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CITY OF SAN BERNARDINO
REQUEST FOR COUNCIL ACTION
From:
BARBARA PACHON,
DIRECTOR OF FINANCE
Subject:
Lease/purchase of 29
patrol vehicles.
Dept:
FINANCE
ORIGINAL
Date:
April 23, 1997
Synopsis of Previous Council action:
4/21/97 - Approval of Resolution No. 97-107 awarding a cooperative purchase order to
Robert H. Loud Ford for furnishing and delivery of twenty-nine (29) each 1997 Ford Crown
Victorias to be utilized by the Police Department.
Recommended motion:
That the Mayor and Common Council receive and file the attached staff report.
~~ ~&~
~ Signature
Contact person: Barbara pachon. Director of Finance
Phone:
x - 5242
Supporting data attached: Staff reuort. Resolution 97-107
Ward:
FUNDING REQUIREMENTS:
Amount:
n/a
Source: (Acct. No.)
(Acct. DescriDtionl
Finance:
Council Notes:
;( "ft/l. Met!
Reo 9 7-/07
Agenda Item No.
3/S/Q1
,ri
.
STAFF REPORT
BACKGROUND
On April 21, 1997, the Mayor and Common Council approved Supplemental Agenda Item S4,
authorizing a cooperative lease/purchase with the County for 29 patrol vehicles. Because
concern was expressed that the City was obligating unappropriated funds of future budget years,
it was suggested that staff prepare a budget amendment for this purchase.
RECOMMENDATION
Because lease payments will not be made from the current year's budget, a budget amendment
to appropriate funds is not necessary. Lease payments will begin next fiscal year. It is common
for public agencies to enter into lease agreements that span over more than one budget year;
contracts involving public agencies address this situation with an "appropriation" clause. The
clause states that in the event the Council does not appropriate funding to cover the lease
payments in any given fiscal year, the lease/purchase agreement terminates. All of the City's
Master Lease agreements contain this clause.
It is important to note that although the City's Master Lease agreements contain an
"appropriation" clause, vendors entering into lease/purchase agreements with public agencies
expect good faith efforts in honoring contracts. If the City were to back out of this
lease/purchase agreement due to non-appropriation of funds by the Council, the City would be
required to surrender the vehicles to the leasing agent. Additionally, failure to honor a contract
may be detrimental to the City's credit rating and could affect future financing opportunities.
Reviewed By:
,
Huston T. Carlyle
Sr. Assistant City