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Meeting Date:	09/28/2020
off lease purchase
Submitted for:	Oscar Urdiales	Submitted By:	Oscar Urdiales
Department:	Casa Blanca Golf Course

Subject:

Discussion and possible action to approve and exercise the purchase option of existing golf course equipment under lease with Wells Fargo Financial Leasing, Inc. (Agreement Number 603-0138519-000-004) for an amount not to exceed $17,237.00 for the equipment listed below and any other matters incident thereto. [Account #7100-9050-001-483003-280 (Capital Lease Other Golf Course Equipment)]

The proposed FMv per unit is as follows:

(1) John Deere 2500BG Tee Mower	1TC250BGCFT095143	$3,964.00
(1) John Deere 2500BG Greens Mower w/accessories	1TC250BGLFT095163	$4,999.00
(1) John Deere Ztrak Z920M Zero-Turn/Mower	1TC920MCAFT030751	$1,207.00
(1) John Deere 8800 Rough Mower	1TC8800XJBT040298	$3,620.00
(1) John Deere 8700 Fiarway Mower	1TC8700XCBT040158	$3,447.00
Total Purchase Option Cost		$17,237.00

Issue: The County must decide if it wishes to exercise the FMV purchase option on the existing mowing fleet leased for the golf course - if it does not elect this option, it will be required to pay the cost of repairing the fleet to bring it to usable condition which is expected to well exceed the FMV purchase option. This is the account that never funded with the proposed leases for FY 2020 due to delays in awarding and documenting the lease of new equipment. If funds should be transferred to another account to accommodate this purchase option please advise on what account number so a line item transfer can be requested.

Solution: Purchase the equipment at FMV and either sell it or salvage/best offer and/or repair and use it for other County purpose.

Result: Authorize the purchase option at Fair market value as recommended.

Background:

Wells Fargo has deployed Austin Turf & Tractor to estimate the repair costs necessary to put the pieces equipment back into normal working order, subject to normal wear and tear. Because the Rough Mower engine is completely blown, the repair costs are expected to significantly exceed the FMV purchase value. It was apparent upon Touchstone Golf's arrival that maintenance practices on the mowing equipment portfolio were substandard - despite considerable investment of time and money there was only so much recovery of the condition possible and having to use the equipment beyond the original end of 2019 expiration only further increased the problem with the equipment life and condition.

If the County proceeds with the purchase option, the following alternatives exist for the owned equipment:
1) Sell it for salvage/best offer
2) Repair what makes sense to repair, and keep it for other County needs (the golf course will have adequate equipment)

Previous Court Action:

Fiscal Impact

Budget Account Number:	1
Funding Source:	1
Balance:	13,330.00
Financial Impact:
No impact to general fund