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Home My WebLink AboutAgenda - 06-07-2005-5jORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: .tune 7, 2005 Action Agenda Item No. _ ~~~_ SUBJECT: Resolution Authorizing Installment Financing Contract for Equipment Purchases DEPARTMENT: Finance PUBLIC HEARING: (Y/N) No ATTACHMENT(S): Resolution Amortization Schedule INFORMATION CONTACT: Ken Chavious, ext 2450 TELEPHONE NUMBERS: Hillsborough 732-8181 Chapel Hill 968-4501 Durham 688-7331 Mebane 336-227-2031 PURPOSE: To consider adopting a resolution required by SunTrust Bank to facilitate the financing of equipment already purchased by the County's Solid Waste Department and equipment to be purchased by the County's Public Works Department, BACKGROUND: At meetings on April 19, 2005 and May 3, 2005, the Board approved the purchase of Public Works vehicles including a Front Loader Refuse Truck ($164,726) and a Tandem Axle Dump Truck ($92,964), These two items were a part of the major equipment purchases proposed by staff and approved by the Board on March 15, 2005, In addition, the Board is being asked in other action at this .June 7 meeting to award a bid for the purchase of thirteen 20-yard containers for the solid waste convienience centers, at a cost of $43,485, Acquisition of these containers was also approved by the Board on March 15, 2005. Exact pricing was not available at that time, Therefore, these items were not included in the most recent equipment financing proposal that was approved by the Board on April 12, 2005. At meetings on December 6 and December 14 2004, the Board authorized staff to purchase equipment for the Solid Waste Department. Approved equipment included a Crawler Dozer for the construction and demolition (C&D) landfill ($274,700) and a Hook Lift Truck for the Recycling Program ($111,632). Board action also authorized staff to pursue financing for the purchase of these two equipment items. Financing agreements for this equipment were not immediately pursued pending the other proposed equipment purchases mentioned above. With the passage of time, the Solid Waste items were inadvertently omitted from the financing proposal approved on April 12, 2005. Both of the pieces of equipment were acquired and paid for in full with funds available in the Solid Waste Enterprise Fund. Staff propose to seek the intended financing for that equipment retroactively. SunTrust is willing to loan those funds, with the proceeds of the Solid Waste portion of the loan being returned to the Landfill Enterprise Fund to reimburse it for the cash equipment purchases that were made. The future debt service on this portion of the SunTrust loan would be paid over 59 months from the Landfill Enterprise Fund, z The total cost of all equipment involved in these acquisitions is $687,507.. The County has $21,896 remaining from a prior financing arrangement that will be used toward purchase of the proposed equipment in this transaction. That leaves a total of $665,611 to be financed. The Finance Director obtained financing proposals from three institutions for financing that amount fora 59 month period. SunTrust bank offered the lowest interest rate of 3.22%. In order to accomplish the financing, the bank requires that the County adopt an official resolution authorizing the execution and delivery of the installment financing contracts and other documents, The resolution necessary to complete the financing has been reviewed by County staff and the County Attorney and is attached, including copies of the proposed amortization schedule, FINANCIAL IMPACT: As mentioned above, the total amount to be financed under the transaction with SunTrust is $665,611. At an interest rate of 3.22%, the amount paid annually would be $160,109. That amount is included in the County Manager's recommended budget for 2005-2006, with approximately $72,049 in General Fund debt service and $88,060 in Landfill Enterprise Fund debt service. RECOMMENDATION(S): The Manager recommends that the Board adopt the resolution and authorize the Finance Director and County Attorney to execute documents as required to accomplish the financing with SunTrust Bank. [Escrow] RF.SOT,IJTiON OF GOVF.RNiNG BODY Agreement Number: Equipment Schedtde: At a duty called meeting of the governing body of Lessee held in accordance with all applicable legal requirements, including open meeting laws, on dte _ day of ,the following resolution was introduced and adopted: RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER LEASE AGREEMENT, EQUIPMENT SCHEDULE NO. Ol, AN ESCROW AGREEMENT, AND RELATED INSTRUMENTS, AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH. WHEREAS, the governing body of (LESSEES ("Lessee") desires to obtain certain equipment (the "Equipment") described in Equipment Schedule No. OI to the Master Lease Agreement (collectively, the "L,ease") with SunTrust Leasing Corporation, the form of which has been available for review by the governing body of Lessee prior to this meeting; and WHEREAS, the Equipment is essential for the Lessee to perform its governmental functions; and WHEREAS, the funds made available under the Lease will be deposited with Crestat Bank (the "Escrow Agent") pursuant to an Escrow Agreement between Lessee and ffie Escrow Agent (the "Escrow Agreement") and will be applied to the acquisition of the Equipment in accordance with said Escrow Agreement; and WHEREAS, Lessee has taken dte necessary steps, including those relating to any applicable legal bidding requirements, to arrange for the acquisition of the Equipment; and WHEREAS, Lessee proposes to enter into the Lease with SunTrnst Leasing Corpomtion and the Escrow Agreement with the Escrow Agent substantially in the forms presented to this meeting, NOW, THEREFORE, BE IT RESOLVED BY THE GOVERNING BODY OF LESSEE AS FOLLOWS: Section t , It is hereby found and determined that the terms of the Lease and the Escrow Agreement (collectively, the "Financing Documents") in the forms presented to this meeting and incorporated in this resolution are in the best interests of Lessee for the acquisition of the Equipment. SecKnn 7. The Financing Documents and dte acquisition and financing of the Equipment under the terms and conditions as described in the Financing Documents are hereby approved. The of Lessee and any other officer of Lessee who shall have power to execute contracts on behalf of Lessee be, and each of them hereby is, authorized to execute, acknowledge and deliver the Financing Documents with any changes, insertions and omissions therein as may be approved by the officers who execute the Financing Documents, such approval to be conclusively evidenced by such execution and delivery of the Financing Documents.. The of the Lessee and any other officer of Lessee who shall have power to do so be, and each of them hereby is, authorized to affix the official seal of Lessee to the Financing Documents and attest the same, Section ~. The proper officers of Lessee be, and each of them hereby is, authorized and directed to execute and deliver any and all papers, instruments, opinions, certificates, affidavits and outer documents and to do or cause to be done any and all other acts and things necessary or proper for carrying out this resolution and die Financing Documents, NOTE: INSERT THE FOLLOWING PARAGRAPH FOR BANK QUALIFIED TRANSACTIONS. ~Secfinn ~. Pursuant to Section 265(b) of the Internal Revenue Code of 1986, as amended (the "Code"), Lessee hereby specifically designates the Lease as a "qualified tax-exempt obligation" for proposes of Section 265(b)(3) of the Code,] U The undersigned fi~rdrer certifies that the above reso]ution has not been repealed or amended and remains in full force and effect and further certifies that the Lease and L^scrow Agreement executed on behalf of Lessee are the same as presented at such meeting of the governing body of L essee, excepting only such changes, insertions and omissions as shall have been approved by the officers who executed the same.. Date: , _ ~LESSEE~, Lessee Name: Tide: (Signatue of Secretary, Board Chairman or other member of the Governing Body) Attested By: (Signature of one additional person who can witness thhe passage of this Resolution) Name: Title: U); Ln/LUUn 13:4L rRA 41UJUfnnnY lUllllnSt-Lea~lJig a!JUVJ UV.) SUBJECT T0, AND MADE A PART OF, THAT CERTAIN PROPOSAL DATED MAY 10, 2005 Preparod By: SunTrustLeasing Corporation Lessee: Orange County, NG Interest Rate: 3.22% Term: Approximately Five (5) Years Payment Number Date Pa ment Princiaal Interest Balance 1 12110!05 80,054.61 69,307.93 10,746.68 596,303.07 2 06!10!06 60,054.61 70,426.95 9,627 66 525,876.12 3 12110/06 80,054.61 71,564.03 8,49058 454,312.09 4 OB/1DI07 80,054.61 72,719,48 7,335.13 381,592,61 5 12/10107 80,054,61 73,893.57 8,161 A4 307,699,03 6 06/1DI06 8D,054.61 75,066.63 4,987.98 232,612,40 7 1211DlDB 80,D54.61 76,298,95 3,755.66 156,313.46 8 08110ID9 80,054..61 77,530.84 2,523 77 76,782.62 9 1211D/09 80,054.61 78,782.62 1,271.99 0 - Totals ---------- - 720,491.49 ----------- - 665,611.00 ----------- 54,880.49 SUBJECT TO, AND MADE A PART OF, THAT CERTAIN PROPOSAL DATED MAY 10, 2005