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HomeMy WebLinkAbout012 - 02/19/2008 - AUTHORIZING THE PURCHASING AGENT TO ENTER INTO AN AGREEMENT TO FINANCE EQUIPMENT BY LEASE-PURCHASE ORDINANCE NO. 012, 2008 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE PURCHASING AGENT TO ENTER INTO AN AGREEMENT TO FINANCE EQUIPMENT BY LEASE-PURCHASE WHEREAS, the City of Fort Collins, Colorado (the "City") has a need for and desires to provide certain real and personal property for City purposes; and WHEREAS, the City is authorized by the Colorado Constitution, Article XX, §6, its Charter and Part 8 of Article 15 of Title 31, Colorado Revised Statutes, as amended (the "Act'), to enter into rental or leasehold agreements in order to provide necessary land, buildings, equipment and other property for governmental or proprietary purposes, and such agreements may include options to purchase and acquire title to such leased or rented property; and WHEREAS, the City has received a proposal from Koch Financial Corporation to lease equipment to the City(the "Equipment'), consisting of an energy efficiency lighting upgrade for 28 city facilities; and WHEREAS, the City Council has determined that it is in the best interest of the City to lease the above-described equipment from Koch Financial Corporation, which is also providing financing for the Equipment acquisition; and WHEREAS, the City desires to enter into a lease-purchase agreement (the "Agreement') with respect to the leasing and financing of the Equipment; and WHEREAS, the useful life of the Equipment is longer than the maximum lease-purchase term of five (5) years; and WHEREAS, the City has determined that the lease payments to result from the proposed Agreement will require payments by the City in the sum of $42,146 per quarter, and that payments in that amount are reasonable and proper and represent the fair rental value of the Equipment; and WHEREAS, funds for the 2008 lease payments are included in the 2008 budget; and WHEREAS, the lease of the Equipment will not constitute a "multiple-fiscal year direct or indirect debt or other financial obligation" of the City within the meaning of Article X §20(4)(b) and may therefore be entered into without voter approval; and WHEREAS, Article V, Section 9, of the Charter of the City of Fort Collins permits the Council to make supplemental appropriations by ordinance at any time during the fiscal year, provided that the total amount of such supplemental appropriations, in combination with previous appropriations for that fiscal year, does not exceed the then current estimate of actual and anticipated revenues to be received during the fiscal year. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That the Purchasing Agent is hereby authorized to enter into a lease- purchase agreement for the above-described Equipment with Koch Financial Corporation in accordance with the following terms and provisions: a. The original term of the Agreement will commence on the execution date and extend through December 31, 2008. The Agreement shall provide for renewable one-year terms up to a total term of five (5) 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. b. The City will make equal quarterly payments throughout the term of the Agreement but subject to annual appropriation of funds needed for the payments. C. If the City leases the Equipment for the original term and all renewal terms, the payment to Koch Financial Corporation will total the sum of the principal, $765,347, plus interest at a fixed rate equal to 3.75% per year. d. The City will have the option to purchase part or all of the Equipment 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 that date. e. If the City renews the Agreement for all the renewal terms and makes all payments during those terms, the City will have exercised the option to purchase the Equipment. f. The Agreement will 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 Seven Hundred Sixty Five Thousand, Three Hundred Forty Seven Dollars ($765,347) to be provided under the Agreement is hereby appropriated for expenditure in the General Fund from unanticipated revenue in the appropriate funds for the acquisition of the equipment in accordance with the terms and provisions of the Agreement, upon receipt thereof. Section 3. Any inconsistency between the provisions of this Ordinance and those of the Act is intended by the Council. To the extent of any such inconsistency the provisions of this Ordinance shall be deemed made pursuant to the Charter of the City and shall supersede, to the extent permitted by law, the conflicting provisions of the Act. -2- introduced, considered favorably on first reading, and ordered published this 5th day of February, A.D. 2008, and to be presented for final passage on the 19th day of February, A.D. 2008. Mayo ATTEST: City Clerk Passed and adopted on final reading on the 19th day of ary, A.D. 2008. Mayor ATTEST: City Clerk -3-