Title
Purchase of Golf Merchandise for Direct Resale to the Public (Ordinance S-45386)
Description
Request to authorize the City Manager, or his designee, to purchase various golf merchandise for direct resale to the public at pro shops located at Cave Creek, Encanto, Palo Verde and Aguila golf courses. Items may include, but are not limited to: golf balls, range balls, golf clothing, hats, golf clubs, and golf shoes. Funds generated by the sale of merchandise fully cover the costs, plus generate net revenue for golf operations. Further request authorization for the City Controller to disburse all funds related to this item. The term will be for two years with an aggregate value not to exceed $800,000, with an estimated annual expenditure of $400,000.
Report
Summary
The City operates four municipal golf courses, each of which have a pro shop where golfers check in and have the ability to purchase golf merchandise such as golf balls, clothing, and shoes. To gain the lowest price, the City purchases these items directly from various wholesale and specialty manufacturers. The City's golf course pro shops are the only direct public retail operations in the City, with merchandise purchased from more than 190 vendors.
Procurement Information
The golf merchandise needed to stock the pro shops is purchased wholesale from various wholesale and specialty manufacturers to suit customer preferences. Because customers of the pro shops demand access to a wide variety of specialty items, and because vendor pricing is based on a variety of factors and changes seasonally, a low-bid process is not suitable for the purchase of golf merchandise. The Parks and Recreation Department obtains various discounts from manufacturers on the items purchased for resale at the golf shops. The revenue from purchases made at the pro shops funds the purchase of golf merchandise.
Contract Term
The term will be from Sept. 6, 2019, through Sept. 5, 2021.
Financial Impact
Payment authority in the amount of $800,000 for a two-year period is requested. The Parks and Recreation Department will use the revenue from purchases made at the pro shops to fund the purchase of golf merchandise. Because the sales from golf merchandise cover the cost of purchasing goods, there is no impact to the budget. Over the past several years, golf merchandise revenues at City golf pro shops have averaged $400,000 annually.
Location
Golf pro shops are located at the following City-operated golf courses: Cave Creek, Encanto, Palo Verde, and Aguila.
Council Districts: 3, 4, 5 and 7
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Parks and Recreation Department.