City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-02001 11/29/2022 Consent Item 13.
Agreement: Dell Financial Services
File ID: 2022-02001
Location: Citywide
Recommendation: Pass a Motion ratifying a lease-to-own agreement between the City’s Police Department and Dell Financial Services for an Isilon storage server in an amount not-to-exceed $300,000, executed on September 1, 2020, expiring on August 31, 2023.
Contact: Marnie Stigerts, Police Captain, Office of the Chief, (916) 808-0800, [email protected], Police Department
Presenter: None
Attachments:
1-Description/Analysis
2-Agreement
Additional Description/Analysis
Issue Detail: In 2020, the Sacramento Police Department (“SPD”) purchased a new Isilon storage server to replace the end-of-life Isilon storage server that was in use at the time. This server stores the SPD’s Body Worn Camera and In Car Camera videos, which must be retained per the City’s retention policy. Therefore, it was essential and cost effective to replace the old server at this time rather than to maintain a server that was nearing its end-of-life.
Subsequently, SPD discovered that Council approval is needed to use the State of Montana Master IT Equipment Lease Agreement 6525772 (“Master IT Agreement”) to purchase the server for $300,000, rather than using a purchase order with a NASPO cooperative agreement for $300,000 under City Council Motion No. 2020-00660. SPD has almost completed financing the server. As a result, staff is seeking Council ratification of the lease-to-own agreement (City Agreement No. 2020- 4297) in Attachment 2.
Policy Considerations: Pursuant to Sacramento City Code Section 3.56.090, all contracts for
File ID: 2022-02001 11/29/2022 Consent Item 13.
supplies or nonprofessional services involving an expenditure of $250,000 or more shall be awarded by the city council.
Economic Impacts: None.
Environmental Considerations: Not applicable.
Sustainability: Not applicable.
Commission/Committee Action: Not applicable.
Rationale for Recommendation: SPD initially sought authority to purchase the Isilon server for $300,000 through Motion No. 2020-0160 (“Motion”) utilizing the cooperative agreement NASPO ValuePoint# MNWNC-102. Subsequent to approval of the Motion, SPD discovered that the NASPO agreement was not the correct agreement to purchase the server. The Dell re-seller required a lease agreement utilizing the State of Montana Master IT Agreement. SPD believed it had authority under the Motion to execute the lease agreement (Exhibit A of the Motion). Accordingly, SPD executed City contract 2020-4297 for the Dell EMC Islion server. After execution, SPD learned that the authority under the Motion was set aside for something other than the server and was insufficient in the amount of allocated funds. The server is essential and cost effective and needed to replace the old server at this time rather than to maintain a server that was nearing its end-of-life. SPD has one more payment to be disbursed for the purchase of the server. Therefore, it is in the City’s best interest to ratify the execution of City contract 2020-4297.
Financial Considerations: Existing General Fund resources will be used to pay for the cost of the server.
Local Business Enterprise (LBE): Not applicable.
(Signature)
Brenda Deltgaddlo F ID1,1 1
(Signature) (Date)
(Signature) (Date)
Supervisor:
Division Manager:
Other:
(Date)
Dec 10, 2020
SACAMENTO CONTRACT Office of the Cpty Clerk
ROUTING SHEET
Contract Cover/Routing Form: Must Accompany ALL Contracts; however, it is NOT part of the contract.
General Information (Required)
Original Contract # (supplements only): Supplement/Addendum #:
Assessor's Parcel Number(s):
Contract Effective Date: 09/01/2020 Contract Expiration Date (if applicable):08/3 1 / 2 023 $ Amount (Not to Exceed): 300000 Adjusted $ Amount (+/-):
Other Party: Dell Financial Services
Project Title: Isilon Storage 3 Year Lease To Own
Project #: Bid/RFQ/RFP #:
City Council Approval: NO
Contract Processing Contacts
Department: Police
Contract Coordinator: Tammy Jones
if YES, Council File ID#:
Project Manager: Thuy Nguyen, Analyst
E ma il: [email protected]
Department Review and Routing
WW^I^G.C-k
Accounting: rr. D“ 1 ,
Dec 10, 2020
(Signature) (Date)
Special Instruction/Comments (i.e. recording requested, other agency signatures required, etc.) Recording Requested Other Party Signature Required
GAU File #20-173
FOR CLERK & IT DEPARTMENTS ONLY DO NOT WRITr 7 -7104T- 1/ THIS LINE 2020-4297
CC Rev. 12.19.2018
Contract #2020-4297
CITY OF SACRAMENTO, CALIFORNIA
LEASE PURCHASE SCHEDULE NO. 810-6650412-017
TO MASTER LEASE AGREEMENT NO. 6650412
THIS SCHEDULE IS SUBJECT TO AND INCORPORATES THE TERMS AND CONDITIONS OF MASTER LEASE AGREEMENT NO. 6650412 ("Agreement") DATED 0 1/0 3/2 0 1 3 BETWEEN DELL FINANCIAL SERVICES L.L.C. ("Lessor") AND CITY OF SACRAMENTO, CALIFORNIA ("Lessee").
Lessor hereby agrees to lease and/or make available to Lessee subject to the terms, conditions and provisions set forth in this Schedule and in the Agreement, the Products described below. Any capitalized term used herein and not defined herein shall have the meaning ascribed to it in the Agreement.
PRODUCT DESCRIPTION AND LOCATION: See below or Exhibit "A" attached to and made a part hereof.
PRODUCT SELLER: KOVARUS INC., 2000 CRO CANYON PL STE 250, SAN RAMON, CA 94583 Product Product Lessee Purchase Primary Term Commencement Description Location Order No. (Mos.) Date
See Exhibit 'A' See Exhibit `A' SACTO-0000057147 36 September 1, 2020 Rent is payable: in Advance
Payment Period: Annual
LEASE PURCHASE PROVISIONS
The following provisions shall apply with respect to this Schedule in addition to those provisions in the Agreement:
1. SECTION 4. RENT; TAXES; PAYMENT OBLIGATION.
Insert as a new last sentence to subsection (a) the following:
"For the purposes of this Schedule, the Rent, as well as the principal and interest portions of each Rent payment are shown in the chart provided on Exhibit "B", attached to and made a part hereof.
2. SECTION 11. REPRESENTATIONS AND WARRANTIES OF LESSEE.
For purposes of this Schedule, add paragraphs (j) through (t) as follows:
"(j) Lessee will comply with the information reporting requirements of Section 149(e) of the Code, including but not limited to, the execution and delivery to Lessor of information statements requested by Lessor; (k) Lessee will not do, cause to be done or fail to do any act if such act or failure to act will cause this Agreement, or any transaction hereunder, to be an Arbitrage Bond within the meaning of Section 148 of the Code or a Private Activity Bond within the meaning of Section 141 of the Code;
(I) The total cost of the Products listed in this Schedule will not be less than the total Principal Portion of the Rent listed in this Schedule; :
(m) The Products listed in this Schedule have or will be ordered within six months of the date hereof in order to commence such Schedule;
(n) The Products listed in this Schedule are expected to be delivered and installed, and the Seller fully paid, within one year from the date hereof;
Reference:
internal Use - Confidential
Master Lease Schedule "MLR
(o) No fund or account which secures or otherwise relates to the Rent has been established; (p) Lessee will not sell, encumber or otherwise dispose of any property comprising this Schedule prior to the final maturity or termination of such Schedule without a written opinion of nationally recognized bond counsel to the effect that any such disposition will not adversely affect the exclusion of interest on the Rent from gross income for federal income tax purposes; (q) Lessee agrees to execute, deliver and provide Lessor with satisfactory evidence of the filing of such documentation, as may be required for the purposes of properly reporting this Schedule, including, without limitation, IRS forms 8038-G or 8038-GC, as required under the Code;
(r) lt is expected that Rent under this Schedule will be paid from periodic appropriations of the Lessee deposited into the general fund of the Lessee, that such appropriations will equal the Rent due during each Fiscal Period of Lessee, and that all amounts paid for Rent will be from an appropriation made by the Lessee during the Fiscal Period in which such Rent is made;
(s) To the best of Lessee's knowledge, information and belief, the above expectations are reasonable; and (t) Lessee will comply with all applicable provisions of the Code, including without limitation Sections 103, 141 and 148 thereof, and the applicable regulations of the Treasury Department to maintain the exclusion of the interest components of Rent from gross income for purposes of federal income taxation.
Without limiting the generality of the foregoing, Lessor hereby gives notice to Lessee that, upon execution of this Schedule by Lessor, Lessor shall assign all of its right, title and interest in, to and under this Schedule, including all Products and all payments owing under such Schedule, to Dell Equipment Funding L.P. ("DEF") pursuant to a purchase agreement between the Lessor and DEF. Lessee hereby acknowledges and consents to such assignment and shall keep, or cause to be kept, a complete and accurate record of all such assignments in a manner and form necessary to comply with Section 149(a) of the Code and the Treasury Regulations promulgated thereunder. Lessor hereby directs Lessee to continue to make any and all payments required to be made under this Schedule directly to Lessor, as servicing agent for DEF, at the same address to which Lessee is currently making payments unless and until Lessor is directed by DEF to make such payments to a different address or payee."
TO THE EXTENT PERMITTED BY LAW, AND IN ADDITION TO LESSEE'S OBLIGATION UNDER SECTION 16 OF THE
AGREEMENT AND ANY AMENDMENTS THERETO, LESSEE HEREBY ASSUMES LIABILITY FOR, AND SHALL PAY
WHEN DUE, AND SHALL DEFEND LESSOR AND ITS SUCCESSORS AND ASSIGNS AGAINST, ANY AND ALL
LIABILITIES, LOSSES, DAMAGES, CLAIMS AND EXPENSES (INCLUDING REASONABLE ATTORNEY FEES)
RELATING TO OR ARISING OUT OF LESSEE'S BREACH OF ANY OF ITS REPRESENTATIONS, WARRANTIES, OR COVENANTS CONTAINED IN SECTION 11 OF THE AGREEMENT AS SUPPLEMENTED HEREIN.
3. SECTION 12. WARRANTY ASSIGNMENT; EXCLUSION OF WARRANTIES; LIMITATIONS ON LIABILITY; FINANCE LEASE.
For purposes of this Schedule, delete "FINANCE LEASE" in the title of this Section and delete the first and last sentences of paragraph (d).
4. SECTION 17. OWNERSHIP; LIENS AND ENCUMBRANCES; LABELS.
Insert at the end of this paragraph the following: "Notwithstanding the first sentence of this Section, upon Lessee's acceptance of the Products under this Schedule, title to the Products shall vest in Lessee subject to Lessor's rights under the Agreement; provided that, upon an Event of Default or any termination of this Schedule, other than by Lessee's purchase of the Products, title to the Products shall immediately and without any action by either party vest in Lessor, and Lessee shall immediately surrender possession of the Products to Lessor. Any such transfer of title shall occur automatically without the necessity of any bill of sale, certificate of title or other instrument of conveyance. Lessee shall, nevertheless, execute and deliver any such instruments as Lessor may request to evidence such transfer.
5. PURCHASE OPTION.
Provided that no Event of Default has occurred and is continuing, and upon satisfaction of all payment obligations herein by Lessee, Lessee shall be entitled to Lessor's interest in the Products, AS IS, WHERE IS, WITHOUT WARRANTY OR
RECOURSE, EXPRESS, IMPLIED OR OTHERWISE, BY OR AGAINST LESSOR, INCLUDING ANY WARRANTIES OF Reference: Page 2 of 3
Master Lease Schedule TEL P
Internal Use - Confidential
DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, OR AGAINST INFRINGEMENT, other than the absence of any liens by, through or under Lessor.
As continuing security for Lessee's obligations hereunder, Lessee hereby grants to Lessor, a first-priority security interest in all of Lessee's rights and interest in and to the Products and all proceeds thereof, free and clear of all security interests, liens or encurnbrances whatsoever.
6. COMPLETION OF SCHEDULE: Lessee hereby authorizes Lessor to insert or update the serial numbers of the Products from time to time as necessary.
If Lessee delivers this signed Schedule, any amendment or other document related to this Schedule or the Master Lease (each a "Document") to Lessor by facsimile transmission, and Lessor does not receive all of the pages of that Document, Lessee agrees that, except for any pages which require a signature, Lessor may supply the missing pages to the Document frorn Lessor's database which conforms to the version number at the bottorn of the page. If Lessee delivers a signed Document to Lessor as an e-mail attachment, facsimile transmission or by U.S. mail, Lessee acknowledges that Lessor is relying on Lessee's representation that the Document has not been altered. Lessee further agrees that, notwithstanding any rule of evidence to the contrary, in any hearing, trial or proceeding of any kind with respect to a Document, Lessor may produce a tangible copy of the Document transmitted by Lessee to Lessor by facsimile or as an e-rnail attachment and such signed copy shall be deemed to be the original of the Document. To the extent (if any) that the Document constitutes chattel paper under the Uniform Commercial Code, the authoritative copy of the Docurnent shall be the copy designated by Lessor or its assignee, from time to time, as the copy available for access and review by Lessee, Lessor or its assignee. All other copies are deemed identified as copies of the authoritative copy. In the event of inadvertent destruction of the authoritative copy, or corruption of the authoritative copy for any reason or as the result of any cause, the authoritative copy may be restored from a backup or archive copy, and the restored copy shall become the authoritative copy. At Lessor's option, this electronic record may be converted into paper form. At such time, such paper copy will be designated or marked as the authoritative copy of the Document.
By signing below, each of the parties hereto agrees to be bound by the terms of the Agreement, this Schedule and the attached Exhibits "A" and "B".
CITY OF SACRAMENTO, CALIFORNIA
"Lessee"
DELL FINANCIAL SERVICES L.L.C.
"Lessor"
By:
LI-111,H o c 1— 2
By:
Name: Christopher C. Conlin Name: Josh Plunkett
Title: Assistant City Manager Title: Sr Manager Operations Date: Dec 17, 2020 Date: Dec 14, 2020
CITY OF SACRAMENTO, CALIFORNIA
"Lessee"
Audreyell Anderson Name:
Title: Sr. Dep. City Attny
Dec 15, 2020
Date:
CITY OF SACRAMENTO, CALIFORNIA
"Lessee"
Name: City Clerk Attestment
Assist. City Clerk Title:
Dec 17, 2020
Interat71464*Ille TELP
AuclrEy4, 167e, 15, 0
By:
Date:
Dell Customer Communication - Confidential.
One Dell Way
Round Rock, TX 78682
CITY OF SACRAMENTO, CALIFORNIA
Amortization Schedule 81-6650412-017
Exhibit '13'
PAYMENT # OPENING BALANCE RENT INTEREST PRINCIPAL BALANCE PURCHASE PRICE 290,171.74
DLED* -12,477.38 277,694.36
1 277,694.36 96,723.82 0.00 96,723.82 180,970.54 189,675.69 2 180,970$4 96,723.82 8,256.69 88,467.13 92,503.40 101,208.55 3 92,503.40_ 96,723.82 4,220.42 92,503.40 0.00 0.00
*DFS LEASE EQUIPMENT DISCOUNT