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HomeMy WebLinkAboutRes2004-044 Sponsored by: Shealy CITY OF SEWARD, ALASKA RESOLUTION 2004-44 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, AUTHORIZING THE EXECUTION OF AN EQUIPMENT LEASE/PURCHASE AGREEMENT BY AND BETWEEN THE CITY OF SEWARD AND KEY GOVERNMENT FINANCE, INC. AND PROVIDING FOR RELATED MATTERS WHEREAS, the City of Seward, Alaska (the "City") is a home rule city and under Section 11 of Article X ofthe Alaska Constitution may exercise all legislative power not prohibited by law or by the Charter ofthe City, and it has been determined that the matters set forth in this Resolution are not prohibited by law or the Charter; and WHEREAS, the City desires to enter into a capital lease financing agreement for the purchase of forty fire department self-contained breathing apparatus (the "Equipment") with Key Government Finance, Inc. (the "Lessor") and the Lessor desires to lease the Equipment to the City; and WHEREAS, the City considers that the acquisition and leasing ofthe Equipment from the Lessor is in the best interest and will promote the public purpose of the City; and WHEREAS, there has been presented to the City the form of an Equipment Lease/Purchase Agreement (the "Agreement") which the City proposes to enter into in connection with the lease of the Equipment; and WHEREAS, it appears that the Agreement which is now before the City, is in appropriate form and is an appropriate instrument for the purposes intended. NOW THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, that: Section 1. The lease by the City ofthe Equipment from the Lessor under the Agreement is hereby approved. The aggregate principal component oflease payable under the Agreement shall not exceed $117,800 and said amount shall bear interest at a rate per annum not exceeding 3.81 %. Section 2. The form and content of the Agreement are hereby, in all respects, authorized, approved and confirmed, and the City Manager, Finance Director, and City Clerk each is hereby authorized, empowered and directed to execute and deliver the Agreement to the counterparty for and on behalf of the City in substantially the form and content now before this meeting but with such changes, modifications, additions and deletions therein which shall to him seem necessary, desirable and appropriate, the execution thereofto constitute conclusive evidence of the approval CITY OF SEWARD, ALASKA RESOLUTION 2004-44 I of any and all changes, modifications, additions or deletions therein from the form and content ofthe Agreement now before this meeting, and from and after the execution and delivery of the Agreement, the City Manager, Finance Director, and the City Clerk each is hereby authorized, empowered and directed to do all such acts and things and to execute all documents as may be necessary to carry out and comply with the provisions of the Agreement as executed. Section 3. The City Manager, Finance Director, City Clerk or any other personal authorized by the City each hereby is authorized to execute and deliver for and on behalf ofthe City any and all additional certificates, documents, opinions or other papers and perform all other acts as they may deem necessary or appropriate in order to implement and carry out the intent and purposes of this Resolution. Section 4. The City covenants that it will not use any of the proceeds of the Agreement in such manner, or take or omit to take any other action in such manner, as to impair the execution of the interest component or rent payable under the Agreement from federal income taxation. The Agreement is hereby designated as a "qualified tax exempt obligation" for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986 as amended (the "Code"). The City hereby covenants that it shall not issue during the calendar year of2004 more than $l 0,000,000 in aggregate I principal amount of tax -exempt obligations other than tax -exempt obligations described in Section 265(b)(3)(C)(ii) of the Code. The City further covenants that no part of the gross proceeds of the Agreement or any other funds of the City shall at any time be used directly or indirectly to acquire securities or obligations, the acquisition of which would cause the Agreement to be or to become an "arbitrage bond" as defined in Section 148 of the Code. The City shall not permit any of the proceeds ofthe Agreement, or any products purchased with such proceeds, to be used in any manner that would cause the Agreement to constitute a "private activity bond" within the meaning of Section 141 of the Code. Section 5. The provisions ofthis Resolution are hereby declared to be separable and, if any section, phrase or provision shall for any reason be declared to be invalid, such declaration shall not affect the validity of the remainder of the sections, phrases or provisions. Section 6. Upon adoption ofthis Resolution, the Clerk ofthe City shall cause a true copy of same to be posted on the City Hall bulletin board and notice ofthe same to be published as provided in Seward City Code Section 2.15.035(D). Section 7. This Resolution shall become effective upon passage and approval in accordance with Seward City Code Section 2.l5.050(C). I CITY OF SEWARD, ALASKA RESOLUTION 2004-44 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this lih day of April, 2004. THE CITY OF SEWARD, ALASKA 'ltwLA/ ~ Vanta Shafer, M yor AYES: NOES: ABSENT: ABSTAIN: Dunham, Branson, Valdatta, Clark, Amberg, Shafer None Brossow None ATTEST: .' ! "I.. c "-'t' tA lA ) \ /t~d J~.r) Jea Lewis ;) CitY CleR\...flI j ~" I" ~...... Or SE~ "'#' ~~~" ~o~~,?;" ~.. ~ -. ':. ... : .....- () . .. .. . . - . : ~ . 5 · \ SEAL j. i .. .....-... ~ ' .. ~ ~'.,'" ...tv/,'!l' ~ ~ " ~~ 1 \tfI,,' ~.~ ..~~.....h...~' ;~.. 'I',~ /::- OF p.\.: \" · "'" " Ill'" COUNCIL AGENDA STATEMENT Meeting Date: April 12, 2004 Through: Phil Shealy, City Manager From: Kristin Erchinger, Finance Director Agenda Item: Fire Department Breathing Apparatus Equipment Financing BACKGROUND & JUSTIFICATION: The Seward City Council approved Resolution 2004-23 at its meeting of February 23, 2004, authorizing the purchase of forty self-contained breathing apparatus from Eagle Enterprises. This same resolution authorized the City administration to proceed with a Request for Proposals (RFP) to obtain lease/purchase financing. After modifying the proposed purchase to eliminate some additional accessories, the City sought proposals for $117,800 in capital lease financing. The City received six proposals from financial firms to finance the equipment purchase, one of which was considered non-responsive. The City’s RFP requested proposals for a seven year term. Based on the proposals received by the City, Key Government Finance, Inc. offered the lowest cost of financing with two semi-annual payments totaling $19,348.90, and an interest rate of 3.81%. Overall, the interest cost over the seven year term is $17,642.30. The 2004 budget included $15,000 for the annual lease payment, and since only one of the semi-annual payments will be paid in 2004 ($9,674.45), no additional appropriation is required to make the lease payment in 2004. The table below lists the proposals received: Financial Firm Total Annual Payment Interest Rate Key Government Finance, $19,348.90 3.81% Inc. Baystone Financial Group $19,581.50 4.14% Koch Financial Corporation $19,859.64 4.54% Laurel Mountain Leasing $20,141.94 4.98% Baruch and Company $21,213.84 6.50% Yes No N/A CONSISTENCY CHECKLIST: 1. Comprehensive Plan X 2. Strategic Plan X 3. Other X FISCAL NOTE: There are sufficient monies within the current operating budget to pay for the new equipment lease with no additional appropriation required. Subsequent budgets will be prepared to include $19,348.90 to cover each of the annual lease payments. Approved by Finance Department Fire Department Breathing Apparatus Capital Lease Purchase April 12, 2004 Page Two RECOMMENDATION: Council approves Resolution 2004-44, authorizing the execution of an Key Government Finance, Inc. equipment lease/purchase agreement by and between the City and and providing for related matters.