REPORT TO THE CITY COUNCIL
January 12, 2017
FROM: MICHAEL LIMA, Finance Director/City Controller
Finance Department
BY: PHILLIP L. HARDCASTLE, Principal Accountant - Debt Administration
Finance Department
SUBJECT:
Title
RESOLUTION - Authorizing the execution and delivery of a Master Equipment Lease Purchase Agreement, certain separate lease schedules, and other documents required in connection therewith in respect to the acquisition, purchase, financing and leasing of equipment for the public benefit.
Body
RECOMMENDATION(S)
Staff recommends that the Council adopt the accompanying resolution and thereby approve a Master Equipment Lease Purchase Agreement with Banc of America Public Capital Corp. This agreement is necessary to provide lease-purchase financing of City equipment.
EXECUTIVE SUMMARY
A Master Equipment Lease Purchase Agreement (MELPA) provides a ready-to-use mechanism to finance equipment purchases over time. The City's previous MELPA expired on September 30, 2011. While the City had this type of lease arrangement for several years prior to the expiration of the previous MELPA, the City's credit rating after September 2011 prevented staff's ability to find a lender willing to commit to a long-term financing agreement. With the improvement in the City's credit rating, staff issued a Request for Proposal for MELPA financing. After evaluating the responses, staff is recommending the Council approve a MELPA with Banc of America Public Capital Corp ("BAPCC"). The MELPA will be used to fund upcoming equipment purchases, which will be approved as part of current and future Adopted Budgets and other equipment purchases as approved by the City Council. Rates will be determined at the time of financing, based on a Spread that is between 0.8115% and 1.27% above an agreed upon Index (the "Average-Life Swap Rate x 65%") for the term of each individual lease.
BACKGROUND
MELPAs are a common form of financing, which the City has used over the years to lease-p...
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