CITY COUNCIL: Resolution Entering into Lease Purchase Agreement to Finance Saber PUC Pumper Fire Engine

Date: March 3, 2009
Prepared by: Joyce Giuffre,
Admin Services Director

City Council
Agenda Item Summary

Name: Consideration of a Resolution entering into a lease purchase agreement with California First National Bank to finance the $436,968 purchase of a Saber PUC Pumper fire engine.

Description: On August 5, 2008, the City Council approved Resolution 2008-54 for a contract with Pierce Manufacturing to design and manufacture a Saber PUC Pumper fire engine in the amount of $427,645. Four months later, on December 2, 2008, the City Council approved change orders totaling $9,323 for the new fire engine. The change orders brought the total cost of the new fire engine to $436,968.

The new fire engine is expected to be completed later this month, with payment due to Pierce Manufacturing beginning in April. To finance the cost of the new fire engine, quotes for tax-exempt lease purchase financing were obtained from five companies. Of those responding firms, California First National Bank (CalFirst), a wholly owned subsidiary of California First National Bancorp, submitted the most cost-effective quote. Based on the proposal submitted by CalFirst, the City must make seven annual payments of $71,862.90, beginning on July 15, 2009. Total payments over the life of the lease will be $503,040.30. At the end of the lease term, the equipment may be purchased for $1.00.

City Attorney Don Freeman has reviewed this lease purchase agreement.

Staff Recommendation: Approve entering into a lease purchase agreement with California First National Bank to finance the purchase of a Saber PUC Pumper fire engine.

Important Considerations: The Triennial Budget for FY 2008/09 through 2010/11, adopted by City Council last year, includes lease payments for the new fire engine in the amount of $78,000 starting in FY 2009/10.

Decision Record: Resolution 2008-54 (August 5, 2008), approving a $427,645 contract with Pierce Manufacturing for a Saber PUC Pumper fire engine; Resolution 2008-84 (December 2, 2008) approving change orders for the new fire engine in the amount of $9,323.

Reviewed by:

______________________________ _________________
Rich Guillen, City Administrator Date


CITY COUNCIL
CITY OF CARMEL-BY-THE-SEA
RESOLUTION 2009–
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA ENTERING INTO A LEASE PURCHASE AGREEMENT WITH CALIFORNIA FIRST NATIONAL BANK TO FINANCE THE $436,968 PURCHASE OF A SABER PUC PUMPER FIRE ENGINE

WHEREAS, on August 5, 2008, the City Council approved a contract with Pierce Manufacturing in the amount of $427,645 to design and manufacture a Saber PUC Pumper fire engine; and

WHEREAS, change orders for the new fire engine totaling $9,323 were approved by the City Council on December 2, 2008, bringing the total cost to $436,968; and

WHEREAS, City staff compared quotes from five leasing companies for the best source of tax-exempt lease purchase financing; and

WHEREAS, the best source is California First National Bank, through its Government and Education Group Division.

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA DOES:

1. Approve entering into a lease purchase agreement with California First National Bank to finance the $436,968 purchase of a Saber PUC Pumper fire engine.

2. Designate City Administrator Rich Guillen as the authorized signer of the lease purchase agreement with California First National Bank.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF
CARMEL-BY-THE-SEA this 3rd day of March 2009, by the following roll call vote:

AYES: COUNCIL MEMBERS:
NOES: COUNCIL MEMBERS:
ABSENT: COUNCIL MEMBERS:

SIGNED,

________________________
SUE McCLOUD, MAYOR

ATTEST:

_______________________________
Heidi Burch, City Clerk