CITY COUNCIL: Resolution Entering into Lease Purchase Agreement with Rabobank for Saber PUC Pumper Fire Engine

Date: April 7, 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 Rabobank to finance the $435,982 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 for the new fire engine up to $9,323. The final invoiced cost for the engine is $435,982 (see Exhibit “A”).

The new fire engine was delivered in late March, with payment due to Pierce Manufacturing in April. To finance the cost of the new fire engine, quotes for taxexempt lease purchase financing were obtained from five companies. Of those
responding firms, Rabobank submitted the most cost-effective quote.

Based on the proposal submitted by Rabobank, the City must make seven annual
payments of $71,479.28, beginning on July 1, 2009. Total payments over the life of the lease will be $500,354.99. 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 Rabobank 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 up to $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 RABOBANK TO FINANCE THE $435,982 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 up to $9,323 for the new fire engine were approved by the City Council on December 2, 2008; and

WHEREAS, the final invoiced cost of the new fire engine is $435,982; and

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

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 Rabobank to finance the $435,982 purchase of a Saber PUC Pumper fire engine.

2. Designate City Administrator Rich Guillen as the authorized signer of the lease
purchase agreement with Rabobank.

PASSED AND ADOPTED BY THE CITY COUNCIL OF THE CITY OF CARMEL-BY-THE-SEA this 7th day of April 2009, by the following roll call vote:

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

SIGNED,

_______________________________
Heidi Burch, City Clerk


________________________
ATTEST, SUE McCLOUD, MAYOR