CITY COMMISSION AGENDA ITEM

Department:

Finance

Commission Meeting Date:  November 14, 2017

Staff Contact:

Bryan Kidney, Finance Director

Recommendations/Options/Action Requested:

Adopt Resolution No. 7228, authorizing the City of Lawrence, Kansas to enter into a lease purchase transaction, the proceeds of which will be used to pay the costs of acquiring certain equipment for use in the City; and to approve the execution of certain documents in connection therewith

Executive Summary:

The City identified equipment to finance through a lease purchase during the 2017 budget process. The governing body approved the purchase for equipment in February 2017 and August 2017:

Equipment	Department	Estimated Cost	Resolution Approval	Date Approved
Emergency Vehicle Traffic Signal Preemption System	Fire Medical	$     719,000	No. 7187	02/14/2017
Crime Scene Laser Scanner	Police	95,000	No. 7187	02/14/2017
Tandem Axle Dump Truck	Public Works	155,629	No. 7221	08/15/2017
Two Passenger Vans	Fire Medical	53,408	No. 7187	02/14/2017
Heavy Duty Utility Truck	Fire Medical	31,662	No. 7187	02/14/2017
Costs of Issuance & Misc.		29,001
Total		$1,083,700

Springsted, Incorporated managed the bid process for the lease. The request for proposals were sent on October 23, 2017 to banks with locations within the Lawrence City limits. In addition, the RFP was also posted on the City’s bid page.

The City received six (6) bids from five (5) banks on November 6, 2017.

The lowest interest cost proposal was from USBank (Option #1) for an interest rate of 2.27% and total interest cost of $133,771.34 over 10 years.  This proposal provides the option for prepayment of the lease in whole after 12 months at 103% of the remaining balance on the lease at the time of prepayment.

Strategic Goal Area:

Public Safety

Fiscal Impact (Amount/Source):

The fiscal impact to the City will be ten years of lease payments beginning in fiscal year 2018. The annual debt service of $65,483 for 2018 is included in the 2018 budget. The debt service for 2019 through 2027 averaging $128,000 per year is within the balanced financial forecast. 

Attachments:

Resolution No. 7228

Springsted, Incorporated Recommendation

Lease Amortization

Equipment Lease Purchase Agreement with USBank

Reviewed By: (for CMO use only)

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