Regular Meeting
07/15/24 06:00 PM
Finance
Sydnie Harris
Resolution
Doc ID: 5714
COUNCIL RESOLUTION
AGENDA MATTER:
A RESOLUTION AUTHORIZING THE EXECUTION OF A MASTER LEASE-PURCHASE AGREEMENT
AND RELATED DOCUMENTS WITH HOLMAN CAPITAL FOR THE LEASE/PURCHASE OF A
ENFORCER PIERCE ULTIMATE CONFIGURATION PUMPER FIRE ENGINE, AND THE LEASE/PURCHASE OF A BME INTERNATIONAL TYPE # 3 BRUSH TRUCK.
EXECUTIVE SUMMARY:
The Barstow City Council previously approved the acquisition of a Fire Engine with residual funds remaining from budget savings in FY 2024. The City analyzed the impact of acquisition vs. lease in the lease-purchase of a Pierce Ultimate Configuration (PUC) Pumper Fire Engine and a BME International Type # 3 Brush Truck . It was determined by this analysis that, with the approval of the master-lease purchase agreement with Holman Capital, the City can acquire a new Fire Engine as well as a new BME International Type # 3 Brush Truck. The Council approval of BFPD Resolution XX-202X will allow the City to enter into a master lease-purchase agreement with Holman Capital to facilitate acquisition of the fire engine and brush truck.
DISCUSSION:
To facilitate the acquisition of a Pierce Fire Engine and BME Brush Truck, (2) proposals for Semi Annual Lease Financing were requested from the following entities and their total interest rate of their financing estimates were as follows:
1) Holman Capital - 6.149% plus $5,000 Documentation Fee 2) PNC Equipment Finance - 6.54%
Staff is requesting that the City Council authorize the project financing to be approved on a not to exceed basis, as the total costs of the turnkey fire engine (including all necessary after market equipment and supplies), and the brush truck are estimates based upon the knowledge that there may be necessary additions/deletions from the estimates. Therefore, the amount not to exceed would allow staff the ability to move forward with negotiating the equipment purchases while allowing some flexibility should the estimates fluctuate due to unforeseen reasons. The breakdown for the fire apparatus and equipment are detailed below:
Description Amount Not to Exceed
Fire Engine $ 1,124,984
Brush Truck $ 575,016
Total Project Cost $ 1,700,000
Based on the equipment estimates, Holman Capital has provided the best option for total cost financing for the Pierce Fire Engine, and the BME Brush Truck. The principal amount (not to exceed $1,700,000) Regular Meeting
07/15/24 06:00 PM
Finance
Sydnie Harris
Resolution
Doc ID: 5714
COUNCIL RESOLUTION
and interest ($1,277,375.20), for the 20-year term totals $2,977,375.20 and will be paid on a semi-annual schedule, as follows:
Amount Financed: $1,700,000
Interest Rate: 6.149%
Term: 20 Years
Total Interest (20 Years): $1,277,375.20
Payment Frequency: Semi-Annual (2/year)
Semi Annual Payment Amount: $74,434.38
FISCAL IMPACT:
As per the description in Discussion Section of this staff report. The principal of $1,700,000 and interest of $1,277,375.20 over the 20-year term totals $2,977,375.20 to be paid from Measure Q - Fire Department (102.225.225.08.XXX)
RECOMMENDED ACTION:
Staff recommends the City Council:
1. Approve BFPD Resolution XX-202X authorizing the Barstow City Council to execute the Master Lease-Purchase Agreement and related documents with Holman Capital to finance the acquisition of a Pierce Fire Engine, and the BME International Brush Truck with a cost not to exceed a total of $1,700,000 collectively, as defined in the Discussion Section of this staff report.