REPORT TO THE CITY COUNCIL
April 6, 2017
FROM: MICHAEL LIMA, Finance Director/City Controller
Finance Department
BY: PHILLIP L. HARDCASTLE, Principal Accountant - Debt Administration
Finance Department
SUBJECT:
Title
Approve an Escrow Agreement with BOK Financial to be used in conjunction with a Master Equipment Lease Purchase Agreement with Banc of America Public Capital Corp.
Body
RECOMMENDATION(S)
Staff recommends that the Council approve an Escrow Agreement to be used in conjunction with a Master Equipment Lease Purchase Agreement (Agreement) with Banc of America Public Capital Corp. (Bank). This Escrow Agreement with BOK Financial (BOK) is necessary to escrow lease proceeds on equipment purchases having payments to multiple vendors and/or having multiple items being paid at various dates.
EXECUTIVE SUMMARY
On January 12, 2017, the City Council approved a new Agreement with Bank to finance equipment acquisitions for terms up to 10 years. In conjunction with approving the Agreement, Council also approved a form of Escrow Agreement that was shown in the Agreement as Exhibit B. Subsequent to that approval, due to regulations that were stricter than when the previous Agreement was active, no escrow agent was willing to accept the approved form of Escrow Agreement. BOK was selected to provide escrow services because they were willing to accept the form of Escrow Agreement with minor modifications.
BACKGROUND
On January 12, 2017, the City Council approved a new Agreement with Bank to finance equipment acquisitions for periods between 3 and 10 years. The City has used Agreements over the years to lease-purchase fire apparatus, police vehicles (including helicopters), telecommunications, computers, building improvements, and software licenses. The Agreement does not approve the purchase or the financing of any equipment. It simply provides a mechanism to fund equipment that has already been approved for purchase and financing by the City Council.
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