HomeMy WebLinkAbout12482RESOLUTION NO. 12482
A RESOLUTION AUTHORIZING THE EXECUTION OF AN
EQUIPMENT LEASE/PURCHASE AGREEMENT WITH
RESPECT TO THE USE, PURCHASE, 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 lease certain equipment previously acquired
under a lease purchase agreement with a cost not to exceed $1,450,254.54 constituting
personal property necessary for the Lessee to perform essential governmental functions
(the "Equipment"); and
WHEREAS, in order to use 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 refinancing 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: September 10, 2012
BY: Chris Nicoll
COUNCIL PERSON
Background Paper for Proposed
R
ESOLUTION
DATEAGENDA ITEM # M-1
September 10, 2012
:
DEPARTMENT:
FINANCE DEPARTMENT
SAM AZAD, DIRECTOR OF FINANCE
LAW DEPARTMENT
THOMAS J. FLORCZAK, CITY ATTORNEY
TITLE
A RESOLUTION AUTHORIZING THE EXECUTION OF AN EQUIPMENT
LEASE/PURCHASE AGREEMENT WITH RESPECT TO THE USE, 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 use,
purchase, financing, and leasing of equipment related to energy performance contract
measures at City buildings and facilities which would refinance the existing lease
purchase to achieve lower lease payments?
RECOMMENDATION
Approval of the Resolution.
BACKGROUND
On June 27, 2011 the City Council authorized the lease, purchase financing agreement
with All American Investment Group. This Resolution would modify and refinance the
lease purchase transaction to achieve reduced lease payments.
FINANCIAL IMPACT
The original total cost of the lease/purchase agreement with AAIG was $2,071,969
based on an annual percentage rate of 3.97%. The City will refinance the remaining
$1,769,182.80 on an annual percentage rate of 2.71% over a 14 year term beginning in
FY2013. The refinancing of this lease-purchase agreement will lower the annual
payments by an average of $10,500. 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 and the City’s credit rating would be adversely affected.