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Home My WebLink About99-045 - Execution of Certain Lease Financing Documents289 RESOLUTION NO. 1999-045 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA/LNA AUTHORIZING AND DIRECTING THE EXECUTION OF CERTAIN LEASE FIN/LNCING DOCUMENTS AND AUTHORIZING AND DIRECTING CERTAIN ACTIONS WITH RESPECT THERETO WHEREAS, the City proposes to finance certain computer hardware, software and other related services (the "Project"); and WHEREAS, the City has solicited proposals from commercial leasing firms in connection therewith and the City has received proposals from several firms; and WHEREAS, 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: 1 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 City Attorney, 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, if required, 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. 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. 290 PMG Financial Consulting, Orange, California, is hereby designated as financial advisor 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 a Financial Advisory Agreement with such firm. The Mayor, the City Manager, the Executive Director, Finance & Management 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. This Resolution shall take effect upon its adoption by this Council. ADOPTED this ~ day of ATTEST: ~C. Guy '~ (/Clerk of the Counci~ / COUNCILMEMBERS: , 1999. ' . Pulido Absent Lutz Absent Bist Ay~ Christy Aye Franklin Aye McGuigan ~,,~ Moreno X~ APPROVED AS TO FORM: ~.Joseph W. Fletcher City Attorney CERTIFICATE OF ORIGINALITY State of California County of Orange I, JAN[CE C. GUY, Clerk of the Council, do hereby certify the attached Resolution No. /9'q 9' -' o qr-.,.h'-to be the original resolution adopted by the City Council of the City of Santa Aha on ~/>' / rote: / ¢ ¢ - / ' ' / // ] Clerk6fth'eCo/m~ ~' City of Santa PBCC Pitney Bowes Credit Corporation July 09, 1999 Mr. Roderick R. Coloma CPA Executive Director City Treasurer City of Santa Aha 20 Civic Center Plaza (M17) PO Box 1988 Santa )ma, CA 92702 Dear Rod: Pitney Bowes Credit Corporation ("PBCC") is pleased to submit the following proposal for a lease transaction with City of Santa Ana (hereinafter referred to as "Lessee"). Lessor: Pitney Bowes Credit Corporation and/or its assigns. Lessee: City of Santa Ana Equipment: Computer and Tele-Commurdcations Project Equipment Cost: $2,738,670 Delivery and Acceptance: Prior to August 6, 1999 Term: Five Years Interest Rate: 4.76% This rate will be fixed thru August 6, 1999. However to the extent the five year treasury decreases below its current rate of 5.67%, the interest rate will be decreased by 50% of the treasury movement. The interest rate will not be increased if the five year treasury increases prior to the opening of escrow. Payment Interval: Semi-Annual in Arrears Purchase Option: One Dollar 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 indenmifications including, but not limited to, indemnifications against all hazards, liabilities, damages and risks of loss. 3020 Old Ranch Parkway Suite 410 Seal Beach CA90740-2751 562-799-0933 Fax 562-493-7244 292 City of Santa Ana Page Two July 9, 1999 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. Fees: Should PBCC approve the transaction, Lessee shall pay all costs and disbursements incurred by PBCC in connection therewith, including, without limitation, ail fees and disbursements of outside counsel to PBCC, UCC filing and lien search fees, and the cost of obtaining a tax opinion. Escrow: It is anticipated that the funds will be deposited into an escrow prior to August 6, 1999. The Lessee will have the option to set up a separate account within the City to avoid paying a third party to escrow the funds. 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; and Co 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 foma 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 alter 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 July 15, 1999. City of Santa Ana Page Three July 9, 1999 293 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 or direct at (562) 493-7220. Sincerely, Ron C. Hemphill Account Executive City °f Santa A.~j Accepte~~ PfintedName: ROD R. COLOM~ EXEUUTIVJS DI R.~(gTOb[ Title: FINANCE & MANAGEMENT SERVICES AGENCY Date: AUGUST 2, 1999 294- AbIORTIZATION SCHEDULE --~ Aggregate Of Lending Loans .... pr~psz~d Iul-09.199,~ ,:12 by ................... : .................... Ron Hcmphill Template filenamc ............................................. Base Loan 2/13/95 Template path ..................................................... Comment ..................................................... City o fSanta Ann Aggregate average life ................................................ 2.g47¥ear$ Rate ............................................................. 4.76000{J00% Starting Debt Remaining date Balance TakeDown$ Service Interest Principal Balance Jui-08-99 0.00 2,738,670.00 0.00 0.00 0.00 2.738,670.00 3an-08-O0 2,738,670.00 0.00 310,979.84 65,180.35 245,799.49 2,492,870.51 gul-08-O0 2,492,870.51 0.00 310,979.84 59,330.32 251.649.52 2,241,220.99 gan-08-01 2,241,220.99 0.00 310,979.84 53,341.06 257,638.78 1,983,582.21 3ul-08-Ol 1,983,582.21 0.00 310,979.84 47,209.26 263,770.58 1,719,811.63 $an-08-02 1,719,811.63 0.00 310,979.84 40,931.52 270,048.32 1,449,763.31 $u1-08-02 1,449,763.31 0.00 310,979.84 34,504.37 276,475.47 1,173,287.84 Jan-O8-03 1,173,287.84 0.00 310,979.84 27,924.25 283,055.59 890,282.25 ,1u1-08-03 890,232.25 0.00 310,979.84 21,187.53 289,792.31 600,439.94 Jan-08-04 600,439.94 0.00 310,979.84 14,290.47 2~6,~'~9.37 303,750.57 Jul-08-04 303,750.57 0.00 310,979.84 7,229.26 303,750.57 0.00 TOTAL 2,738,670.00 3.109,798.38 371,128.38 2,738,670.00 SuperTRUMP 7.03 financial model Page l Ivory Consulting Corporation