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HomeMy WebLinkAbout2014-108-12/02/2014-AUTHORIZING THE PURCHASING AGENT TO LEASE ADDITIONAL EQUIPMENT UNDER THE CITY'S STANDARD MASTER LEAS RESOLUTION 2014-108 OF THE COUNCIL OF THE CITY OF FORT COLLINS AUTHORIZING THE PURCHASING AGENT TO LEASE ADDITIONAL EQUIPMENT UNDER THE CITY'S STANDARD MASTER LEASE AGREEMENT WITH PINNACLE PUBLIC FINANCING, INC. AND TO ENTER INTO A FIRST AMENDMENT TO THAT STANDARD MASTER LEASE AGREEMENT WHEREAS, the City of Fort Collins (the "City") and Pinnacle Public Finance, Inc. ("Pinnacle") have previously entered into that certain "Standard Master Lease Agreement" dated February 15, 2011, (the "Agreement"); and WHEREAS, the Agreement provides that Pinnacle will lease to the City certain "Equipment" as generally described in Section 1.1 of the Agreement and as specifically described in each "Schedule of Equipment" that is agreed to in the future and added to the Agreement as Exhibit A by the City and Pinnacle (collectively, the "Equipment"); and WHEREAS, the Agreement contemplates an initial term of. one year, with up to four additional one-year terms, not to exceed a total of five years; and WHEREAS, Article V of the Agreement grants the City the option to purchase any or all of the Equipment in accordance with the provisions of Article V of the Agreement; and WHEREAS, the Agreement also expressly provides that all of the City's obligations under the Agreement are subject to the City Council's annual appropriation of each year's lease payments and, if such appropriation does not occur, Pinnacle's sole remedy is to repossess the Equipment; and WHEREAS, since entering into the Agreement, the City's Purchasing Agent has, after approval by the City Council, leased Equipment on the City's behalf from Pinnacle under seven separate schedules of equipment and corresponding payment schedules; and WHEREAS, the Purchasing Agent has negotiated with Pinnacle the lease of additional Equipment under the Agreement as described in the "Schedule of Equipment No. 8" dated December 9, 2014, attached hereto as Exhibit "A" and incorporated herein by reference ("Schedule of Equipment No. 8"); and WHEREAS, the Purchasing Agent has also negotiated with Pinnacle quarterly lease payments of Sixty Six Thousand Five Hundred Fifty One Dollars and Fourteen Cents ($66,551.14) for five years for the Equipment being leased in Schedule of Equipment No. 8 as set forth in the parties' "Payment Schedule, Equipment Schedule #8" dated December 9, 2014, (the "Payment Schedule"); and WHEREAS, the funds needed for the City's quarterly lease payments that will be owed to Pinnacle in 2015 for the Equipment being leased in Schedule of Equipment No. 8, have been budgeted and appropriated in the City's 2015 annual budget that was adopted by Council on November 18, 2014; and 1 WHEREAS, the Purchasing Agent and Pinnacle have also negotiated the "First Amendment to Master Lease Agreement" attached hereto as Exhibit `B" and incorporated herein by reference (the "First Amendment"); and WHEREAS, the purpose of the First Amendment is to amend certain language in Section 1.2 of the Agreement to clarify the City's and Pinnacle's original (and current) intent with respect to the language in Section 1.2 that provides that the City is to be listed as the owner on the titles of motor vehicles included in the Equipment leased under Schedule of Equipment No. 8 and that have been leased under the previous seven schedules of equipment; and WHEREAS, that such original (and current) intent of this motor-vehicle-title language was and is not to change the lease-purchase nature of the Agreement, but solely for the purposes of establishing ownership of the leased motor vehicles for federal tax purposes, reducing Pinnacle's liability for any civil claims arising from the City's use of the motor vehicles, and for the City's administrative convenience in establishing clear title to vehicles when the City exercises its option to purchase any of them; and WHEREAS, this intent is further supported in the First Amendment by the addition of a new Section 1.4 to the Agreement to establish a process by which the originals of the State of Colorado certificates of title for the leased motor vehicles will be kept in the possession of a third-party escrow agent until the City either exercises its option under the Agreement to purchase a leased motor vehicle, in which event the vehicle's title will be delivered to the City, or the Agreement terminates as a result of nonappropriation, as a result of a default under the Agreement by the City, or upon reaching the end of the lease term, in which events the certificates of title will be delivered to Pinnacle; and WHEREAS, the City is authorized in Section 8(c) of Article V of the City Charter, Article IV in Chapter 8 of the City Code, and in C.R.S. Section 31-15-801 to enter into multiple- year lease-purchase agreements provided each year's lease payments are subject to annual appropriation; and WHEREAS, the lease of the Equipment in Schedule of Equipment No. 8 under the Lease will not constitute a "multiple fiscal year direct or indirect debt or other obligation" of the City within the meaning of Section 20(4)(b) of Article X of the Colorado Constitution and, therefore, this lease of Equipment under Schedule of Equipment No. 8 can be entered into without voter approval; and WHEREAS, the City Council has determined that it is in the City's best interests to lease from Pinnacle all of the Equipment described in the Schedule of Equipment No. 8 in accordance with the terms and conditions of the Agreement; and WHEREAS, the City Council has also determined that it is in the City's best interests for the City to enter into the First Amendment. - 2 - NOW, THEREFORE, BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FORT COLLINS as follows: Section 1. That all of the recitals set forth above in this Resolution are hereby adopted as the City Council's findings in support of this Resolution. Section 2. That the First Amendment is hereby approved and the Purchasing Agent is authorized to enter into it on the City's behalf. The Purchasing Agent, in consultation with the City Attorney, may agree to modifications and amendments to the First Amendment as may be needed to protect the City's interests and that are consistent with the stated purposes of this Resolution. Section 3. That the lease of the Equipment in Schedule of Equipment No. 8 under the Agreement, as amended in the First Amendment, and the Payment Schedule are hereby. approved, and the Purchasing Agent is hereby authorized to enter into the Schedule of Equipment No. 8 and the Payment Schedule on the City's behalf. The Purchasing Agent may agree, in consultation with the City Attorney, to modifications and amendments to Schedule of Equipment No. 8 and the Payment Schedule as may be needed to protect the City's interests and that are consistent with the stated purposes of this Resolution. Passed and adopted at a regular meeting of the Council of the City of Fort Collins this 2nd day of December, A.D. 2014. OF FO ayor ATTEST: o tr City Clerk .'.q�Do 3 EXHIBIT A Schedule of Equipment No. 8 December 9,2014 RE: STANDARD MASTER LEASE AGREEMENT entered into as of February 15, 2011, ("Agreement"), between Pinnacle Public Finance("Lessor") and the City of Fort Collins, Colorado ("Lessee"). All terms used and not otherwise defined herein have the meanings ascribed to them in the Agreement. The following items of Equipment are hereby included under this Schedule to the Agreement: Item Department(Fund Description Oty Cost Term Streets Transportation Pavement Milling Machine 1 660,000.00 5 yrs Streets/ Transportation Sidewalk Tractor with accessories 1 93 200.00 5 yrs Streets/ Transportation Dump Body for Plow truck 1 61,000.00 5 yrs Police/General KFCG Ford Police Interceptor AW D 1 26 700.00 5 yrs Police/General Police Vehicle Equipment 1 lot 7,800.00 5 vrs Police/General Ford Police Interceptor AWD 4 106,800.00 5 Yrs Police/General Police Vehicle Equipment 1 lot 49,500.00 5 yrs IT/Data& Dell OptiPlex 9020 Mmitower 25 22,000.00 Communications 5 yrs IT/Data& Dell OptiPlex 9020 Small Form Factor 50 44,100.00 Communications 5 rs Data& Communications Dell Latitude E6440 CTO&case 91 126,100.00 Co 5 vrs IT/Data& Dell Venue 11 Tablets 10 13,500.00 Communications 6 rs IT/Data& Dell Latitude E6430 ATG 10 24,000.00 Communications 5 rs . IT/Data& E Porte Plus 95 8,300.00 Communications 5 rs IT/Data& Dell 22 Monitor- P2214H 20 3,300.00 Communications 5 yrs IT/Data& Dell 24 Monitor-P2414H 10 2,500.00 Communications 5 yrs IT/Data& Computer accessories 1 lot 6,750.00 Communications 5 rs Total: 1,255,550.00 s yrs Lessee hereby represents, warrants and covenants that its representations, warranties and covenants set forth in the Agreement are true and correct as though made on the Commencement Date of Payments under this Schedule. The terms and provisions of the Agreement(other than to the extent that they relate solely to other Schedules or Equipment listed on other Schedules) are hereby incorporated into this Schedule by reference and made a part hereof. Lessee: the City of Fort Collins, Colorado Lessor: Pinnacle Public Finance By By Gerry S. Paul Director of Purchasing& Risk Management Name Title Date: Date: Schedule of Equipment No 8 1 December 9, 2014 FIRST AMENDMENT TO STANDARD MASTER LEASE AGREEMENT This First Amendment to Standard Master Lease Agreement (this "Amendment") is entered into this day of 2014, by and between Pinnacle Public Finance, Inc. ("Lessor') and the City of Fort Collins, Colorado, a home rule municipal corporation ("Lessee"). The Lessor and Lessee are hereafter sometimes jointly referred to as the "Parties". RECITALS WHEREAS, the Lessor and Lessee have previously entered into that certain "Standard Master Lease Agreement" dated February 15, 2011 (the "Agreement"); and WHEREAS, each "Schedule of Equipment"attached as Exhibit "A" to the Agreement and each corresponding "Payment Schedule" attached as Exhibit "B" to the Agreement, together constitute a "Schedule"; and WHEREAS, each Schedule and the terms and provisions of the Agreement,together with all exhibits attached thereto and any amendments and modifications to the Agreement, are incorporated by reference into each such Schedule and constitute under the Agreement a separate and independent lease and installment purchase of the Equipment therein described and are referred to as a "Lease" in the Agreement; and WHEREAS, under each Lease, the Lessor leases to the Lessee certain "Equipment" as identified in Section 1.1 of the Agreement, which Equipment includes motor vehicles; and WHEREAS, Article V of the Agreement also grants the Lessee the option to purchase any or al I of the Equipment in accordance with the provisions of Article V of the Agreement; and WHEREAS, Sections 1.3, 2.4, and 3.3 of the Agreement expressly provide that all of the Lessee's obligations under each Lease are subject to annual appropriation by the Lessee's City Council (the "Council") for the funds needed to meet those obligations, which appropriation is entirely within the Council's sole discretion; and WHEREAS, Section 3.3 of the Agreement provides that if the Council has not appropriated the needed funds and the Lessee has not otherwise exercised its option to purchase the Equipment, the Lessor is entitled to take possession of such Equipment; and WHEREAS, consistent with the lease-purchase nature of each Lease, Section 1.2 of the Agreement provides that during the term of each Lease, title to the Equipment will be in the Lessor subject to any transfer of that title upon the Lessee's exercise of its option to purchase any or all of the Equipment as provided in Article V of the Agreement; and WHEREAS, notwithstanding this statement in Section 1.2 of the Agreement that the Lessor holds title to the Equipment, Section 1.2 also states: "Lessor and Lessee agree that the Lessee shall be listed as owner on vehicle titles and shall be treated as the owner for all purposes and it will not be necessary for Lessor to be listed as lienholder on vehicle titles"; and WHEREAS, the Lessee and Lessor now A;ish ,to clarify in this Amendment, that their original (and current) intent in the Agreement for this motor-vehicle-title language in Section 1.2 was agreed to by the Parties solely for the purposes of: (1) establishing ownership of the Equipment for federal tax purposes; (2) reducing the likelihood of the Lessor's liability for any civil claims that might arise from the Lessee's use of the leased motor vehicles under the Lease; and (3) for the Lessee's administrative convenience in establishing clear title to such motor vehicles when the Lessee does exercise its option under the Agreement to purchase any or all such motor vehicles; and WHEREAS, it is also not the Parties' intention by entering into this Amendment to now modify, change or in any way diminish the lease-purchase nature of the the Agreement and each Lease with respect to the motor vehicles leased under a Lease or to do so with respect to the contingent nature of the Lessee's obligations under each Lease being subject to Council's annual appropriation or to do so with respect the Lessee's fully vested title ownership of the motor vehicles being complete when the Lessee has exercised its option to purchase them under the Agreement; and WHEREAS, the capitalized words and terms used herein shall have the same meaning given to them in the Agreement, except as expressly provided herein. NOW, THEREFORE, in consideration of the mutual covenants and promises of the Parties contained in this Amendment and other good and valuable consideration, the receipt and adequacy of which are acknowledged, the Parties agree to the following terns and conditions of this Amendment. AGREEMENT Section 1. That all of the recitals set forth above in this Amendment are hereby incorporated into this Amendment and the Agreement, as amended by this Amendment, as though fully set forth in the body hereof. Section 2. That Section 1.2 of the Agreement is hereby amended to read in full as follows: 1.2 Title During the term of each Lease, title to the Equipment will be in Lessor subject to the transfer to Lessee upon Lessee's purchase of the Equipment as provided herein. Upon the termination of the Lease for any reason other than Lessee's purchase of the Equipment, title to any Equipment not purchased by Lessee at the time of termination shall remain in Lessor. Lessor at all times will have access to the Equipment for the purpose of inspection, alteration and repair. Notwithstanding that Lessor holds naked legal title under each Lease until title has fully vested in Lessee, Lessee and Lessor agree Lessee shall be the owner of the Equipment for federal tax purposes and that during the Lease Term, Lessee shall have all the beneficial and equitable rights of ownership and the associated obligations and liabilities including but not limited to insurance, taxes, and maintenance associated with the Equipment. Lessee and Lessor further agree that Lessee shall be listed as "Owner" on the vehicle titles and shall be treated as the owner for all the purposes stated herein. It will not be necessary for Lessor to be listed as lienholder on vehicle titles. Upon the payment of all rent payable pursuant to Section 4.1 for the original term and all renewal terms, or exercise of the option to purchase as specified herein, Lessor shall immediately transfer title to any Equipment so purchased to Lessee, and Lessor's interest in such Equipment shall terminate. Following a non-appropriation of funds by Lessee or an event of default by the Lessee under any Lease, the Lessee will, at the Lessee's expense, execute and deliver such additional instruments, certificates or documents, and will take all such actions as the Lessor may reasonably request for the purposes of implementing or effectuating the provisions of such Lease with respect to title in the Equipment vesting in Lessor or for the purpose of more fully completing, perfecting, continuing, preserving or renewing the rights of the Lessor with respect to the Equipment. Section 3. That a new Section 1.4 is hereby added to the Agreement to read in full as follows: 1.4 Title to Leased Motor Vehicles. Notwithstanding the provision in Section 1.2 of the Agreement that the titles of the motor vehicles leased by the Lessee under the.Agreement will list the Lessee as the owner, the Lessee and Lessor acknowledge that naked legal title of each such motor vehicle shall remain in the Lessor unless and until the Lessee exercises its option to purchase the motor vehicles in accordance with Article V of the Agreement. To further clarify that this is the intent of the Parties, the Lessee agrees to promptly deposit with First National Wealth Management, a division of First National Bank of Omaha, the "Escrow Ageni" identified in Exhibit "D" ("Escrow Agent"), the original of all of the State of Colorado motor vehicle certificates of title now in the Lessee's possession for the motor vehicles leased under the Agreement and all original certificates of title the Lessee receives in the future for motor vehicles it hereafter leases under the Agreement. Lessor and Lessee shall also enter into an escrow agreement with the Escrow Agent which shall instruct the Escrow Agent to safely keep and maintain all of the motor vehicle certificates of title delivered into its possession. The escrow agreement shall also provide the following: (1) in the event the Lessee notifies the Lessor under Section 3.3 of the Agreement of a non- appropriation by the Lessee's City Council of funds needed for any or all of the motor vehicles leased under the Agreement, that the Escrow Agent shall have the Lessee's power-of-attorney to execute on behalf of the Lessee the assignments of title for each of the certificates of title of the motor vehicles leased hereunder for which funds have not been so appropriated; or (2) in the event that the Lessee has exercised its option to purchase any or all of the motor vehicles leased under the Agreement, the Escrow Agent shall return the original certificates of title for those motor vehicles to the Lessee and the Lessee's original power of attorney for each such motor vehicle. Lessee agrees to be responsible for all costs incurred with the Escrow Agent with respect to the escrow agreement. Section 4. That except as expressly amended in this Amendment, the Parties agree that all of the other terms, conditions and provisions of the Agreement shall remain unchanged and in full force and effect. IN WITNESS WHEREOF, this Amendment has been executed by the Parties as of the date and year first stated above. PINNACLE PUBLIC FINANCE, INC. By: Cathy Jimenez, Managing Director/SVP ATTEST: (Corporate Seal) THE CITY OF FORT COLLINS, COLORADO By: Gerry Paul Director of Purchasing & Risk Management ATTEST: Lessee: Wanda Nelson, City Clerk APPROVED AS TO FORM: John R. Duval Senior Assistant City Attorney