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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
From: Barbara Pachon, Director
Subject: Authorization to lease-purchase
four (4) water-cooled air conditioners,
contingency funds, and contingency /
temporary cooling equipment (project
previously approved by Council) through
Koch Financial Corporation under existing
Master Lease Agreement with the City.
Dept: Finance
Date: July 29,2008
MICC Meeting Date: August 4, 2008
Synopsis of Previous Council Action:
Resolution 2008-25 1/22/2008
Resolution of the Mayor and Common Council of the City of San Bernardino authorizing the City Manager
to execute an agreement for energy conservation measures with Western Allied Refrigeration Inc., for
HV AC units at the Central Police Station.
Recommended Motion:
Adopt Resolution
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Contact Person: Barbara Pachon
Supporting data attached:
Phone: 5242
Ward: I
FUNDING REQUIREMENTS:
Amount: FY 2008-09 $106,000
Account: 631-331-5803
Finance:
Council Notes:
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Agenda Item No. /9
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CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTION
Starr Report
SUBJECT
Authorization to lease-purchase four (4) water-cooled air conditioners, contingency funds, and
contingency / temporary cooling equipment (project previously approved by Council) through
Koch Financial Corporation under existing Master Lease Agreement with the City.
BACKGROUND
At the January 22nd, 2008 Council Meeting, the Mayor and Common Council approved a
resolution authorizing the City Manager to execute an agreement for energy conservation
measures with Western Allied Corporation for HV AC units at the Central Police Station.
The City has pre-approved "Master Lease Agreements" in place with a number of financing
institutions. When lease-purchase financing is necessary, Finance obtains rate quotes from these
pre-approved providers. The Finance Department issued a request for rate quote (LQ 09-02) to
the four (4) finance / leasing companies that have a Master Lease Agreement in place with the
City. LQ 09-02 requested a lease-purchase rate quote and amortization schedule for $902,000
and eleven (11) year financing with semi-annual payment for the HV AC project. LQ 09-02 was
sent to four (4) companies. Four responses were receive and are summarized below.
Lease-Purchase Providers
Koch Financial Corporation
SunTrust Leasing Corporation
First Municipal Leasing Corporation
Comerica Leasing Corporation
Rate
4.68%
4.84%
4.84%
No Bid
Semi-Annual Pavment
$52,303.98
$52,772.53
$52,974.79
No Bid
Comerica Leasing Corporation responded to LQ 09-02. However, Comerica chose not to submit
a rate quote because they do not normally bid on transactions that exceed 10 years in terms nor
provide financing for equipment that is affixed to real estate for terms exceeding 5 years.
FINANCIAL IMPACT
$106,000 was included in the FY 2008-09 Preliminary Utility Fund Budget in anticipation of this
lease, account # 631-331-5803. There is no net cost to the City for this project. Anticipated
energy savings of approximately $110,000 a year will offset the annual lease payment. The loan
was structured over a period of eleven years so that the amount of the annual debt service
payment would be equivalent to estimated energy savings annually. When the loan is paid in
full, the City will no longer have a debt service payment, but will have the continuing energy
savings of approximately $100,000 annually.
RECOMMENDATION
Adopt Resolution.
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AWARDING A BID FOR LEASE PURCHASE FINANCING
TO KOCH FINANCIAL CORPORATION FOR THE PURCHASE OF FOUR (4)
WATER-COOLED AIR CONDITIONERS, CONTINGENCY FUNDS AND
CONTINGENCY I TEMPORARY COOLING EQUIPMENT
WHEREAS, the Mayor and Common Council at the January 22nd, 2008 Council
Meeting approved Resolution 2008-25 authorizing the City Manger to execute an agreement in
the amount of $902,000 (including project contingencies) for energy conservation measures
with Westem Allied Corporation for HV AC units at the Central Police Station.
NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON
COUNCIL OF THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. That-Koch Financial Corporation has a current Master Lease Agreement
with the City of San Bernardino and provided the lowest lease purchase rate quote for the lease
purchase of four (4) water cooled air conditioners, contingency funds and contingency I
temporary cooling equipment. Pursuant to this determination the Director of Finance is hereby
authorized to execute lease purchase documents with Koch Financial Corporation.
SECTION 2. The authorization to execute the above-mentioned actions is rescinded if
not completed within sixty (60) of the passage of this resolution.
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RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO AWARDING A BID FOR LEASE PURCHASE FINANCING
TO KOCH FINANCIAL CORPORATION FOR THE PURCHASE OF FOUR (4)
WATER-COOLED AIR CONDITIONERS, CONTINGENCY FUNDS AND
CONTINGENCY I TEMPORARY COOLING EQUIPMENT
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
, 2008, by the following vote, to wit:
AYES
NAYS
ABSTAIN ABSENT
Council Members:
ESTRADA
BAXTER
BRINKER
DERRY
KELLEY
JOHNSON
MCCAMMACK
Rachel G. Clark, City Clerk
The foregoing resolution is hereby approved this
day of
2008.
Patrick J. Morris, Mayor
City of San Bernardino
Approved as to Form:
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