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HomeMy WebLinkAboutResolution No. 22-8111 - Auth Execution and Delivery of Master Equipment Lease Purchase Agreement and Approving Related Docs and Actions1 N • ILI] I Eel 0 1 ki [0111111�- WHEREAS, the City of Downey (the "City") desires to obtain a new fire truck and is proceeding to finance the acquisition of said fire truck and related items (the "Property") as referenced in the Master Lease Purchase Agreement (defined below); and WHEREAS, in order to finance the Property and related costs, the City has proposed to lease the •• from • First National Bank (the "Lessor") • to the terms • a Master Lease Purchase Agreement (the "Lease Purchase Agreement"), which includes the payment schedule attached thereto (the "Schedule"), each between the City, as lessee, and the Lessor;and WHEREAS, the City has the option to purchase the Property in accordance with the terms of the Lease Purchase Agreement; and WHEREAS, the City is authorized to enter into lease agreements for equipment pursuan*j to Sections 37350 and 37351 of the California Government Code; and WHEREAS, the City Council has obtained from the private lender, Community First National Bank, good faith estimates of (a) the true interest cost of the financing authorized by this Resolution, (b) the sum of all fees and charges paid to third parties with respect to the financing, (c) the amount of proceeds of the financing expected to be received, where proceeds means the value of the Property to be received, net of the fees and charges paid to third parties and any reserves or capitalized interest paid or funded with proceeds of the financing, and (d) the aggregate sum total of all rental payments (the "Rental Payments") made pursuant to the Lease Purchase Agreement calculated to the final term of the Lease Purchase Agreement, plus the fees and charges paid to third parties not paid with proceeds of the financing, and such estimates are disclosed and set forth in Exhibit A attached hereto; and •. • THE CITY COUNCIL • THE CITY • • DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Recitals. The foregoing recitals are true and correct and the City Council so •I and determines. Section 2. Authorized Officers. The City Manager, the Mayor, or either of their designee (each, an "Authorized Officer") are hereby each, acting alone, authorized and directed to execute and deliver the Lease Purchase Agreement, Schedule, and all related documents on behalf of the City (subject to making such changes to the Lease Purchase Agreement, Schedule, or any related documents as they deem necessary or appropriate). The Authorized Officers are further authorized and directed to consummate the transaction described herein, execute any documents or supplementary agreements necessary to secure possession, use, or ownership of the Property, and to approve any amendments necessary to carry out the provisions of this authorizing Resolution. RESOLUTION NO. 22-811'6- U'T"AGE 2 RM thereto deemed advisable by an Authorized Officer, whose execution thereof shall be conclusive evidence of such approval. Master Lease Purchase Agreement between the City, as lessee, and the Lessor, whereby the City leases and/or purchases the Property to be financed under the terms thereof, and whereby the Lessor agrees to lease the Property to the City in consideration of the payment by the City of the Rental Payments; provided that (i) the total principal amount financed under the Lease Purchase Agreement shall not exceed $1,900,000.00, (ii) the term of the Lease Purchase Agreement shall not exceed six (6) years, and (iii) the interest rate shall not exceed 5.00%. Payment Schedule to Lease Purchase Agreement between the City, as lessee, a the Lessor, whereby the Rental Payment dates and amounts due under the Lea Purchase Agreement are set forth for the Property. I An Authorized Officer is authorized and directed for and in the name and on behalf of the City to execute and attest the final form of each of the foregoing documents. The documents are hereby approved, subject to the adjustment by an Authorized Officer but not excess of the above limitations as to the lease term, interest rate, and total principal amount financed for the Property. Section 4. Official Actions. The Authorized Officers are each authorized and directed in the name and on behalf of the City to make, execute, and deliver any and all assignments, certificates, requisitions, agreements, notices, consents, leases, tax certificates, IRS Form 8038- G, designations relating to bank qualification under Section 265(b)(3)(B) of the Internal Revenue Code of 1986, escrow agreements, and other instruments of conveyance, warrants, and other documents (which may also be subject to approval as to form by the City Attorney), which they or W"WW1 fUh VA"Wo Wa 11 Section 5. Effective Date. This Resolution shall take effect from and immediately after the date of its passage and adoption. APPROVED AND ADOPTED this 25 th day of October, 2022, BLANCA-PACHECO Mayor RESOLUTION NO. 22-8111 PAGE 3 I HEREBY CERTIFY that the foregoing Resolution was adopted by the City Council • the City of Downey at a Regular meeting held on the 25 th day of October, 2022 by the following vote, to wit: AYES: • Members: • La Plante, • • Pacheco NOES-, Council Members: None. ABSENT: Council Members: Alvarez ABSTAIN: Council Members: None. PAGE 4 this Resolution. Such good faith estimates have been provi�led to the City, b;sed on market interest rates prevailing at the time of preparation of the Estimated Principal Amount, by Community First National Bank, the private lender (the "Lender"). W1111.11.Virm I!,11,111ii le IN �ftft-UlWerft ruarKesrmlllurI5, its guUU falul U511mate (if Irle te prlrlGlpdl UUMPUrlerlt UT Irl Rental Payments paid under the Lease Purchase Agreement is $1,851,095.00 (the "Estimated Principal Amount"). True Interest Cost. The Lender has informed the City that its good faith estimate of the true interest cost of the financing, which means the rate necessary to discount the amounts payable on the respective Rental Payment dates to the principal components of said Rental Payments is 3.994%. Finance Charge. The Lender has informed the City that its good faith estimate of the finance charge for the financing, which means the sum of all fees and charges paid to third parties (or costs associated with the financing) (the "Finance Charge"), is $227,585.20. 6 UTsTsT=—s M 0 filing =*a- SUM �Lel IN Iwo L I i o- &I P01 le5ol-:es 111 Interest A�allq *1 1111 f the financing, is $1,851,095.00. Total Payment Amount. The Lender has informed the City that its good faith estimate of the total payment amount, which means the sum total of all Rental Payments made pursuant to the Lease Purchase Agreement, plus the Finance Charge as described above not paid with the proceeds of the financing, calculated to the final term of the Lease Purchase Agreement, is $2,078,680.20. The foregoing estimates constitute good faith estimates only. The actual aggregate sum of principal components of the Rental Payments, the true interest cost thereof, the Finance Charge, the amount of proceeds received from the financing, and the total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of financing being different from the date assumed for purposes of such estimates, (b) the actual aggregate sum of the principal components of the Rental Payments being different from the Estimated Principal Amount, (c) the actual amortization of the Rental Payments being different than the amortization assumed for the purposes of such estimates, (d) the actual market interest rates at the time of financing differ from those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the City's financing plan, or a combination of such factors. The actual date of the financing and the actual aggregate sum of the principal components of the Rental Payments will be determined by the City based on market conditions and other factors. The actual interest rate may depend on market interest rates at the time of financing. The actual amortization of the Rental Payments may also depend, in part, on market interest rates at the time of financing. Market interest rates are affected by economic and other factors beyond the control of the City.