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CITY OF CORTEZ
123 ROGER SMITH AVENUE
CORTEZ, CO 81321

Creighton Wright
Director of Parks and Recreation
425 Roger Smith Ave
Cortez, CO. 81321
cwright@cortezco.gov

Memorandum

To:

CORTEZ CITY COUNCIL

From:

CREIGHTON WRIGHT, DIRECTOR OF PARKS AND RECREATION

Date:

July 23, 2024

RE:

Award a Lease Bid for a 124-inch Toro Rotary Mower for the Parks and Recreation Department

BACKGROUND

On March 22, 2023, the City Council approved a revocable order to Simpson Norton for the 124-inch Toro Rotary Mower, expecting a lease agreement to be bid and finalized before taking ownership of the mower. At the time, the production estimate was 12-18 months. The mower is available for delivery now.

The mower being replaced is a 2016 model. It had more than 4,000 hours on the engine, which recently failed, and the unit was auctioned for public sale. We are currently completing large area mowing with our backup mower.

Finance Director Kelly Koskie requested lease proposals, which were due July 18, 2024. The lease was for the previously ordered Toro 4110-D, 124-inch Rotary Mower. The total amount financed is $110,146.92, consisting of a five annual payments. The lease is for a 4-year term, with the first annual payment due at closing, plus a $1 buyout and the lowest interest rate/payment possible.

DISCUSSION

Four lease bids were received. All of the vendors provide a $1 buyout and a 4-year term. The results of the bids follow:

Parks Mower Lease Bid
Lease Vendor	Interest Rate	Rate Factor	Annual Payment
Kansas State Bank	6.690%	.274782	$30,266.37
Republic First National	5.45%	.28496	$31,387.94
Western Equipment Finance	6.650%	0	$30,501.47
Clayton Holdings, LLC (Commerce Bank)	5.20%	0	$24,317.47

Clayton Holdings, LLC (Commerce Bank) offered the lowest annual payment at $24,317.47, with an annual interest rate of 5.2%.

FISCAL IMPACT

The Equipment Fund budgeted $27,000 for the lease-purchase of the mower. The low-bid annual payment is under budget.

RECOMMENDATION

Staff recommends that the City Council award the 124-inch Toro Rotary Mower lease bid to Clayton Holdings, LLC (Commerce Bank) with five annual payments of $24,317.47 (first payment due at closing) and a 5.2% interest rate, and authorize the City Manager to negotiate and sign a lease agreement.

MOTION

If agreed upon by the City Council, a possible motion would be:

I move that the City Council award the 124-inch Toro Rotary Mower lease bid to Clayton Holdings, LLC (Commerce Bank) with five annual payments of $24,317.47 and a 5.2% interest rate, and authorize the City Manager to negotiate and sign a lease agreement.

Attachments

Mower Proposals