HomeMy WebLinkAbout1/16/2002 - STAFF REPORTS (20) DATE: January 16, 2002
TO: City Council
FROM: Director of Procurement & Contracting and Director of Finance and Treasurer
APPROVE SUPPLEMENT NUMBER 7 TO CALEASE MASTER LEASE/PURCHASE
AGREEMENT FOR THE PURCHASE OF TWENTY-FIVE (25) VEHICLES FOR VARIOUS
DEPARTMENTS
RECOMMENDATION:
That the City Council approve Supplement (Takedown) Number 7 in an amount not to exceed
$620,000 underthe Master Lease Agreementwith CaLease to finance the purchase of twenty-five
vehicles scheduled for replacement in the 2001/2002 replacement cycle.
SUMMARY:
This action would provide afunding mechanism for purchase of vehicles scheduled forreplacement
in the current fiscal year by utilizing an established master contract for financing capital acquisition.
BACKGROUND:
It is recommended that the purchase of required vehicles be financed on a lease/purchase basis
over three years under the Master Lease Agreement with CaLease approved by the City Council
on October 21, 1998. The vehicle purchase is described in a separate staff report to Council. The
total cost of the vehicles is $666,479. Reducing this cost by the amount of a COLMAC grant
received for purchase of CNG-powered vehicles, the amount recommended to be financed is
$616,479.
This financing program was created as a joint powers authority of the League of California Cities
and the California State Association of Counties; it was intended to provide California cities and
counties access to the best possible financing for large capital acquisitions by leveraging tax-
exempt rates. Participation in the program allows the City to spread the acquisition cost of an asset
over the expected useful life of the asset. The vehicles will become property of the City outright at
the end of the payment terms.
CaLease's program will provide the required funding at an estimated interest rate of 4.7% which
is less than the rate of return on the City's invested funds. CaLease will finalize the rate through
placement in the competitive market within ten days after notification of approval by the City
Council. The payments are to be made quarterly, in arrears.
HAROLD E. GOOD THOMAS M. KANARR
Director of Procurement & Contracting Director of Finance and Treasurer
APPROVED:
City Manager
Attachment: (1) Minute Order
MINUTE ORDER NO.
APPROVING SUPPLEMENT (TAKEDOWN)
NUMBER 7 IN AN AMOUNT NOT TO EXCEED
$620,000 UNDER THE MASTER LEASE
AGREEMENT WITH CALEASE TO FINANCE THE
PURCHASE OF TWENTY-FIVE VEHICLES
SCHEDULED FOR REPLACEMENT IN THE
2001/2002 REPLACEMENT CYCLE
I HEREBY CERTIFY that this Minute Order approving Supplement (Takedown) Number 7 in an
amount not to exceed $620,000 under the Master Lease Agreement with CaLease to finance the
purchase of twenty-five vehicles scheduled for replacement in the 2001/2002 replacement cycle,
was approved by the City Council of the City of Palm Springs, California in a meeting thereof held
on the 16th day of January, 2002.
PATRICIA A. SANDERS
City Clerk
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