HomeMy WebLinkAboutItem No. 09 Negotiate and Execute Purchase Orders Acquiring BoatsCity Council Agenda Report
City of Lake Elsinore 130 South Main Street
Lake Elsinore, CA 92530
www.lake-elsinore.org
File Number: ID# 19-091
Agenda Date: 4/9/2019 Status: PassedVersion: 1
File Type: Council Consent
Calendar
In Control: City Council / Successor Agency
Agenda Number: 9)
Authorize the City Manager to Negotiate and Execute Purchase Orders Acquiring Boats
Authorize the City Manager to execute purchase orders of up to five (5) fishing boats in the amount not
to exceed $65,000.00 and up to six (6) pontoon boats for recreation and fishing rentals at the Boat
Launch in the amount not to exceed $260,000.
Page 1 City of Lake Elsinore Printed on 5/9/2023
REPORT TO CITY COUNCIL
To:Honorable Mayor and Members of the City Council
From:Grant Yates, City Manager
Prepared by:Jason Simpson, Assistant City Manager
Date:April 9, 2019
Subject:Authorize the City Manager to Negotiate and Execute Purchase Orders
Acquiring Boats
Recommendation
Approve and authorize the City Manager to execute purchase orders of up to four/five (4/5)
fishing boats in the amount not to exceed $65,000.00 and up to six (6) pontoon boats for
recreation and fishing rentals at the Boat Launch in the amount not to exceed $260,000.
Background
Staff has researched several boat rental opportunities to capitalize on unique camping and
marketing experiences and incorporating these experiences into the construction of the RV
Resort Rehabilitation Project. For example, a boat rental for a typical day could be $100 per
hour and up to $650 per day for the rental of a boat at the boat launch. There is a market for
this type of recreational opportunity and the reservation of boat rentals is a popular and hot
camping amenity for the recreational vehicle and camping world. Industry professionals have
confirmed the demand for boat rentals in a not so rugged setting can be a park amenity while
simultaneously creating a site as a destination.
The two pontoon boats purchased in June 2017 paid for themselves within 12 months during
the time when the campground was closed. Staff is receiving calls regarding boat rentals on a
consistent basis and a large demand in anticipation of the Fishing Derby in May at Launch
Pointe.
Discussion
Through boat manufacturers and local dealers in Riverside County there are several, new but
older year boats they are offering significant deep discounts off MSRP. This is a niche market
and by offering a unique pontoon or boat rentals and tours on Lake Elsinore, so visitors can
enjoy the lake and surrounding views at their own pace while cruising along the water, sun
bathing, and fishing. The anticipated price for each boat (model years between 2017 to current)
will range between $12,700 and $38,000. It is in the City’s best interest to purchase these boats
from a local dealers and suppliers with proven reliability. Therefore, it is requested that the City
Purchase Orders –Acquiring Boats
April 9, 2019
Page 2
Council find that it is not in the City’s best interest to go out to bidand authorize the City
Manager execute purchase ordersfor pontoon as well as fishing boats.
In anticipation of these purchases staff will attempt to get multiple prices on compatible boat
rental vessels but in some cases multiple pricing may not be available. The timing of these
purchases will take place as soon as possible and the utilizationand camp rental of the boats
will be available by May 3, 2019 Fishing Derby. In the end, the RV Resort will have several
rental boats that will be centrally located at the South end of the park near the lake. It is
anticipatedtheseboat rentals will bevery popular and in high demand. It can be anticipated that
additional units may be needed to stratify the demand and optimize the revenue opportunities of
the boat launch facility. Once this is fully realized, staff shall return to Council for additional
authorization and subsequent purchases.
Fiscal Impact
Staff estimates that the purchase cost will be recovered through daily rental fees of up to $500
to $650 ($75to $200 per hour)with a return on investment withinthe firstyear. The projections
are based upon 35% of capacity annualized, while staff believes the revenue stream will be
higher, the following table illustrates a conservative estimate.
Purchase Orders –Acquiring Boats
April 9, 2019
Page 3
PONTOON BOATS
ANNUAL
RENTAL
CAPITAL
COST
NET - YEAR
1
1- Pontoon (Existing)98,000$ 30,000$ 68,000$
2 - Pontoon (Existing)98,000 30,000 68,000
3- Economy Pontoon 1 98,000 35,000 63,000
4- Economy Pontoon 2 98,000 35,000 63,000
5- Economy Pontoon 3 98,000 35,000 63,000
6- Economy Pontoon 4 98,000 35,000 63,000
7- Economy Pontoon 5 98,000 35,000 63,000
8- Economy Pontoon 6 98,000 30,000 68,000
SUBTOTALS 784,000$265,000$ 519,000$
FISHING BOATS
1 - 16' boat 44,000$ 16,250$ 27,750$
2 - 16' boat 44,000 16,250 27,750
3 - 16' boat 44,000 16,250 27,750
4 - 16' boat 44,000 16,250 27,750
SUBTOTALS 176,000$65,000$ 111,000$
960,000$330,000$ 630,000$
Less: Staffing 177,191$
Insurance 50,000
Fuel 28,000
Maintenance 36,000
291,191$
Net Projected 338,809$
ANNUAL ESTIMATE