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Resolution authorizing the execution of an Assumption of Liability and Guaranty Agreement by and among the City of Coral Gables ("City"), the Biltmore Hotel Golf Management, LLC ("Manager") and the Biltmore Hotel Limited Partnership ("Biltmore"); authorizing a "piggyback" lease agreement for golf carts under Section 2-978 of the Procurement Code attached as Exhibit "A" to the Assumption of Liability and Guarantee Agreement; further appropriating funds from the Biltmore Fund to pay the cost of golf carts under the lease agreement.
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In order to replace the current lease on golf carts for City golf courses including the Biltmore Golf Course expiring November 10, 2010, the Parks and Recreation Department and the Procurement Division of Finance obtained a "piggyback" lease agreement through the National Intergovernmental Purchasing Association (National IPA). This National IPA lease agreement is based on a competitive solicitation by the City of Tucson, Arizona and a subsequent amendment to allow for leasing using the original bid price amortized over a 4 year lease term. Section 2-978 of the Procurement Code authorizes the use of other governmental unit contracts, otherwise known as "piggyback" contracts for the purchase of supplies and services, which have resulted from a formal competitive bid process.
The National IPA lease agreement commenced on December 22, 2008 for an initial one (1) year term with an option to renew for four (4) additional years with the contract terminating on December 22, 2013. However, the "piggyback" lease term for the City of Coral Gables begins at the effective date of the "piggyback" and is not based on the remaining time allowed on the original Tucson agreement. The interest rate on a four (4) year lease through this "piggyback" is fixed at 4.69%. The monthly lease payment under the "piggyback" is $61.37 per golf cart, which is 2.5% lower than what the City currently pays monthly at $62.91 under its present lease agreement.
There would be two (2) "piggyback" lease agreements with Club Car, with one lease for the golf carts at the Granada Golf Course and the second lease agreement for the golf carts at the Biltmore Hotel. The four (4) year lease agreement for the Granada Golf Course will provide for the leasing of forty (40) golf carts at a total cost of $161,830.40, while the lease agreement for the Biltmore Golf Course will provide for the leasing of ninety six (96) golf carts at a total cost $388,392.96. The cumulative savings on the lease of the Biltmore Golf Course golf carts by the using the "piggyback" lease arrangement for the four (4) year term is $42,531.84.
While the lease of the golf carts for the Biltmore Golf Course is signed by the City, as lessee, and, thus, is the financial responsibility of the City to pay the rent due thereunder, the City has obtained an "Assumption of Liability and Guaranty Agreement" from the Manager of the Biltmore Golf Course (The Biltmore Hotel Golf Management, LLC) and from the operator of the Biltmore Hotels (Biltmore Hotel Limited Partnership, "Biltmore") to assume and pay the rent due under the Golf Cart Lease. The Manager is obligated to remit the rent payment to the City at least five (5) business days prior to the date specified for payment under the Golf Cart Lease. The Biltmore guarantees the performance by the Manager of this financial obligation. Should a default by Manager occur under the Assumption of Liability and Guaranty Agreement, then such default shall be deemed a default under the Management Agreement between the City and Manager and under the Biltmore Hotel Lease with the Biltmore. The Assumption of Liability and Guaranty Agreement does not relieve this City from the financial obligations under the Golf Cart Lease. However, the Manager has made all payments required under the prior golf cart lease without any contractual obligation to do so and the golf carts are a necessary part of the operation of the Biltmore Golf Course irrespective of who is operating it.