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Synopsis of Previous Council Action:
7/20/98 Resolution 98-69 authorizing the execution of a lease purchase of 7 Triple Pumpers,
and 1 Aerial Ladder Truck.
Resolution 1999-234 authorizing the execution of a lease purchase of 3 Wildland and 1
Triple Pumper Truck.
Resolution 2001-132 authorizing the execution of a lease purchase for 4 Fire Apparatus
and Ancillary Equipment.
Resolution 2000-312 authorizing the execution of a lease purchase of 14 side loading
refu se tru cks.
Resolution 2001-98 authorizing the execution of a lease purchase of 14 side loading
refuse trucks.
Resolution 2001-100 authorizing the execution of a lease purchase of 2 roll off refuse
trucks.
Resolution 2001-150 authorizing the execution of a lease purchase of 6 front loading
refuse trucks.
Recommended Motion: Adopt Resolution
9/20/99
06/04/01
10/16/00
05/07/01
05/07/01
06/04/01
CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Barbara Pachon, Finance
Director
Subject: Resolution authorizing the
execution of a lease-purchase
agreement with Sun Trust Leasing to
refinance the existing lease-purchase
agreements with Bane One, GE Capital,
and Comerica Leasing for all
outstanding fire apparatus leases and
refuse truck leases and authorize
execution of appropriate documents.
MICC Meeting Date: July 21,2003
Dept: Finance
OR\G1NAl
Date: July 1, 2003
.~~~~if'~
Signatu e
Contact person: Barbara Pachon, Director of Finance
Phone: 5242
Supporting data attached:
Ward:
All
FUNDING REQUIREMENTS: Amount:
Source: (Acct. No.)
(Ar.r.t n~!'\r.rirtion)
Finance:
Council Notes:
Agenda Item No.
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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Staff Report
Subject:
Execution of a Lease-Purchase Agreement between the City of San Bernardino and
Sun Trust Leasing for the provision of lease-purchase financing for the Refinance of
Selected Leases in City's Lease Purchase Portfolio.
Background:
The City has approximately 15 leases, which have been entered into in the past five
years. These leases are typically for Fire Apparatus, Police Cars, and Refuse Trucks
as well as various building improvements. Debt Service on the approximately $ 11
million of outstanding balances is being repaid by the various funds which have
received the benefit of the equipment or upgrades.
Inasmuch as the interest rate environment has dramatically improved since the leases
were originally executed Finance began to inquire into the feasibility of refinancing these
leases at the request of the Budget Brainstorming Committee.
In April 2003, Purchasing issued RFQ Q03-019 to obtain rate quotations from Leasing
Companies to refinance the City's existing lease purchase agreements. Quotations
were sent out to the six financing companies with which the City currently has a council
approved master lease agreement, and a new vendor. The existing master lease
companies are: Bane One, GE Capital, Koch Financial, Comerica Leasing, Sun Trust
Leasing, and First Municipal Leasing Corporation. The new vendor was Ashford
Capital. Proposors were asked to submit rate quotes for all outstanding leases.
Refinancing proposals were received from Koch Financial, Comerica Leasing, Sun
Trust Leasing and Ashford Capital.
After a complete review of the current lease finances and the proposals received, the
Finance Department has determined that there are several leases that could be
refinanced to save the City money.
The leases that were identified were:
Refuse:
14 Side Loading Trucks - will save $5,017.25 per year and a total of $25,086.25 over
the 5 years left on the lease.
14 Side Loading Trucks, 6 Front Loaders, 2 RolI-Offs - will save $5,139.12 per year and
a total of $35,973.84 over the 7 years left on the lease.
Total Refuse savings per year is $10,156.37 and a total savings of $61,060.09 over the
life of the leases.
Fire Dept. Eauipment:
8 Pumpers, 1 Aerial Ladder; and 3 Wildland Units - will save $9,308.21 per year for the
first 4 years and $9,910.26 savings in year 5 of the 3 Wildland & 1 Pumper lease.
There will be a total savings of $47,143.10 over the 5 years left on the leases. Since
the City is reimbursed from CDBG for these lease payments, the savings will go to
CDBG.
4 Various Fire/Rescue Units - will save $8,291.11 per year and a total of $66,328.88
over the 8 years left on the lease. These items are paid from the General Fund using
the Fire AMR revenue, so the savings will go to the General Fund.
Refinancing the five leases summarized in the table below with Sun Trust will result in a
total savings to the City of $174,532.07 over the remaining life of the five leases.
INDIVIUDAL LEASE PRICING & SAVINGS ANALYSIS
SUNTRUST
PAYMENT
Pierce
3 Fire/Rescue Units $ 981,890.04 2.90% 4.71%
384,765.87 $ 379,307.66
$ 109.000.00
$ 697,266140
Annual $ 144,056.14 $ 135,765.03 $ 8,291.11
8
$ 66,328.88
14 Side Loading
Refuse Trucks, 2
Roll Offs. and 6
4 ront Loaders $1.476,729.43 2.20% 5.1498% Semi-annual $ 308.664.77 $ 303.647.52 $ 5,017.25
5
$ 25,086.25
$ 3.111.970.18
$:1;812,818'.35
$ 468.632.51 $ 463,493.39 $ 5.139.12
~1,637,858.a9 $1;600,192:34 $ aH56.69
7
$ 35.973.84
ii;$:l7:4:53~7'
The payment schedule for each lease is essentially the same as the original lease
schedule, and each of the leases will be paid off by the original due dates. The
equipment purchased by the original lease financing continues to stand as the collateral
for the refinancing.
There were several leases that did not make financial sense to be refinanced. Leases
that were within 18 months of payoff, such as: the Print Shop Equipment, Refuse
Sweepers and Roll-Off Trucks, and the existing Police Vehicle leases; were not
included. The cost to refinance these leases that are in the final year did not produce
any financial savings. Leases for building improvements, such as: ENVEST, Energy
Improvements, HVAC and Chillers; were, also, not included. These leases could not be
refinanced because of the unique nature of the financing through the Edison efficiency
program and the nature of the collateral.
Financial Impact:
There is no cost to the City to execute a Lease Purchase Agreement with Sun Trust
Leasing.
This action will result in savings of $ 10,156.37 in the Refuse Fund for FY 03-04 and
total savings of $61 ,060.09 over the remaining 5 to 7 year life of the leases.
The action also will result in savings of $9,308.34 per year for the first four years and
$9,910.26 savings for year five to COSG funds, with total savings of $47,143.10 over
the 5 years remaining on the leases.
Finally, this action will also result in a savings of $ 8,291.11 for FY 03/04 in the General
Fund with a total savings of $ 66,328.88 over the remaining 8 years of the lease.
Recommendation:
Adopt resolution.
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RESOLU~JQ [9y
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AUTHORIZING A LEASE-PURCHASE AGREEMENT
WITH SUN TRUST LEASING TO REFINANCE THE EXISTING LEASE-PURCHASE
AGREEMENTS WITH BANC ONE, GE CAPITAL, AND COMERICA LEASING FOR
ALL OUTSTANDING FIRE APP ARA TUS LEASES AND REFUSE TRUCK LEASES.
WHEREAS the City of San Bernardino has approximately 15 leases which have been
entered into in the past five (5) years.
WHEREAS the interest rate environment has dramatically improved since these leases
were originally executed.
WHEREAS refinancing of these leases will reduce the City's debt service obligations.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION I. That the City of San Bernardino has existing lease-purchase agreements
. 14 with Bane One, GE Capital, and Comerica Leasing for fire apparatus, and refuse trucks. That
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the City issued Rate Quote Q 03-019 for Refinancing of the City's Existing Lease Purchase
Portfolio. Entering into a refinancing of these leases will reduce the City's Debt service for the
remaining term of the leases.
SECTION 2. That Sun Trust Leasing, pursuant to their response to Q 03-019, be
awarded a refinance of the leases for all outstanding Fire Apparatus Leases, and leases for 28
Side Loading, 2 Roll Off and 6 Front Loader Refuse Trucks.
SECTION 3. That the Mayor and Common Council authorize the Purchasing Manager
to enter into a lease purchase agreement with Sun Trust Leasing, pursuant to the master lease
agreement with Sun Trust, Resolution 2002-148, for the administration of transactions to
refinance all outstanding Fire Apparatus leases, and leases for 28 Side Loading, 2 Roll Off and
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27 6 Front Loader Refuse Trucks.
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SECTION 4. The authorization to execute the above referenced is rescinded if it is not
Y1D. 19
7/Z1103
issued within sixty (60) days of the passage of this resolution.
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AUTHORIZING A LEASE-PURCHASE AGREEMENT
WITH SUN TRUST LEASING TO REFINANCE THE EXISTING LEASE-PURCHASE
AGREEMENTS WITH BANC ONE, GE CAPITAL, AND COMERlCA LEASING FOR
ALL OUTSTANDING FIRE APPARATUS LEASES AND REFUSE TRUCK LEASES.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor
and Common Council of the City of San Bernardino at a
meeting thereof, held
on the
day of
,2003, by the following vote, to wit:
Council Members:
AYES
NAYS
ABSTAIN ABSENT
ESTRADA
LONGVILLE
MC GINNIS
. 14 DERRY
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SUAREZ
ANDERSON
MC CAMMACK
Rachel G. Clark, City Clerk
day of
The foregoing resolution is hereby approved this
2003.
Judith Valles, Mayor
City of San Bernardino
25 Approved as to
Form and legal content:
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27 JAMES F. PENMAN,
City Attorney
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By: L 7 .?~~
/)
** FOR OFFICE USE ONLY - NOT A PUBLIC DOCUMENT **
RESOLUTION AGENDA ITEM TRACKING FORM
Meeting Date (Date Adopted): f] - 21- C!:') Item #
Vote: Ayes! -, Nays .-EJ
Change to motion to amend original documents:
I "\ Resolution#L (':Ie 2, - Zoc
Abstain .~) Absent .8
Reso. # On Attachments: - Contract term:
Note on Resolution of Attachment stored separately: ~
Direct City Clerk to (circle I): PUBLISH, POST, RECORD W/COUNTY
Date Sent to Mayor:
f)- Z ~ CZ
Date of Mayor's Signature: C) )'\- (:r'>
Date ofClerkJCDC Signature: ..). J Ao' C,:.,
Date Melllv/LdlGI-Seftt...fg;-Slgn~tllre:
See Attached:
---~ttached:
See Attached:
60 Day Reminder Letter Sent on 30th day:
90 Day Reminder Letter Sent on 45th day:
Request for Council Action & Staff Report Attached:
Updated Prior Resolutions (Other Than Below):
Updated CITY Personnel Folders (6413, 6429, 6433,10584,10585,12634):
Updated CDC Personnel Folders (5557):
Updated Traffic Folders (3985, 8234, 655, 92-389):
Copies Distributed to:
City Attorney ,,/
Parks & Rec.
Code Compliance Dev. Services
Police Public Services Water
Notes:
NullNoidAfter: ice Ui")S! '1-IO)-C3
By: -
ResD. Log Updated:
Seal Impressed:
~/
...--
.-
Date Returned: -
Yes ./ No BYL
No ./' ,
Yes B /
Y~
Yes No ./ By~
Yes No ----""- By,
Yes No / ByT
EDA
Finance ~
MIS
Others:
BEFORE FILING, REVIEW FORM TO ENSURE ANY NOTATIONS MADE HERE ARE TRANSFERRED TO THE
YEARLY RESOLUTION CHRONOLOGICAL LOG FOR FUTURE REFERENCE (Contract Term. etc.l
Ready to File: _
Date:
Revised 01112/01