Agenda Packets - 2003/05/05 - Laserfiche WebLink

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Item No. 3 Type of Business: WS Meeting Date: May 5, 2003 City of Mounds View Staff Report To: Honorable Mayor and City Council From: Mary Burg, Golf Course Manager Subject: Golf Car Lease vs. Purchase Background The Bridges has the need for additional golf cars to meet rental demand. Historically the City has leased additional golf cars for the busy months of the season. Discussion The Bridges Golf Course presently owns ten rental golf cars. In previous golf seasons, it has been required to lease additional cars to accommodate the demand. The revenue generated from the rental of golf cars has been approximately $30,000; or an average of $18 per car, per day. The Bridges Golf Course has leased four addition cars from Midwest Golf Car, Inc. on a seasonal basis for 4.5 months. The rates are based on the length of the lease. The monthly lease fee decreases as the length of the lease is extended. Additional saving is available by the extension of the agreement to multiple years. Lease fees are attached as Exhibit A. The Bridges Golf Course rental car fleet is several years old and a long-term replacement plan should be considered. The average length of service for a golf car is considered 8 years for an 18-hole course. The City of Mounds View will be establishing a fleet plan in the next budget cycle. Information regarding continued lease verses the estimates for car replacement is included in this report. The estimated purchase price for a golf car is $3500. A plan is available with financing at 4.5% over five years. Payments are deferred six months of each year. Minimums of five cars are required to receive this plan. Information for the consideration of the purchase of new carts opposed to continuing to lease is attached as Exhibit B. A minimum three-year lease is advised should the City Council determine to continue a lease program. The golf course will realize two additional months per year at a lower annual cost than the golf course has historically paid for a four-month lease. Obviously any additional rentals during the addition month would be 100% extra revenue.