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City of Missoula, Montana Item to be Referred to City Council Committee Committee: A & F Item: Master Equipment Lease-Purchase Agreement Resolution Date: June 12, 2009 Prepared by: Brentt Ramharter Initiated by: Brentt Ramharter Action Required: Approve the "RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER EQUIPMENT LEASE-PURCHASE AGREEMENT AND RELATED DOCUMENTS FOR THE PURCHASE OF VARIOUS ITEMS OF CAPITAL EQUIPMENT AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH" Recommended Motion: I move the City Council approve the: RESOLUTION AUTHORIZING THE EXECUTION AND DELIVERY OF A MASTER EQUIPMENT LEASE-PURCHASE AGREEMENT AND RELATED DOCUMENTS FOR THE PURCHASE OF VARIOUS ITEMS OF CAPITAL EQUIPMENT AND DETERMINING OTHER MATTERS IN CONNECTION THEREWITH". Timeline: Referral to committee: June 12, 2009 Committee discussion: June 17, 2009 Deadline: Have council approve at June 22, 2009 meeting Background and Alternatives Explored: WHEREAS, the City proposes to enter into a capital Master Equipment Lease/Purchase Agreement, dated on or after April 1, 2009 (the “Master Equipment Lease/Purchase Agreement”), by and between the City, as Lessee, and California First National Bank, a California corporation, its successors and assigns (the “Lessor”), where the City may enter into individual tax-exempt leases for the purchase and financing of various items of capital equipment; and WHEREAS, there has been prepared and is before this meeting a form of the Master Equipment Lease/Purchase Agreement, dated as of April 2009, and Schedule Nos. 01, 02, and 03 to the Master Equipment Lease/Purchase Agreement (collectively, the “Lease”), which provides for an approximately ten-year lease in a principal amount not to exceed $1,900,000 for the acquisition of various items of capital equipment (the “Equipment”) as described in the City’s Capital Improvements Plan and incorporated herein by reference; and WHEREAS, the City ran a request for proposals, with advice from Springsted Incorporated (the City’s financial advisor), to finance the Equipment and certain other capital equipment anticipated to be purchased in the next few fiscal years and the Lessor submitted a proposal to the City that provided the lowest financing cost for the Equipment; and ---PAGE BREAK--- WHEREAS, the City has or will take the necessary steps, including those relating to any applicable legal bidding requirements, to arrange for the acquisition of the Equipment; and WHEREAS, by entering into the Lease, the City will exercise the powers under the Constitution and laws of the State of Montana pursuant to, inter alia, Montana Code Annotated, Sections 7-1-4124 and 7-8-4101, as amended; and WHEREAS, the Equipment is essential for the City to perform its governmental functions; and WHEREAS, the Lease is subject to annual non-appropriation, and the City has the right to terminate the Lease, in accordance with the terms thereof, as the end of any fiscal year; and WHEREAS, in the event that the City does not appropriate funds to make the lease payments in any fiscal year, the City will use the right to use and possess the Equipment financed purchase to the Lease. Financial Implications: General Fund implications – required debt service with annual payments (see attached schedule - in Master Lease Spreadsheet). Attachments: Master Lease Agreement Master Lease Spreadsheet With Actual Purchases