HomeMy WebLinkAbout98-034 - Execution of Certain Lease Financing Documents215
RESOLUTION NO. 98- 034
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA ANA AUTHORIZING AND DIRECTING
THE EXECUTION OF CERTAIN LF.~SE FINANCING
DOCUMENTS AND AUTHORIZING AND DIRECTING
CERTAIN ACTIONS WITH RESPECT THERETO
WHERF~A~, the City proposes to finance certain computer hardware, software
and consulting services (the "Project"); and
WHEREA~, the City has solicited proposals from commercial leasing firms
in connection therewith and the City has received proposals from several firms;
and
WHEREA~, the proposal of Pitney Bowes Credit Corporation (the "Lessor"),
a copy of which is attached hereto {the "Proposal"), is the best proposal,
providing the lowest cost to the City for financing the Project; and
WHEREAS, it is in the public interest and for the public benefit that the
City authorize and direct execution of a lease agreement with the Lessor and
certain other financing documents in connection therewith; and
WHEREAS, the documents below specified have been filed with the City, and
the members of the Council, with the aid of its staff, shall review said
documents;
NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF SANTA
ANA:
Hereby approves and accepts the Proposal; and
The below-enumerated documents are hereby approved, and the Mayor,
the City Manager or the Executive Director, Finance & Management
Services Agency, or the designee of any such official, is hereby
authorized and directed to execute said documents, with such
changes, insertions and omissions as may be approved by such
official, and the Clerk of the Council is hereby authorized and
directed to attest to such official's signature:
(a)
a lease agreement, by and between the Lessor, as lessor, and
the City, as lessee (the "Lease Agreement"), so long as the
basic financial terms thereof are consistent with the
Proposal; and
(b)
an escrow agreement, by and between the City and a trustee
bank to be selected, relating to the receipt, investment and
disbursement of moneys paid by the Lessor to the City under
the Lease Agreement.
216
Quint & Thimmig LLP, San Francisco, California, is hereby
designated as bond counsel to the City in connection with the
execution and delivery of the Lease Agreement. The Mayor, the City
Manager or the Executive Director, Finance & Management Services
Agency, or the designee of any such official, is hereby authorized
and directed in the name and on behalf of the City to execute an
Agreement for Legal Services with such firm.
public Financial Management, Inc., Newport Beach, California, is
hereby designated as financial advisor to the City in connection
with the execution and delivery of the Certificates. The Mayor,
the City Manager or the Executive Director, Finance & Management
Services Agency, or the designee of any such official, is hereby
authorized and directed in the name and on behalf of the City to
execute a Financial Advisory Agreement with such firm.
The Mayor, the City Manager, the Executive Director· Finance &
~nagement Services Agency, the City Attorney, the Clerk of the
Council and all other appropriate officials of the City are hereby
authorized and directed to execute such other agreements,
documents, and certificates as may be necessary to effect the
purposes of this resolution and the financing herein authorized.
6. This Resolution shall take effect upon its adoption by this
Council.
ADOPTED this 6th day of ,Tu] y
· 1998.
ATTEST:
of the Council
COUNCILMEMBERS:
Pulido
Richardson
gspinosa Aye
Franklin Aye
Lutz Ay
McGuigan
Moreno
APPROVED AS TO FORM
JoSeph W. Fletcher
City Attorney
2J. 7
RESOLUTION NO. 98-034
CERTIFICATE OF ORIGINALITY
State of California
County of Orange
I, JANICE C. GUY, Clerk of the Council, do hereby certify the attached Resolution No.
~::- O..~..t/ to be the original resolution adopted by the City Council of the City of Santa Ana
on
Clerk of the Cou~ncil F~
City of Santa Aha
219
PBCC
Pitney Bowes Credit Corporation
June 17, 1998
City of Santa Aha
20 Civic Center Plaza M-17
P,O. Box 1988
Santa Aha, CA 92702
Attention: Rod Coloma
Dear Mr. Coloma:
Pitney Bowes Credit Corporation ("PBCC") is pleased to submit the following proposal for a lease
transaction with City of Santa Aha (hereinafter referred to as "Lessee").
Pitney Bowes Credit Corporation and/or its assigns.
City of Santa Ana
Computer Hardware, Software, and Consulting Services
$3,100,000
Sixty Months
See Exhibit A
Semi-Annual in Arrears
Lessor:
Lessee:
Equipment:
Equipment Cost:
Term:
Fixed Interest Rate:
Payment Interval:
In addition to the items set forth above, this letter is predicated on the general characteristics,
assumptions and conditions set forth below:
Type of Lease:
The lease will be a triple net lease, whereby the Lessee would be
responsible for all expenses related directly or indirectly to the
transaction, including, but not limited to, maintenance, taxes (other
than taxes imposed on the net' income of the Lessor), insurance
coverage, etc. The Lessee would be responsible for certain
indemnifications including, but not limited to, indemnifications
against all hazards, liabilities, damages and risks of loss.
Opinion of Counsel:
At closing, the Lessee shall provide an opinion of counsel which will
address that the Lease is a valid and binding obligation of the City,
and that under present law interest on the Lease is not included in the
gross income of the owner therefore for federal income tax purposes
is not included as an item of tax preference in computing the federal
alternative minimum tax for certain corporations. In addition, the
opinion will state that interest under state law is exempt from income
taxation.
3020 Old Ranch Parkway Suite410 Seal Beach CA 90740-2751 562-799-0933 Fax562-493-7244
221
City of Santa Aha
June 17, 1998
Page Three
Fees-
Lessee shall pay all costs and disbursements associated with the
Escrow Facility. In addition, Lessee shall also pay the cost of
obtaining an opinion of Special Counsel.
THIS IS A NON-BINDING PROPOSAL AND IS NOT DESIGNED TO SET FORTH ALL
OF THE TERMS AND CONDITIONS OF A PROPOSED FINANCING. ACCORDINGLY,
THIS PROPOSAL IS CONDITIONED UPON AND SUBJECT TO:
(1) a. PBCC's transaction and credit approval;
b. PBCC's investment approval of the economics of the proposed transaction; an.d.
c. There being in PBCC's sole opinion no material change or prospect thereof in Lessee's
structure, ownership, financial condition or operating trends, between the date of the most
recent financial statement received by PBCC and the date of funding of the proposed
transaction.
(2) Negotiation of documentation in form and substance satisfactory in all respects to all parties to
the transaction and their respective counsel.
This letter is not a commitment to enter into this financing, nor should it be construed as an offer to
perform any undertaking. By your execution below you agree that PBCC shall not be held liable
for any action or inaction stemming from this letter. A commitment can be issued only after full
credit, legal and investment review and subsequent approval by the appropriate officers of PBCC.
Upon receipt of this executed proposal letter, we will be in a position to begin the transaction
analysis process. This letter will remain in effect until the close of business on June 29,1998.
We at Pitney Bowes Credit Corporation look forward to working with you on this transaction.
Should you have any questions or require any additional information, please do not hesitate to
contact me, toll free, at {800) 553-0171 Ext. 7220.
Sincerely,
Ron C. Hemphill
Account Executive
City of Santa Ana
Accepted By:
Printed Name
Date:
: E~HIBIT A 223
Type of Equipment:
OPTION 1
OFFICIAL BID FO.RM
LEASE PURCHASE TRANSACTION
for the
CITY OF SANTA ANA
Various Computer Equipment
Transaction Size:
Lease Term:
Average Annual Interest Rate:
All-in Interest Rate
(include all pumhasers fees)
Structure
Payment Structure
Total principal payments:
Total interest cost over term:
Pumhasers Costs
(including legal costs, if any)
Semiannual Payment Amount
$3,100,000 approximate size
5 years
4.65 % for 5 years
4.65 % for 5 years
Semiannual payments of principal and interest in arrears.
Level debt. Fund required on July 8, 1998.
$3,100,000
~ 410,067
$ 351,007
ATTACHED AMORTIZATION SCHEDULE
Proposes must identify any additional costs including legal costs associated with its bid $.
-0-
OPTION 2
Transaction Size:
Lease Term:
Average Annual Interest Rate:
All-in Interest Rate
(include purchasers fees)
$3,100,000 approximate taken down in three tranches
$1,900,000 for 5 years
4.65%
4.65%
EXHIBIT A 225
S~uctum:
Semiannual payments of principal and interest in arrears.
Level debt. $1,900,000 required on July 8, 1998.
Payment Structure
Total principal payments
$1,900,000 approximate
Total interest cost over term:
$ 251,331
Pumhasers Costs
(includinglegfl costs, ifany)
Semiannual Payment Amount
-0-
215,133
ATTACHED AMORTIZATION SCHEDULE
Proposers am also requested to complete the following table which will serve as the basis for the
indexed lease rates for the two subsequent lease schedules: $800,000 fc~[ 5 y"e~cs funded 1/99, and
$400,000 for 5 years funded 7/99.
Term
Five Year
Treasury_ Note Index~
· 83.33% of 5 year Treasury
' Percentage to the lowest Applicable Treasury security of like maturity as published in
The Wall Street Joarnal at the close of business five business days before the funding date.
Proposes must identify any additional costs including legal costs associated with its bid $ -0-
The undersigned proposer certifies that this proposal if firm for 30 days from the date of submittal'
indicated below. Subject to Pitney Bowes Credit Corporation's Investment Committee
.approval and the Exceptions to this bid set forth in our response.
Signed:
Title: t~¢coc~r) ~%~c~! ~
Date: ~-[P-~
227
Exceptions
Master Equipment Lease/Purchase Agreement
Pimey Bowes Credit Corporation (PBCC) has completed a preliminary review of the lease
agreement. The document was not received in time to allow PBCC to perform a final review.
PBCC reserves the right to provide the City with additional comments to the extent the
transaction is awarded to PBCC. Set form below are a few exceptions to the agreement.
1. PBCC will need to review the Escrow Agreement
2. Section 3 A general comment needs to be added that states "and all other documentation
required by Lessor"
3. Section 24 (a) The payment default period needs to be shortened from 30 days to 15 days.
4. Section 25 (a) (i) This provision should be deleted because it accelerates balance in the event
of a default.
5. Master Lease should include a provision that a completed and signed IRS Form 8038-G/GE
must be provided at funding.
LOAN AMORTIZATION
........ Single Loan ........
Prepared Jun-17-19~8 16:17 by ........................................ Ron Hcmphill
Template fileneme .............................................. B~e Loan 2/13/95
Template path ...................................................... c:\ivory~tem$\
Comment ...................................................... City of Santa Aaa
Average life ..................................................... 2.845 years
Average rate ................................................... 4.65000000%
Stn~ng Debt Ending
date Balance TakeDowns Service Interest Principal Balance
Jun-12-98 0,00 1,900.000.00 0.00 0.00 0.00 1,900,000.00
De¢-12-98 1,900,000,00 0.00 215,133.14 44,175.00 170,958.14
$un-12-99 1,729,041,86 0.00 215,133.14 40,200.22 174,932.91 1,554,108.95
Dec-12-99 1.554,108,95 0.00 215.133.14 36,133.03 179,000.10 1,375,108.84
Jun-12-00 1,375,108,84 0.00 215,133.14 31,971.28 183,161.86 1,191,946.99
De¢-12-00 1,191,946,99 0.00 215,133.14 27,712.77 187,420.37 1,004,526.62
Jun-12-01 1,004,526.62 0.00 215,133.14 23,355.24 191,'/77.89 812,'/48.72
Dec-12-01 812,748.72 0.00 215,133.14 18,896.41 196,236.73 616,511.99
$un-12-02 616,511.99 0.00 215,133.14 14,333.90 200,799.23 415,712.76
Dec-12-02 415,712.76 0.00 215,133.14 9,665.32 205,467.82 210,244.94
3un-12-03 210,244.94 0.00 215,133.14 4,888.19 210,244.94 0.00
TOTAL
1,900.000.00 2,151.331.35 251,331.38 1,900,000.00
229
SuperTRUMP 6.70 financial model Page 1 Ivory Consulting Corporation
LOAN AMORTIZATION
........ SIngla Loan ........
Prepaid $un-17-1998 16:lTby .................................. ~ ..... Ron Hcmphill
Template filcname .............................................. B~e Lo~ 2/13/95
Template path ...................................................... c:\ivory\tems\
Comment ...................................................... City of Santa Ann
Average life ..................................................... 2.845 yenrs
Average rate ................................................... 4.65000000%
Sta~ng Debt Ending
date Balance TakcDowns Service Interest Principal Balance
$un-12-98 0.00 3,100,000.00 0.00 0.00 0.00 3,100,000.00
De¢-12-9g 3,100,000.00 0.00 351,006.70 72,075.00 278,931.70 2,g21,06g.30
Jun-12-99 2,821,068.30 0.00 351,006.70 65,Sg9.g4 295,416.86 2,535,651.44
Deo-12-99 2,535,651.44 0.00 351,006.'/0 55,953.90 292,052.80 2,243,59g.64
Jun-12-00 2,243,598.64 0.00 351,006.70 52,163.67 298,843.03 1,944,755.61
Dec-12-00 1,944,755.61 0.00 351,006.70 45,215.57 305,791.13 1,638,964.48
Jun-12-01 1,638,964.48 0.00 351,006.70 3g, 105.92 312,900.77 1,326,063.70
Dec-12-01 1,326,063.70 0.00 351,006.70 30,g30.98 320,175.72 1,005,887.99
Jun-12-02 1,005,857.99 0.00 351,006.70 23,386.90 327,619.80 678,268.19
Dec-12-02 678,268.19 0.00 351,006.70 15,769.74 335,236.96 343,031.22
$un-12-03 343,031.22 0.00 351,006.70 7,975.48 343,031.22 0.00
TOTAL
3,100,000.00 3,510,066.98 410,066.98 3,100,000.00
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SupcrTRUMP 6.70 financial model Page 1 Ivovj Consulting Corporation