HomeMy WebLinkAboutAgenda - 04-05-2016 - 6-j - Resolution Regarding a Purchase Agreement between Orange County Schools and Chase Equipment Finance to Provide Computers for Teachers and Students 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: April 5, 2016
Action Agenda
Item No. 6-j
SUBJECT: Resolution Regarding a Purchase Agreement between Orange County Schools
and Chase Equipment Finance to Provide Computers for Teachers and
Students
DEPARTMENT: Financial and Administrative
Services
ATTACHMENT(S): INFORMATION CONTACT:
Resolution Gary Donaldson, Finance and
Administrative Services, 919-245-
2453
Bonnie Hammersley, County Manager,
919-245-2300
Todd Wirt, OCS Superintendent, 919-
732-8126
Todd Jones, Chief Technology Officer
919-732-8126
PURPOSE: To adopt a resolution approving a purchase agreement between Orange County
Schools (OCS) and Chase Equipment Finance for the purchase of computers for teachers and
students to upgrade the District's digital technology.
BACKGROUND: As part of Orange County Schools (District) need to utilize current technology
to educate the students of its school district, the Orange County Board of Education approved
on March 7, 2016 the purchase of 6,600 Dell Chromebooks for grades 3-12 students, 1,000
Apple iPads for K-2"d grade students, 700 Dell Latitude laptops for K-12 teachers, and
associated accessories and management systems. This purchase will allow the District to
replace the devices purchased for the original classroom computer project, now completing its
fourth year.
The computers currently utilized in grades 6 through 12 were purchased in bulk in 2012, with
the elementary grades following shortly thereafter. According to Orange County Schools
technology staff, the devices have been heavily used by students and are at the end of their
effective usefulness and expected lifespan. The district is also changing computing platforms
for the student computers, thereby making a staggered replacement problematic as it would
leave some students with devices well beyond their expected service life and potentially
creating inequities in computing platform throughout the District.
The total cost of the purchase of the computers is $2,280,316. Orange County Schools
received financing proposals from BB&T, Winthrop Resources, Dell, and Chase Equipment
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Finance. The lowest interest rate received for the proposed financing was from Chase
Equipment Finance, which is a division of JP Morgan Chase Bank. The proposed rate for the
principal loan amount of $2,194,084 is 1.56% with a term of 4 years, with interest of $86,232,
for a total amount of$2,280,316
The Chase Equipment Finance agreement represents an annual payment of $570,079. The
Orange County Schools Board of Education approved the financing of the project with Chase
Equipment Finance at its March 21, 2016 Board Meeting. Orange County Schools will dedicate
proceeds from the one-quarter cent sales tax to pay the annual payment.
The State of North Carolina requires that the County and Local Government Commission (LGC)
approve the financing arrangement if the term is 5 years or more. This agreement will not
require LGC approval.
FINANCIAL IMPACT: The financial impact to the County is approximately $2,280,316 and is
included in Orange County Schools Capital Investment Plan.
SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal Impact associated
with this item.
RECOMMENDATION(S): The Manager recommends that the Board adopt the resolution
approving the agreement and authorize the Chair to sign the resolution regarding the
agreement between Orange County Schools and Chase Equipment Finance.
RES-2016-028 3
RESOLUTION
ORANGE COUNTY BOARD OF COMMISSIONERS
ORANGE COUNTY, NORTH CAROLINA
WHEREAS, the Orange County Board of Education ("Board of Education") wishes
to enter into an installment purchase contract under N.C. Gen. Stat. § 115C-528 with
Chase Equipment Finance for the purchase of certain laptop computers and related
equipment to be used for instructional purposes; and
WHEREAS, the installment purchase contract will require the Board of Education to
pay Chase Equipment Finance a total of up to $ 2,280,316 , inclusive of principal and
interest, over the course of the next four fiscal years, in four annual payments, made in
arrears, in accordance with the attached Payment Schedule.
WHEREAS, the installment purchase contract is a continuing contract for capital
outlay subject to the provisions of N.C. Gen. Stat. § 115C-441(c1) and 115C-528; and
WHEREAS, although the Board of Education and Orange County Board of
Commissioners ("Board of Commissioners") anticipate that the entire cost of the contract
with Chase Equipment Finance will be covered by the normal capital outlay appropriations
provided by the Board of Commissioners each year, the contract is nevertheless being
approved by resolution of the Board of Commissioners in order to comply with the
requirements of N.0 Gen. Stat. § 115C-441(c1).
NOW, THEREFORE, BE IT HEREBY RESOLVED, as required by N.C. Gen. Stat.
§ 115C-441(c1), that the Orange County Board of Commissioners agrees to appropriate
sufficient funds to the Orange County Board of Education in ensuing fiscal years to meet
the Chase Equipment Finance contract obligations, so long as the amount the Orange
County Board of Education shall be obligated to pay under that contract shall not exceed
the amounts recited above and in the attached Payment Schedule. Said funds shall be a
part of, and not in addition to, regular appropriations made to the Orange County Board of
Education.
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Resolved, this 5th day of April, 2016 by the Orange County Board of
Commissioners.
Chair
Attachment: Payment Schedule
R0802492
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Loan Amortization
date funding payment interest principal balance
4/15/2016 $2,194,084.00 $2,194,084.00
4/15/2017 $ 570,078.88 $34,227.71 $ 535,851.17 $1,658,232.83
4/15/2018 $ 570,078.88 $25,868.43 $ 544,210.45 $1,114,022.38
4/15/2019 $ 570,078.88 $17,378.75 $ 552,700.13 $ 561,322.25
4/15/2020 $ 570,078.88 $ 8,756.63 $ 561,322.25 $ 0.00
$2,194,084.00 $2,280,315.52 $86,231.52 $2,194,084.00
J P.Morgan