HomeMy WebLinkAbout1998-12-08 - AGENDA REPORTS - PURCHASE COMMUTER BUSES (2)CITY OF SANTA CLARITA
AGENDA REPORT
City Manager
Item to be presents
CONSENT CALENDAR
DATE: December 8,.1998
SUBJECT: FINANCING THE PURCHASE OF SIX COMMUTER BUSES
RESOLUTION NO. 98-145
DEPARTMENT: Administrative Services
RECOMMENDED ACTION
City Council adopt Resolution No. 98-145, authorizing lease agreement, signatories
and notice of intent to be reimbursed, for an amount not to exceed $2.4 million.
Authorize the City Manager to approve all documents associated with the lease
agreement, subject to City Attorney approval.
Appropriate $270,000 from Transit Fund Balance to Account No. 4600-9020.
At the regular City Council meeting of June 23, 1998, the City Council authorized
the City Manager to execute an Assignment Agreement with LakeTran of Ohio and
to negotiate and execute a contract with Motor Coach Industries (MCI) for the
acquisition and purchase of six commuter buses.
Since that time, all contracts have been negotiated and executed. The City is
expecting delivery of the six commuter buses on or after December 22, 1998.
Staff would like to finance the purchase of the buses with a tax-exempt municipal
lease, with option to purchase. Municipal Leasing Associates,. Inc. (MLA) has
offered the City a cost-effective lease arrangement. The term of the lease is twelve
years at an annual interest rate of 4.77 percent. Under this arrangement, the City
would make annual principal and interest payments of approximately $270,000.
Transit funds would be used to make the annual payments. The City would own the
buses at the end of the term.
Several companies were contacted and subsequently bid on the lease. MLA was the
lowest bidder with a 4.77 annual percentage rate.
RESOLUTION NO. 98-145
December 8, 1998 — Page 2.
The attached Resolution approves the financing and authorizes the City Manager to
sign all documents associated with the completion of the financing.
FISCAL IMPACT
Transit funds will make all lease payments, of which 80 percent of the payment will
be made with FTA funds. There is no impact to the General Fund.
ATTACHMENT
Resolution No. 98-145
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RESOLUTION NO. 98-145
AUTHORIZING LEASE AGREEMENT,
SIGNATORIES, AND NOTICE OF INTENT
TO BE REIMBURSED
WHEREAS, City of Santa Clarita, County of Los Angeles, State of California ("City")
is duly authorized and existing under the law of said State; and,
WHEREAS, the City has entered or will enter into agreement for the acquisition of
six (6) commuter buses ("Property") all in accordance with the applicable law; and,
WHEREAS, the governing body has determined it is in the best interest of the City
and the citizens it serves to secure lease -purchase financing to provide moneys in
the approximate amount of $2,400,000 necessary to pay for the Property; and,
WHEREAS, Municipal Leasing Associates, Inc ("Corporation") has offered the City a
cost-effective lease -financing arrangement requiring periodic rental payments,
including principal plus interest computed at 4.77% annual percentage rate; and,
NOW, THEREFORE, THE. CITY COUNCIL -OF THE CITY OF SANTA CLARITA
does resolve as follows: .
Section 1: That the City Manager or a designee acting alone be • hereby
authorized in the name and on behalf of City to enter into binding agreements with
the Corporation for leasing the Property upon such terms as may seem advisable to
said officer(s), and to execute, as agents for the City, all necessary agreements
including, but not limited to, a lease/option agreement, custodial and agency
agreement, arbitrage and tax certificate, acknowledgement of assignment and
acceptance certificate. Each officer is also authorized to accept or direct delivery of
the Property. The authority given hereunder shall be deemed retroactive and any
and all acts authorized hereunder performed prior to the passage of the resolution
are hereby ratified and affirmed.
Section 2: That the City of Santa Clarita declares its official intent to be
reimbursed from the proceeds of the leaseloption agreement approved hereby for a
maximum principal amount of $2,400,000 of expenditures occurring no earlier than
sixty days prior to the adoption of this Resolution. All reimbursed expenditures will
be capital expenditures as defined in Section 1.150-1 (b) of the Federal Income Tax
Regulations.
Section 3: That this approved lease -financing be designated as a qualified tax
exempt obligation for the calendar year in which the lease is issued pursuant to
Section 265(b) of the Internal Revenue .Code of 1986 (as amended) and the
authorized officers be directed to execute the "Designation of Qualification"
document.
RESOLUTION NO. 98-145
November 23, 1998 — Page 2
PASSED, APPROVED AND ADOPTED, this 23' day of November 1998.
MAYOR
ATTEST:
CITY CLERK
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES) SS
CITY OF SANTA CLARITA )
I. Sharon L. Dawson, City Clerk of the City of Santa Clarita, do hereby certify that
the foregoing Resolution was fully adopted by the City Council of the City of Santa
Clarita at a regular meeting thereof, held on the _ day of , 1998, by
the following vote of the Council:
AYES: COUNCILMEMBERS
NOES: COUNCILMEMBERS
ABSENT: COUNCILMEMBERS
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CITY CLERK
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MAYOR
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