HomeMy WebLinkAbout12183RESOLUTION NO. 12183
A RESOLUTION AUTHORIZING THE EXECUTION AND
DELIVERY OF AN EQUIPMENT LEASE/PURCHASE
AGREEMENT WITH RESPECT TO THE ACQUISITION,
PURCHASE, FINANCING AND LEASING OF CERTAIN
EQUIPMENT FOR THE PUBLIC BENEFIT; AUTHORIZING
THE EXECUTION AND DELIVERY OF DOCUMENTS
REQUIRED IN CONNECTION THEREWITH; AND
AUTHORIZING THE TAKING OF ALL OTHER ACTION
NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION
WHEREAS, Pueblo, a Municipal Corporation (the "Lessee"), a body politic and
corporate duly organized and existing as a home rule city of the State of Colorado, is
authorized by the constitution and laws of the State of Colorado to purchase, acquire
and lease personal property for the benefit of the Lessee and its inhabitants and to
enter into contracts with respect thereto; and
WHEREAS, the Lessee desires to purchase, acquire and lease certain
equipment with a cost not to exceed $1,528,955 constituting personal property
necessary for the Lessee to perform essential governmental functions (the
"Equipment"); and
WHEREAS, in order to acquire such equipment, the Lessee proposes to enter
into that certain Equipment Lease/Purchase Agreement (the "Agreement") with Banc of
America Public Capital Corp (or one of its affiliates) (the "Lessor"), the form of which
has been presented to the governing body of the Lessee at this meeting; and
WHEREAS, the City Council, as the governing body of the Lessee, deems it for
the benefit of the Lessee and for the efficient and effective administration thereof to
enter into the Agreement and the documentation related to the financing of the
Equipment for the purchase, acquisition and leasing of the equipment to be therein
described on the terms and conditions therein provided;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF PUEBLO,
that:
SECTION 1.
The form, terms and provisions of the Agreement, a true copy of which is
attached hereto, having been approved as to form by the City Attorney, is hereby
approved in substantially the form presented at this meeting, with such insertions,
omissions and changes as shall be approved by the President of City Council and the
City Attorney, the execution of such documents being conclusive evidence of such
approval.
SECTION 2.
The President of City Council is hereby authorized and directed to execute, and
the City Clerk is hereby authorized and directed to attest, the Agreement and any
related Exhibits attached thereto and to deliver the Agreement (including such Exhibits)
to the respective parties thereto, and the City Clerk is hereby authorized to affix the seal
of the Lessee to such documents.
SECTION 3.
The City Manager, Director of Finance and other officers and employees of the
Lessee shall take all action necessary or reasonably required by the parties to the
Agreement to carry out, give effect to and consummate the transactions contemplated
thereby (including the execution and delivery of Acceptance Certificates and any tax
certificate and agreement, as contemplated in the Agreement) and to take all action
necessary in conformity therewith, including, without limitation, the execution and
delivery of any closing and other documents required to be delivered in connection with
the Agreement.
SECTION 4.
Nothing contained in this Resolution, the Agreement nor any other instrument
shall be construed with respect to the Lessee as incurring a pecuniary liability or charge
upon the general credit of the Lessee or against its taxing power, nor shall the breach of
any agreement contained in this Resolution, the Agreement or any other instrument or
document executed in connection therewith impose any pecuniary liability upon the
Lessee or any charge upon its general credit or against its taxing power, except to the
extent that the Rental Payments payable under the Agreement are special limited
obligations of the Lessee as provided in the Agreement.
SECTION 5.
The City Manager and Director of Finance of the Lessee are each hereby
designated to act as authorized representatives of the Lessee for purposes of the
Agreement until such time as the governing body of the Lessee shall designate any
other or different authorized representative for purposes of the Agreement
SECTION 6.
If any section, paragraph, clause or provision of this Resolution shall for any
reason be held to be invalid or unenforceable, the invalidity or unenforceability of such
section, paragraph, clause or provision shall not affect any of the remaining provisions
of this Resolution.
SECTION 7.
This Resolution shall become effective upon final passage and approval.
INTRODUCED June 27, 2011
BY: Larry Atencio
COUNCILPERSON
Background Paper for Proposed
RESOLUTION
DATE: AGENDA ITEM # M-1
June 27, 2011
DEPARTMENT:
Jerry M. Pacheco, Director
Planning Department
Law Department
Thomas J. Florczak, City Attorney
Sam Azad, Director
Finance Department
TITLE
A RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF AN
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH RESPECT TO THE
ACQUISITION, PURCHASE, FINANCING AND LEASING OF CERTAIN EQUIPMENT
FOR THE PUBLIC BENEFIT; AUTHORIZING THE EXECUTION AND DELIVERY OF
DOCUMENTS REQUIRED IN CONNECTION THEREWITH; AND AUTHORIZING THE
TAKING OF ALL OTHER ACTION NECESSARY TO THE CONSUMMATION OF THE
TRANSACTIONS CONTEMPLATED BY THIS RESOLUTION
ISSUE
Should the City Council approve an equipment lease/purchase agreement for the
acquisition, purchase, financing and leasing of equipment related to energy
performance contract measures at City buildings and facilities?
RECOMMENDATION
Approval of the Resolution.
BACKGROUND
On November 23, 2009, following the review of proposals from Energy Service
Companieswho were pre-qualified and registered by the State of Colorado Governor’s
Energy Office, the City entered into a contract with Johnson Controls, Inc. (JCI) to
perform a Technical Energy Audit of City buildings and facilities. A performance
contract project was developed in cooperation with JCI and the Governor’s Energy
Office that includes energy efficiency improvement measures at 37 City buildings and
facilities. On April 8, 2011 the City received three (3) proposals from financial
institutions to provide funding for the Energy Performance Contract project. A selection
committee, which was made up of Sam Azad, Naomi Hedden and Tom Florczak,
reviewed the proposals and selected All American Investment Group, LLC(AAIG) as
the company to provide lease-purchase financing for the energy efficiency lease-
purchase equipment.
FINANCIAL IMPACT
Funds in the amount not to exceed $1,528,955 will be provided through the
lease/purchase agreement to the City of Pueblo. The total cost of the lease/purchase
agreement with AAIG is $2,071,969 based on an annual percentage rate of 3.97%. The
City will pay an average of $138,131.27 per year in lease payments that will be paid
over a 15 year term beginning in FY2012. The lease payments will be paid from utility
savings in the annual operating budget of the General Fund and Enterprise Funds that
have buildings and facilities included within the project. A critical part of the financing
plan is that the energy savings are being guaranteed by JCI based on an operation
procedure developed for each building and facility. In the event the energy savings do
not provide sufficient funds in the operating budget for the annual lease-purchase
payment, and the City has complied with the operation procedures, JCI is guaranteeing
payment of any shortfall. In the event of non-appropriation of funds in any given year, it
shall not constitute a default under the lease purchase and the City will not be
responsible for payment of further lease payments under the lease/purchase
agreement. However, in such event, the equipment will be surrendered to the leasing
company.