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June 25,2002 <br /> <br />Recommendation: <br /> <br />· Adoption of a resolution authorizing the lease financing of fire apparatus in an <br />amount not to exceed $1,800,000. <br /> <br />Purpose and Need: <br /> <br />· In 1996, the Department of Fire, Rescue and Emergency Services implemented a <br />long-term replacement plan for fire apparatus. The plan anticipated purchasing <br />approximately five pieces of major fire apparatus (ladders and pumpers) through a <br />lease financing every five years. The first lease financing was fully paid in 2001. <br /> <br />· In order to implement the second phase of the replacement plan, the Interim Fire <br />Chief is requesting to replace one ladder and three pumpers for an approximate cost of <br />$1.8 million. <br /> <br />· On December 8, 2002, the City entered into an $8,800,000 Equipment Lease <br />Purchase Agreement (the "Financing Lease") with Banc of America Leasing and <br />Capital, LLC (the "Lessor"). The Lessor is willing to amend this Financing Lease to <br />include the financing of the fire apparatus. <br /> <br />· Given the relatively small dollar value of the fire apparatus purchase, the City has <br />determined that it is advantageous to negotiate an amendment to the 2002 Lease <br />Financing provided terms acceptable to the City can be negotiated. <br /> <br />· The approval of this accompanying resolution will delegate authority to the City <br />Manager and the Chief Financial Officer to negotiate the amendment to the Lease <br />Financing and allows for the issuance of purchase orders for the fire apparatus. <br /> <br />Financial Impact: <br /> <br />· The financing was anticipated in the FY 2003 budget and an adequate amount has <br />been appropriated to meet the debt service requirements; therefore, no additional <br />impact is expected. <br /> <br /> Motion by Mr. Robinett, and seconded by Mr. Moody, to adopt the following <br />resolution, and was adopted by the following vote: <br /> <br />"A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PORTSMOUTH, <br />VIRGINIA AUTHORIZING THE LEASE FINANCING OF CERTAIN FIRE APPARATUS <br />IN THE MAXIMUM PRINCIPAL AMOUNT OF $1,800,000. <br /> <br /> WHEREAS, the Council of the City of Portsmouth, Virginia ("City") has <br />determined that it is necessary and advisable to acquire certain fire apparatus <br />("Apparatus") for the City as part of a fifteen-year replacement plan for fire apparatus <br />and to obtain financing for the Apparatus through a financing lease providing financing <br />for the Apparatus in the maximum principal amount of $1,800,000 ("Lease"); and <br /> <br /> WHEREAS, the City entered into a $8,800,000 Equipment Lease Purchase <br />Agreement (the "Financing Lease") with Banc of America Leasing and Capital, LLC (the <br />"Lessor") on December 8, 2002; and <br /> <br /> WHEREAS, the Lessor is willing to amend this Financing Lease to include the <br />financing of the Apparatus. <br /> <br /> NOW, THEREFORE, BE IT RESOLVED by the Council of the City of <br />Portsmouth, Virginia: <br /> <br /> 1. Terms of Financing. The City Manager and the City's Chief Financial <br />Officer, or either of them, is authorized and directed to negotiate an amendment to the <br />Lease (the "Amendment") with the Lessor that such officers, or either of them, <br />determine to be in the best interest of the City, provided that the maximum principal <br />amount of the financing shall not exceed $1,800,000, the interest rate used to calculate <br />the interest component of rental payments under the Lease shall not exceed 8% and <br />the term of the Amendment to the Lease shall not be longer than five years. <br /> <br /> <br />