Golf-Car Company for the lease of eighty electric golf cars and authorize the City Manager to execute the Lease.
Staff
Prepared by: Peter Gonda, Purchasing Officer
Reviewed by: Timothy J. Kirby, Director of Finance
Reviewed by: Manuel Pineda, Director of Public Works
Reviewed by: Walter C. Rossmann, Assistant City Manager
Approved by: Deanna J. Santana, City Manager
ATTACHMENTS
1. Cost Comparison
2. Master Lease Agreement