HomeMy WebLinkAbout144 - 10/21/1997 - AUTHORIZING AN AGREEMENT FOR THE LEASE-PURCHASE FINANCING OF A NEW FINANCE SYSTEM ORDINANCE NO. 144, 1997
OF THE COUNCIL OF THE CITY OF FORT COLLINS
AUTHORIZING THE PURCHASING AGENT TO ENTER
INTO AN AGREEMENT FOR THE FINANCING BY
LEASE-PURCHASE OF A NEW FINANCE SYSTEM
WHEREAS, the City is authorized under the provisions of Title 31, Article 15, Part 8,
C.R.S., to acquire necessary 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 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 Koch Financial Corporation("Koch")to
lease to the City a Finance System, consisting of the following:
• HP Netserver LH Pro Deployment Server $ 13,705
• HP 250/2 SMP Application Server 15,221
• Ethernet Server 25,000
0 Oracle Database Software 160,000
• JD Edwards Software & Services 1,351,074
Total 1 565 000
WHEREAS,Koch will provide financing for the entire project,but will take title to and lease
back to the City only the hardware required for the system; and
WHEREAS,the City Council has determined that it is in the best interest of the City to lease
the above-described Finance System from Koch, which is also providing financing for the Finance
System acquisition; and
WHEREAS, the City desires to enter into a lease-purchase agreement with respect to the
leasing and financing of the Finance System; and
WHEREAS, the useful life of the Finance System hardware is longer than the maximum
lease-purchase term of five years; and
WHEREAS, the City has determined that the lease payments to result from the proposed
arrangement will require payments by the City in the sum of$89,546 per quarter, and that payments
in that amount are reasonable and proper and represent the fair rental value of the Finance System;
and
WHEREAS, sufficient funds to make the lease payments for 1998 are included in the City
Manager's 1998 recommended budget.
NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT
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 for the above-described Financial System with Koch Financial Corporation in
accordance with the following terms and provisions:
The agreement shall be for an original term from the execution date of the agreement
through December 31, 1997. The agreement shall provide for renewable one-year
terms thereafter up to a total term of five years, subject to annual appropriation of
funds needed for lease payments. The total lease terms, including the original and
all renewal terms, shall not exceed the useful life of the property.
The City shall make equal quarterly payments throughout the term of such agreement
but subject to annual appropriation of funds needed for such payments.
If the City leases the Finance System for the original term and all renewal terms, the
payment to Koch Financial Corporation will total the sum of the principal,
$1,565,000, plus interest at a fixed rate equal to 5.28% per year, which is a
reasonable amount.
The City shall have the option to purchase part or all of the Finance System 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 unpaid principal due after 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
said Finance System.
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.
Section 2. That the amount of One Million, Five Hundred-Sixty Five Thousand Dollars
($1,565,000)to be provided to the City under the lease-purchase agreement is hereby appropriated
for the fiscal year 1997 as unanticipated revenue in the appropriate funds for the acquisition of the
Finance System in accordance with the terms and provisions of the lease-purchase agreement, upon
receipt thereof.
Introduced, considered favorably on first reading, and ordered published this 7th day of
October, A.D. 1997, and to be presented for final passage on the 21 st flay of October,A.-9. 1997.
�Vlayor
ATTEST:
14a" -A�a�-6 1
City Clerk
Passed and adopted on final reading this 21 st day of O er, A.D. 199J
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for
ATTEST:
)1tyClerk