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HomeMy WebLinkAbout137 - 10/18/1994 - AUTHORIZING THE PURCHASING AGENT TO ENTER INTO AN AGREEMENT FOR THE LEASE PURCHASE OF A PREFABRICATE ORDINANCE NO. 137, 1094_ OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE PURCHASING AGENT TO ENTER INTO AN AGREEMENT FOR THE LEASE-PURCHASE OF A PREFABRICATED BUILDING WHEREAS, the City is authorized under the provisions of Title 31, Article 15, Part 8, C.R.S. , to acquire necessary land, buildings, equipment and other property for its governmental and proprietary purposes under the provisions of a long term rental or leasehold agreement with an option to purchase such land, buildings, equipment or property and to provide for the payment of said property from any available municipal income; and WHEREAS, the City has received a proposal from Municipal Services Group, Inc. , to lease to the City a prefabricated building approximately 6,500 square feet in size and related sitework, hereafter referred to as the "building"; and WHEREAS, the City Council has determined that the City is in need of the building in order to provide a branch library in south Fort Collins; and WHEREAS, pursuant to Section 8-160(d) of the City Code, a contract may be awarded without competition if the Purchasing Agent determines in writing that there exists only one responsible source; and WHEREAS, the Purchasing Agent has determined Municipal Services Group, Inc. , is the only responsible source available to the City for this lease- purchase transaction; and WHEREAS, the Purchasing Agent has submitted this sole source determination to the City Manager and the City Manager has approved this sole source procurement; and WHEREAS, pursuant to Section 8-160(d) (3) of the Code, all sole source procurements over $50,000 must be approved by the City Council in an open meeting; and WHEREAS, the City Council has determined that it is in the best interest of the City to lease-purchase the Building from Municipal Services Group, Inc. ; and WHEREAS, the City desires to enter into a lease-purchase agreement with Municipal Services Group, Inc. , with respect to the leasing of the Building; and WHEREAS, the City Council has determined that the lease payments in the sum of $21,000 per quarter are reasonable and proper and represent the fair rental value of the Building and sufficient funds to make the lease payments for 1994 are appropriated and available in the City's general fund. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the Purchasing Agent be, and hereby is, authorized to enter into a lease-purchase agreement with MUNICIPAL SERVICES GROUP, INC. , for the above-described building in accordance with the following terms and provisions: The lease-purchase agreement shall be for an original term from the date of execution of the agreement through December 31, 1994. The agreement shall provide for renewable one-year terms thereafter, through December 31, 2004, subject to the annual appropriation of funds needed for lease payments. The total lease term, including the original and all renewal terms, shall not exceed the useful life of the Building. The City shall make equal quarterly payments throughout the term of such agreement. If the City leases the Building for the original term and all successive renewal terms, the payment to MUNICIPAL SERVICES GROUP, INC. , will total Six Hundred Ten Thousand Dollars ($610,000) in principal , plus interest at a fixed rate equal to 6.29% per year for the first five (5) years of the term of the- 1_ease__ Commenc-ing- with the_ s-ixth (&) year; the interest_ rate may be adjusted on a one time basis for the next five (5) years of the agreement. The Index used for the interest rate adjustment is determined by dividing the Base Interest Rate of 6.29% by the U.S. Treasury Note Yield for the five (5) year maturity ending July 31, 1994. This number is the Treasury Note Index Percent. The Treasury Note Index percent will then be multiplied by the U.S. Treasury Note Yield for the five (5) year maturity as of the day immediately preceding the commencement of the subsequent five (5) year lease period. This number will be the new interest rate for the remainder of the lease term. The outstanding principal balance as of that date will be used to determine the payment amounts for the subsequent five (5) year period. The City shall have an option to purchase the Building on any quarterly payment date of any term. The option to purchase shall be exercised by paying the quarterly payment due on said date and the purchase price due on said date. If the City renews the agreement for all the renewal terms and makes all payments during said terms, the City shall be deemed to have exercised the option to purchase the Building. This agreement shall constitute only a current expense of the City and shall not be construed to be a debt or pledge of the City's credit or revenues. The City's obligation to pay rent under this agreement shall be subject to annual appropriation of sufficient funds to meet this rental obligation. 2 Section 2. That the Council approves this lease-purchase transaction as a sole source procurement. Section 3. That the effective date of this ordinance shall be October 28, 1994. Section 4. That staff will request appropriation of the Six Hundred Ten Thousand Dollars ($610,000) to be provided to the City under the lease-purchase agreement at a later date. Section 5. That each budget adopted by the City during the term of this lease-purchase agreement shall contain the information required by Section 29-1- 103(37) (d) , C.R.S. , as amended. Introduced, considered favorably on first reading, and ordered published this 6th day of September, A.D. 1994, and to be presented for final passage on the 18th day of October, A.D. 1994. or �✓� ATTEST: City Passed and adopted on final reading this 18th day of October,. 1994. J r ATTEST: n City C erc 3