HomeMy WebLinkAboutOrdinance 4484 ORDINANCE NO.4484
AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF
A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT HAVING A
NOMINAL PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000 FOR
THE PURPOSE OF FINANCING THE COST OF ACQUIRING CERTAIN
SOLID WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND
PRESCRIBING OTHER MATTERS RELATING THERETO
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a mechanism to finance the costs of acquisition of
certain solid waste vehicles, carts and related equipment to benefit the residents of the City (the
"Improvements"); and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the
Constitution of the State of Arkansas ("Amendment 65") and the Local Government Capital
Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated ( 1998 Repl .)
Sections 14- 164-401 et seq. (as from time to time amended, the "Act"), to enter into certain
short-term lease/purchase arrangements to finance the costs of various capital improvements
such as those comprising the Improvements, which lease obligations shall constitute special
obligations of the City under Amendment 65 and the Act; and
WHEREAS, the City has made arrangements for the entry into a Master Equipment
Lease/Purchase Agreement (the "Lease/Purchase Agreement') with Banc of America Leasing &
Capital, LLC, a Delaware limited liability company (the "Lessor"), in substantially the form
presented to and before this meeting;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1 . Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 65 and the Act, and in order to finance the acquisition of the
Improvements, the Mayor is hereby authorized and directed to execute the Lease/Purchase
Agreement, and the City Clerk is hereby authorized and directed to execute the Lease/Purchase
Agreement and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby
authorized and directed to cause the Lease/Purchase Agreement to be executed by the Lessor.
The Lease/Purchase Agreement is hereby approved in substantially the form submitted to this
meeting. The Mayor is hereby authorized to confer with the Lessor and Kutak Rock LLP, Bond
Counsel, in order to complete the Lease/Purchase Agreement in substantially the form submitted
to this meeting, with such changes as shall be approved by such persons executing the
Lease/Purchase Agreement, their execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Lease/Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
Section 2. The nominal principal amount of the Lease/Purchase Agreement may not
exceed $5,000,000 in the aggregate and the effective interest rate relating to the City's
obligations under the Lease/Purchase Agreement shall not exceed the maximum rate prescribed
by Arkansas law, including Amendment 65.
Section 3. It is affirmed that, pursuant to Amendment 65 and the Act, the payment
obligations of the City under the Lease/Purchase Agreement shall not constitute general
obligations of the City, but shall be special obligations, secured by and payable from the receipts
of the City' s solid waste fees and charges. The payment obligations shall additionally be secured
by a security interest in the Improvements as provided in the Lease/Purchase Agreement.
Section 4. The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the execution and delivery of
the Lease/Purchase Agreement, and to perform all of the obligations of the City under and
pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on
behalf of the City, to execute all papers, documents, certificates and other instruments that may
be required for the carrying out of such authority or to evidence the exercise thereof.
Section 5. The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
Section 6. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
PASSED and APPROVED this the 61h day of May, 2003.
APPROV D:
DAN COODY, Mayor
ATTEST__:
Kd& AA��
SONDRA SMITH, City Clerk
b • 2
NAME OF FILE: Ord. No. 4484
CROSS REFERENCE:
Item # Date Document
t 05/06/03 10rd. No. 4484
2 03/22/03 Staff Review Form w/attachments:
draft ordinance
memo to mayor/city council
Summary of Terms and Conditions
Appendix A
Appendix B
Amortization Schedule: Fire Trucks
3 05/24/03 Affidavit of Publication
NOTES:
NORTI*VEST ARKANSA4 EDITION
A* SaS Dem®c (0azew
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Leg I Clerk of the Arkansas Democrat-Gazette newspaper, printed and
published in Lowell , Arkansas, and that from my own personal knowledge
and reference to the files of said publication , the advertisement of:
P
was inserted in the regular editions on
s5 c
** Publication Charge : $
Subscribed and sworn to before me this
day of 2003.
No ary Publi
��al puEN
My Commission Expi es:
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ItAG
� t 11A520
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An invoice will be sent.
RECEIVED
MAY 2 8 2003
CITY OF FAYMEVILLE
CITY CLERK'S OFFICE
212 NORTH EAST AVENUE • P.O. BOX 1607 FAYETTENAI I E, ARKANSAS 72702 • (501 ) 442-1700
r
ORDINANCE NO. 4484 _
AN ORDINANCE AUTHORIZING THE EXECUTION AND
DELIVERY OF A MASTER EQUIPMENT LEASE/PURCHASE
AGREEMENT HAVING A NOMINAL PRINCIPAL AMOUNT OF
NOT TO EXCEED $5,000,000 FOR THE PURPOSE Of
FINANCING THE COST OF ACQUIRING CERTAIN SOLID �J/
WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND � .V, FayBH 119
PRESCRIBING OTHER MATTERS RELATING THERETO.
WIIERFAS, the City Council of aro City of FWattevll9, Arkansas ghe 'Gty) has dotermNad that there
Is a great need fa a mechanism to finance me wets of abc dsltbn of certain slid waste vehidas, came
and related equipment to benefit the residents of the City (the -ImprovemantS�: and
WHEREAS, Ina Gty is authorized and empayssed under Ina Provisions of the Ca fiession and laws
of the state of Arkansas, Indudkig perticularN ArtondmeM 65 to the CanstaW03 of the State of
Arkorvsav ( Nrendment 65, and the Local GvrernmaM Capast Impro+amait Revenue Bond Act of
1985. coddled as Arkansas Code Annotated (1998 Repl.) Sectkim 14-1134-401 at seq. (as from Into to
Ifire costs oamended,various capital ItR1P�tnW&n011b tch as thosB pd5hg Lha nnplU'emBnl3`o &UVKm the
whC11 IBBs9
obligations shall corssfitute special obligations of the City under Amendmem 65 and fine Act: and
WHEREAS, the City has made armagemants,for the entry Into a Master Equipment LeaserPumhase
m It
Agreeinene 'L.eawAudnase Af rsementj with Banc of America Leasing 8 Capital, LLC, a Delaware
frame lbbpaty comparry (tis -Lesson, In substanualy the forth presented to and before INS meeting:
NOW, THEREFORE, BE IT ORDAINED BY THE CIN COUNCIL OF THE Cf OF FAYETTEMLLE,
ARKANSAS THAT:
' Section 1. Under Ne authority of the Constitution and laws of the State Of Adrersses, including
partlwlarty Amendment 65 and the Act, and in order to finance Ina acquisition of the Improvamerts, the
Mayor is hereby avoartzed and directed to execute the Losse/Purchase Agreement, and the City Clerk
is hereby aulhonzed 6rd directed to execute the Lease/R+chase Agreement and to alfa Ne seal of the
City lterete, and the Mayor and the City Gerk are hereby authorized and directed to cause the
LeasrlPlndfilse Agraern int to be axeated M the Lessen. The Lease/Purchase Agreement is hereby
'approved in substantially the Icon subrrstted to this ineeang. The Mayor Is hereby authorized to confer
,with are Lessor and Kutak Rock LLP, Bond Counsel, n ardor to complete the Leese/Purahaso
Agreement in subslantaly the loam submlhed to this meeting, vviN such changes as sw be approved
by such persons "pouting the LeamoPurchase Agreement, tto'v execution to consllule wnduslve
evidence of such approval.
(Advica is given that a dopy of the Leesa/Purchese Agreement in substantially one form authorized to be
geculed Is w file wN the Gly Clerk and Is avatlable for fiv peeliw by any Interested person.)
SechaN2.The nonvnal pnndPal mount of the Lease/Purcnase Agreement may not exceed
$5.000.000 la tho ing to ft Cry's obligaecins under the
LeasaPurdtaxe Agr�nantt sneu not xexeaed the maxi nun e and the offec" Interest rate re e prescribed by Arkansas law, MCkid'vg
Aarendment 135.
Section 3.It Is affirmed Nat, Pursuant to Amendment 85 and the Act, the payment obligations; of No
Cay under one Leasa/Pumhase Agreement shall not consfitute general obligations of the City, but shall
be special cbllgations, secured by and payable horn Ina moopts of the Cly§ solid vasty lees and
.doges. The payment cbllgatlws shell addloonsly be secured by a security Interest In the
-Improvements as provided N the LeasaPurd,_ ^ Agreement.
SecbOn 4.The Mayor and Gy Clerk. for" w behalf of the Gy. are hereby authorized end dareciel
to de any sad aA "ngs necessary to eaeot tha exec tion and delivery of the LeaswPuwasa Agmamenl
cod to perfoam as of tte obfgatWo of the Cay under and pursuant aorato. The Maya and Na Cay
Clerk are furaor auNwzed and directed, b and on banal of the Cay, to smoule al papers, dowments,
certificates and other instruments that may be required fa the carrying cul of saw authority or to
evidence lila exemise thereof,
Section 5.The provisions of this Ordinance are hereby declared to be severable, and if any section,
please or provision shop for any reason be declared to be illegal a invalid, such declaration shall not
affect the vaudaly of the renwXm. of the sedlorsl phases a providons of NIs Ordinance.
Section 6.ArI atlinsnces, resolutions and pans thereof h eoaW herewith are hereby repealed to the
indent of such wnflcl.
PASSED just APPROVED this Ns 6th day of May, 2003.
APPROVED:
By:
DAN COODY, Maya
ATFc.ST:
SORA SMITH, City aerk
STAFF REVIEW FORM
XX AGENDA REQUEST • Residential Solid Waste V
CONTRACT REVIEW - Lease Agreement
GRANT REVIEW Amendment 65
f hGoa3 �\
For the Fayetteville City Council Meeting of :
FROM :
Stephen Davis Finance & Internal Services Div. Finance & Internal Services
Name Division Department
ACTION REQUIRED : Approval of a master lease agreement with Banc of America Leasing & Capital, LLC. The
leasing agreement provide the opportunity for the City, to utilize Amendment 65 to fund the acquisition of
enc" 'authorizing the Cit to execute the necessary
residential solid waste collecti s. An Or-dinAnGe�"� g Y
agreements with Banc of America Leasing & Capital, LLC for the City to participate in a Lease-To-Own lease
agreement for the residential solid_waste collection vehicles.
COST TO CITY :
No Cost At .This Time $
Cost of this request Program Category. / Project Name
$
Account Number Funds Used to Date Program / Project Category Name
Project Number Remaining Balance Fund Name
BuDG� REVIEW : �V/,q Budgeted Item Budget Adjustment Attached
Budget Manager Date
CO
N
TRACT/GRANT/LEASE REVIEW :
Accounting Ma ger Date Internal ditor Date
wwos
Date Purchasing Manager City Attorne 9 Date
STAFF RECOMMENDATION: Staff recommends approval Of the lease agreements.
)�,Y� Cross Reference .
Division Head Date
New Item : Yes No
/J14-
Department Director Date Previous Ord/Res# :
Z,/—,/'13
A 46 `,/—/03 Orig . Contract Date
Fina cn e & internal Services Dir . Date
Orig . Contract Number
7 �
Chiefinistrative Officer Date
71
Mayor LT- 7� D�te
• Staff Review Form - Page 2 •
Description Meeting Date,
Comments : Reference Comments :
Budget Manager
Accounting Manager
('on ( 11Zlr,wOo ugakA Le 09 a_
Purchasing Manager
ADA . Coordinator
Internal Auditor
Grants Coordinator
ORDINANCE NO.
AN ORDINANCE AUTHORIZING THE EXECUTION AND DELIVERY OF
A MASTER EQUIPMENT LEASE/PURCHASE AGREEMENT HAVING A
NOMINAL PRINCIPAL AMOUNT OF NOT TO EXCEED $5,000,000 FOR
THE PURPOSE OF FINANCING THE COST OF ACQUIRING CERTAIN
SOLID WASTE VEHICLES, CARTS AND OTHER EQUIPMENT; AND
PRESCRIBING OTHER MATTERS RELATING THERETO
WHEREAS, the City Council of the City of Fayetteville, Arkansas (the "City") has
determined that there is a great need for a mechanism to finance the costs of acquisition of
certain solid waste vehicles, carts and related equipment to benefit the residents of the City (the
"Improvements"); and
WHEREAS, the City is authorized and empowered under the provisions of the
Constitution and laws of the State of Arkansas, including particularly Amendment 65 to the
Constitution of the State of Arkansas ("Amendment 65") and the Local Government Capital
Improvement Revenue Bond Act of 1985, codified as Arkansas Code Annotated ( 1998 Repl.)
Sections 14- 164-401 et seg. (as from time to time amended, the "Act'), to enter into certain
short-term lease/purchase arrangements to finance the costs of various capital improvements
such as those comprising the Improvements, which lease obligations shall constitute special
obligations of the City under Amendment 65 and the Act; and
WHEREAS, the City has made arrangements for the entry into a Master Equipment
Lease/Purchase Agreement (the "Lease/Purchase Agreement') with Banc of America Leasing &
Capital, LLC, a Delaware limited liability company (the "Lessor"), in substantially the form
presented to and before this meeting;
NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE
CITY OF FAYETTEVILLE, ARKANSAS THAT:
Section 1 . Under the authority of the Constitution and laws of the State of Arkansas,
including particularly Amendment 65 and the Act, and in order to finance the acquisition of the
Improvements, the Mayor is hereby authorized and directed to execute the Lease/Purchase
Agreement, and the City Clerk is hereby authorized and directed to execute the Lease/Purchase
Agreement and to affix the seal of the City thereto, and the Mayor and the City Clerk are hereby
authorized and directed to cause the Lease/Purchase Agreement to be executed by the Lessor.
The Lease/Purchase Agreement is hereby approved in substantially the form submitted to this
meeting. The Mayor is hereby authorized to confer with the Lessor and Kutak Rock LLP, Bond
Counsel, in order to complete the Lease/Purchase Agreement in substantially the form submitted
to this meeting, with such changes as shall be approved by such persons executing the
Lease/Purchase Agreement, their execution to constitute conclusive evidence of such approval.
(Advice is given that a copy of the Lease/Purchase Agreement in substantially the form
authorized to be executed is on file with the City Clerk and is available for inspection by any
interested person.)
0 0
Section 2. The nominal principal amount of the Lease/Purchase Agreement may not
exceed $5,000,000 in the aggregate and the effective interest rate relating to the City' s
obligations under the Lease/Purchase Agreement shall not exceed the maximum rate prescribed
by Arkansas law, including Amendment 65.
Section 3. It is affirmed that, pursuant to Amendment 65 and the Act, the payment
obligations of the City under the Lease/Purchase Agreement 'shall not constitute general
obligations of the City, but shall be special obligations, secured by and payable from the receipts
of the City's solid waste fees and charges. The payment obligations shall additionally be secured
by a security interest in the Improvements as provided in the Lease/Purchase Agreement.
Section 4. The Mayor and City Clerk, for and on behalf of the City, are hereby
authorized and directed to do any and all things necessary to effect the execution and delivery of
the Lease/Purchase Agreement, and to perform all of the obligations of the City under and
pursuant thereto. The Mayor and the City Clerk are further authorized and directed, for and on
behalf of the City, to execute all papers, documents, certificates and other instruments that may
be required for the carrying out of such authority or to evidence the exercise thereof.
Section 5. The provisions of this Ordinance are hereby declared to be severable, and
if any section, phrase or provision shall for any reason be declared to be illegal or invalid, such
declaration shall not affect the validity of the remainder of the sections, phrases or provisions of
this Ordinance.
Section 6. All ordinances, resolutions and parts thereof in conflict herewith are
hereby repealed to the extent of such conflict.
PASSED and APPROVED this the 6`h day of May, 2003.
APPROVED:
AFS
DAN C ODY, Mayor
ATTEST:
SONDRA SMITH, City Clerk
2
FAYETTETILLE
THE CITY OF FAYETTEYILLE, ARKANSAS
DEPARTMENTAL CORRESPONDENCE
TO: Fayetteville City Council
THROUGH: Dan Coody, Mayor
Hugh Earnest, Chief Administrative Officer /
FROM: Stephen Davis, Finance & Internal Services Directory 1
DATE: March 27, 2003 vv
SUBJECT: Debt Management Program: Leasing Services
Background
City Council approved a Debt Management Policy (Policy) on November 5, 2002. The Debt
Management Committee met after approval of the Policy and determined the City needed to seek
statement of qualifications for bond counsel services and to seek requests for proposals for bond
underwriter services and for leasing services. A professional selection committee was formed to: 1)
provide oversight of the drafting of the request for qualifications for bond counsel services and the
request for proposals for the bond underwriter services and leasing services; 2) review the responses
to the request for qualification/proposals; conduct interviews of the selected respondents; and, 3)
recommend service providers for leasing services and bond underwriter services.
Current Status
In mid-January 2003, the Professional Selection Committee (Committee) met, reviewed and
approved the request for qualifications for bond counsel services and request for proposals for bond
underwriter and leasing services. The Committee reviewed the responses, developed a short list to
interview for each service to be provided and selected the firm or firms to provide the service. The
firms selected to provide services under this set of request for qualifications and request for
proposals are as follows: Bond Counsel Services - Gordon Wilboum of Kutak Rock LLP; Leasing
Services - Banc of America Leasing & Capital, LLC, and, Bond Underwriter Services — (two firms
were selected to provide bond underwriter services): Stephens, Inc and Crews & Associates.
City Council, on March 18 and April 1 , approved a Resolution of Intent to Reimburse and approved
a bond counsel agreement with Kutak Rock. Staff has negotiated two master lease agreements with
Banc of America Leasing & Capital, LLC. These master lease agreements provide a funding
mechanism to leverage current and future City funds in acquiring solid waste residential collection
vehicles and fire apparatus vehicles.
KASteve Davis\Debt Financing\Leasing Services BOA_ 2003 Council Memo.doc
•
There are two lease agreements submitted for approval because of the differences in revenues
pledged to fund the lease payments. The revenue stream pledged for the solid waste vehicles is the
solid waste fees collected and the debt is authorized under Amendment 65 of the Arkansas
Constitution. The revenue stream pledged for the fire apparatus vehicles is the general revenues of
the City and is authorized under Amendment 78 of the Arkansas Constitution.
The payment terms under each of the lease agreements would be for a period of no more than sixty
(60) months at a fixed interest cost of 2.89%.
/bj- 6� -erccceJ
Recommendation
Staff recommends City Council approval of the two master lease agreements with Banc of America
Leasing & Capital, LLC.
KASteve Davis\Debt Financing\Leasing Services BOA_ 2003 Council Memo.doc
SUMMARY OF TERMS AND CONDITIONS
Date: December 3, 2002
Lessee: City of Fayetteville, Arkansas
Lessor: Banc of America Leasing & Capital, LLC or its designee ("Lessor")
Equipment: Various essential use equipment including, but not limited to, sanitation
vehicles and receptacles, fire emergency response vehicles, specialized
constructionequipment such as paving machines, track hoes, and
excavators (individually "Unit" and collectively "Equipment").
Maximum Purchase Price: The lower of $5,000,000 and the fair market
value of the Equipment, which may with Lessor's prior consent include soft
costs such as freight, installation and taxes paid up-front by Lessor not
exceeding 20% of the Maximum Purchase Price. The Purchase Price for used
Equipment may be subject to verification by an independent third party
appraiser.
Lease Structure: A lease intended as security transaction; under which all tax benefits will
retrain with Lessee. The lease will be a net financial lease, and all expenses,
including (but not limited to) insurance, maintenance, and taxes, will be for the
account of Lessee.
Term: Lease Commencement Date: No later than February 14, 2003
Lease Term: 36, 48, or 60 months from funding.
Interim Rental Term: The Interim Rental Tetra will be equal to the number
of days from acceptance of the Equipment to the Lease Commencement Date.
Rent will be charged at the daily equivalent of the Tax Exempt Interest Rate.
Tax Exempt
Interest Rate: Fixed Rate Options
Option A: 3-Year Fixed Rate: 2.53%
Option B: 4-Year Fixed Rate: 2.76%
Option C: 5-Year Fixed Rate: 2.89%
The above rates will be held for 30 days from the date of this proposal.
Subsequent to that date and subject to the economic yield maintenance
requirements below, the Tax Exempt Interest Rate will be fixed at funding at
an interest rate equal to the following equation:
3-Year, Term: 3-Year H. 15 Constant Maturity x .65 + 85.3 basis points (bps)
- 4-Year Tem: 5-Year H. 15 Constant Maturity x .65 + 58.9 bps
5-Year Tem: 5-Year H. 15 Constant Maturity x .65 + 71 .9 bps
City of Fayetteville
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