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HomeMy WebLinkAbout01/18/2011 21 Financing and Purchase of Two Fire Apparatus • BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. .Yc 2-i For Meeting Of: January 18, 2011 ITEM TITLE: Legislation regarding the financing and purchase of two Fire Apparatus. A. An ordinance authorizing the acquisition of two Fire Apparatus and the execution of a related financing contract with the Office of the State Treasurer and other related documentation. B. A reimbursement resolution declaring that the City reasonably expects to reimburse expenditures for the purchase of two Fire Apparatus with the proceeds of the financing contract. SUBMITTED BY: Finance Department CONTACT PERSON/TELEPHONE: Tara Lewis — 576 -6639 SUMMARY EXPLANATION: As part of the 2011 Budget process, Council approved a Major Policy Proposal for the acquisition and financing of two Fire Apparatus. The proposed financing identified was the Washington State Local Option Capital Asset Lending (LOCAL) program. This Ordinance will authorize and direct staff to proceed with the acquisition of the two fire apparatus as proposed and to enter into the suggested financing agreement with the Office of the State Treasurer. The 111 reimbursement resolution will authorize the City to reimburse the fund used to purchase the fire apparatus including expenditures made prior to the financing completion with the financing proceeds. The Ordinance and the Reimbursement Resolution and other related documentation is in the format directed by the Office of the State Treasurer as prescribed by State Legal Counsel and may appear somewhat different than the format traditionally presented to Council. Documents attached include: Copy of the 2011 Policy Issue approved by Council, Notice of Intent (Annex 1), Financing Contract (Annex 2), Certificate Designating Authorized Agency Representatives (Annex 3) Resolution X Ordinance X Other (Specify) Contract X Mail to (name and address): Return to Finance for mailing to State Treasurer's Office with attachments Funding Source Fire Capital Fund APPROVAL FOR SUBMITTAL: �6 %" y Manager STAFF RECOMMENDATION: A) Pass Ordinance; B) Adopt Resolution. BOARD RECOMMENDATION: • COUNCIL ACTION: • •',� ""J .sue . r p ' :' Forms provided by the Office of the State Treasurer ORDINANCE NO. 2011 - AN ORDINANCE of the City of Yakima. Authorization for the acquisition of personal property and execution of a financing contract and related documentation relating to the acquisition of said PERSONAL PROPERTY. . 4110 WHEREAS, the City of Yakima (the "Local Agency ") has executed a Notice of Intent to the Office of State Treasurer, in the form attached hereto as Annex 1 (the "NOI "), in relation to the acquisition, of and the financing of the acquisition of the Property, as defined below, under the provisions of RCW ch 39.94; and WHEREAS, it is deemed necessary and advisable by the City Council of the Local Agency that the Local Agency acquire the equipment and /or personal property identified on Annex 1 attached hereto ( "Property "); and WHEREAS, it is deemed necessary and advisable by the City Council of the Local Agency that the Local Agency enter into a Local Agency Financing Contract with the Office of the State Treasurer, in the form attached hereto as Annex 2 (the "Local Agency Financing Contract "), in an amount not to exceed $600,000, plus related financing costs, in order to acquire the Property and finance the acquisition of the Property; WHEREAS, the Local Agency will undertake to acquire the Property on behalf of and as agent of the Washington Finance Officers Association (the "Corporation ") pursuant to the terms of the Local Agency Financing Contract, and in accordance with all applicable purchasing statutes and regulations applicable to the Local Agency; and WHEREAS, the Local Agency desires to appoint the individuals set forth in Annex 3 as the representatives of the Local Agency in connection with the acquisition of the Property and execution of the Local Agency Financing Contract (each an "Authorized Agency Representative "); NOW, THEREFORE, BE IT ORDAINED, by the City Council of the City of Yakima as follows: Section 1. The individuals holding the offices or positions set forth in Annex 3 are each hereby appointed as a representative of the Local Agency in connection with the acquisition of the Property and execution of the Local Agency Financing Contract and all other related documents. A minimum of one Authorized Agency Representatives shall be required to execute any one document in order for it to be considered duly executed on behalf of the Local Agency. Section 2. The form of the Local Agency Financing Contract attached hereto as Annex 2 is hereby approved and the Authorized Agency Representatives are hereby authorized and directed to execute and deliver the Local Agency Financing Contract, in an amount not to exceed $600,000, plus related financing costs, and in substantially the form attached hereto with such changes as may be approved by the Authorized Representatives for the acquisition of the Property and financing of the acquisition of the Property. Section 3. The Local Agency hereby authorizes the acquisition of the property as agent of the Corporation in accordance with the terms and . provisions of the Local Agency Financing Contract. Section 4. The Authorized Representatives are hereby authorized to execute and deliver to the Office of State Treasurer all other documents, agreements and certificates, and to take all other action, which they deem necessary or appropriate in connection with the financing of the Property, including, but not limited to, any amendment to the NOI and agreements relating to initial and ongoing disclosure in connection with the offering of securities related to the financing. Section 5. This ordinance shall become effective February 20, 2011. PASSED by the City Council of the City of Yakima, at a regular meeting thereof held this 18 day of January 2011. [SEAL] APPROVED: ATTEST: Micah Cawley, Mayor City Clerk 4110 Ordinance No.: - Publication Date: Effective Date: RESOLUTION NO. R 2011 - A RESOLUTION authorizing and directing the Finance Director to reimburse expenditures arising from the purchase of two fire apparatus with the proceeds of a fihancing contract to be entered into with the Office of the State Treasurer. Section 1. The City of Yakima (the "Local Agency ") reasonably expects to reimburse the expenditures described herein with the proceeds of a financing contract to be entered into by the Local Agency (the "Reimbursement Obligation "). Section 2. The expenditures with respect to which the Local Agency reasonably expects to be reimbursed from the proceeds of Reimbursement Obligations are for the purchase of two fire apparatus and any expenditure related thereto. Section 3. The expenditures with respect to which the Local Agency reasonably expects to be reimbursed from the proceeds of Reimbursement Obligations will be made from the Fire Capital Fund — equipment purchases for the Yakima Fire Department. Section 4. The maximum principal amount of Reimbursement Obligations expected to be issued for the property described in Section 2 is $ 600,000. ADOPTED BY THE CITY COUNCIL this 18 day of January, 2011. Approved: Micah Cawley, Mayor • ATTEST: Deborah Kloster, City Clerk • CITY OF / /iLq(4. 2011 MAJOR POLICY ISSUE FIRE / SUPPRESSION FIRE /PUMPER REPLACENIENT BUDGETED PROPOSAL A comprehensive plan for fire apparatus replacement has been developed in which staff recommends a Capital Replacement Levy to be put to voters such that the new levy would replace the expiring levy and not result in a tax increase. That plan cannot be pursued with the voters before November 2014. In the interim, a "bridge" proposal, presented here as a Major Policy Issue, is deemed necessary and prudent. Replace two fire apparatus. Four of the eight current fire apparatus have been in service for approximately 20 years, well beyond the recommended useful life. The risk inherent in depending upon such old equipment to bear the brunt of the City's fire and emergency response needs over this interim time period is deemed too great. This proposal mitigates that risk by replacing two of the apparatus in poorest condition with standard units to meet the urgent need. By specifying more modest apparatus and omitting the . tools and equipment typically ordered with new apparatus, two units can be purchased for $600,000. Although certain efficiencies are lost without specifying a "custom" unit, it is conceded that in this economic environment, the two apparatus will be welcomed enthusiastically to an aging fleet of equipment. The tuning of this purchase will take advantage of lower cost emission standards in advance of new regulations that will 'add 5% to the cost of each unit in the near future. IMPACTS a. Fiscal Impact $300,000 each for a total of $600,000 including taxes and fees. b. Proposed Funding Source — Fire Capital Fund. Ten year lease /purchase through the Washington State Local Option Capital Asset Lending (LOCAL) program. Annual debt service of $70,000 to be paid from existing revenue streams. Fruitvale Fire District property taxes redirected from the General Fund $30,000 Replacement charges from the EMS fund 40,000 Total annual revenue available for debt service $70,000 c: Public Impact — Dependable fire apparatus are necessary to protect the public from fire threats. This proposal does not include a tax or fee increase to the public. d. Personnel Impact — The new engines will provide safety and reliability to allow firefighters to provide all -risk emergency services to the citizens of Yakima. Preventative maintenance to all fire department apparatus will be enhanced by the new engines as old and maintenance - intensive engines are replaced. 411 e. Required Changes in City Regulations or Policies — None. Policy Issues • Fire —1 Notice of Intent _.. State of Washington LOCAL(Local Option Capital Asset Lending) . - ,:: _: 0 Local Government Information ' County: Yakima Legal Name: City of Yakima MCAG No.: _0857_ Contact Person: Tara Lewis Title: Financial Services Officer Address: 129 N 2 Street. Yakima. WA Zip: 98901 - -- Phone: 509 -576 -6639 Fax: 509 -576 -6364 E -mail: tlewisn.ci.vakima.wa.us Would you prefer to receive financing documents (check one): ❑ Already have financing documents . X MS Word 6.0 by e -mail ❑ 3.5" disk Word 97 by U.S. mail ❑ Hard copy by U.S. mail Property (Real Estate or Equipment) Property description (include quantity, if applicable): two fire apparatus (fire engines) Total cost: $600.000: Maximum, amount to finance: 5600,000. Finance term:. 10 years Useful life: 12 years Desired financing date: March 2011 . Purpose of property (Please be specific and include dept. of use): The two fire apparatus would replace two existing fire apparatus that are 23 and 20 years old. The fire trucks are essential to the public safety mission which include . extinguishing hostile fires and other emergency response services. • If real estate, the Real Estate Worksheet: ❑ Is attached ❑ Will be provided by (date) _ _ • If equipment, will the property purchase price be paid with: X program proceeds or ❑ general funds to be reimbursed . from program proceeds? . If general funds are to be used, include a copy of the local agency's reimbursement resolution with the financing documents. . • Security Pledge . ❑ Voted general obligation of local goverment.. X Non -voted general obligation of local government Other information Approximate population:_ _ (not required for cities and counties). • If any of the following apply, please provide a complete discussion on a separate page: X Yes ❑ No Does the local government use registered warrants, interfund loans or other cash flow borrowing? Interfund borrowing was used to fund LID projects. Equipment Rental fund holds the "receivable. ". -❑ Yes X No Is the local government a party to significant litigation? • • ❑ Yes X No Is this a reirbursement? If yes, date funds spent_ _ . We are not required to submit the Credit Fonn because _ — Has local government received a bond rating in the last two years? X Yes ❑ No Bond rating(s): A+ . (attach rating agency letter) . By executing this Notice of Intent, the local agency acknowledges, agrees to and accepts its designation and appointment as the agent of the nominal lessor in connection with the acquisition of the project. By executing this Notice of intent, the local agency further • acknowledges and agrees that certificate counsel and any other special counsel to the state in connection with the authorization, issuance and delivery of the certificates and the related financing documents shall not be acting, and shall not be deemed to act, as counsel to the local agency, nor shall any attorney- client relationship exist or be deemed to exist between such counsel and any participating local agency • in connection with such matters. Submitted by: . Rita DeBord Title: Finance Director . • Signatuf� -� Date: December 8. 2010 1 • • • • Transaction No. Annex 2 to Authorizing Ordinance (Equipment) • LOCAL AGENCY FINANCING'CONTRACT, SERIES 20_ (Equipment) This Local Agency Financing Contract, Series 20 (the "Agency Financing Contract ") is entered into by and between the state of Washington (the "State "), acting by and through the State Treasurer (the "State Treasurer "), and The City of Yakima, a City of the State (the "Local Agency "). RECITALS WHEREAS, certain State agencies (as defined in Appendix I hereto, "State Agencies ") are authorized to acquire real and - personal property used or needed by such State Agencies through Agency Financing Contracts entered into pursuant to Chapter 356, Laws of Washington, 1989, codified as Chapter 39.94 of the Revised Code of Washington (the "RCW "), as supplemented and amended (the "Act "); and WHEREAS, Chapter 291, Laws of Washington, 1998 supplemented and amended the Act to authorize the State to enter into Agency Financing Contracts on • behalf of certain local agencies (as described therein, "Local Agencies "), including the Local Agency, to finance the acquisition of real and personal property by such Local Agencies; and WHEREAS, the State Treasurer has established a consolidated program providing for the execution and delivery of certificates of participation in such Agency Financing Contracts, or in Master Financing Contracts with respect thereto, in series from time to time in order to provide financing or refinancing for the costs of acquisition of real and personal property by State Agencies and Local Agencies; and WHEREAS, simultaneously with the execution and delivery hereof, the State is entering into a Master Financing Contract, Series 20_, dated as of the Dated Date (the "Master Financing Contract ") with the Washington Finance Officers Association, -a nonprofit corporation duly organized and existing under and by virtue of the laws of the state of Washington (the "Corporation "), to provide financing for the costs of acquisition of certain items of personal property by certain State Agencies and Local Agencies, including the Local Agency, under the terms set forth therein; and WHEREAS, the State Treasurer and the Local Agency have determined that it is necessary and desirable to enter into this Agency Financing Contract to provide financing or refinancing for the costs of acquisition of certain items of personal property, described in Exhibit B hereto (the "Property"), by the Local Agency; and . WHEREAS, the State Finance Committee has authorized the execution and delivery of this Agency Financing Contract pursuant to Resolution No. 987 adopted on October 7, 2003; and WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and delivery of this Agency Financing Contract do exist, have happened and have been performed in regular and due time, form and manner as required by law, and the Parties hereto are now duly authorized to execute, deliver and perform their respective obligations under this Agency Financing Contract; NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein and for other valuable consideration, the Parties hereto mutually agree as follows: Section 1.1 Defined Terms. Capitalized terms used but not otherwise defined in this Agency Financing Contract shall have the respective meanings given such terms in Appendix I hereto... Section 1.2 Notice of Intent; Personal Property Certificate; Certificate Designating Authorized Local Aeency Representative. T'he Local Agency has delivered a Notice of Intent to the State Treasurer in the form of Exhibit A attached hereto and incorporated herein by this reference. In order to evidence its acceptance of the Property financed and acquired pursuant hereto, the Local Agency has executed and delivered herewith, or will execute and deliver within 60 days from the Dated Date to the State Treasurer, a Personal Property Certificate in the form of Exhibit B attached hereto and incorporated herein by this reference. The Local Agency has delivered a Certificate Designating Authorized Agency Representatives to the State Treasurer in the form of Exhibit C attached hereto and incorporated herein by this reference. Said Certificate is currently in force and has not been amended, withdrawn or superseded, and the signatures shown thereon are true and correct originals of the signatures of the persons who hold the titles shown opposite their names. The signature of any one of the individuals shown on said Certificate is sufficient to bind the Local Agency under this Agency Financing Contract with respect to any of the undertakings contemplated herein. The terms and provisions set forth in Appendix II hereto are incorporated herein and made a part hereof by this reference. Section 1.3 Installment Sale and Purchase of Property. The State hereby agrees to sell, assign and convey, and does hereby sell, assign and convey to the Local Agency, and the Local Agency hereby agrees to purchase, acquire and assume, and does hereby purchase, acquire and assume, from the State, all of the State's right, title and interest in and to the Property and all proceeds and profits thereof and therefrom, subject to the security interest created pursuant to Section 2.5 of Appendix H hereof, and the Local Agency agrees to pay in consideration thereof the Purchase Price therefor and interest thereon and the Additional Costs in accordance with Section 1.4 hereof, and all other amounts required to be paid by the Local Agency hereunder, all in accordance with the provisions of this Agency Financing Contract. Section 1.4 Aeency Installment Payments. In consideration of the sale of the Property and the covenants and agreements of the State in this Agency Financing Contract, the Local Agency hereby promises to pay to the State the following amounts at the following times: (a) On each Agency Installment Payment Date, the Agency Installment Payment set forth in Exhibit D hereto, consisting of a Principal Component and/or an Interest Component as set forth in such Exhibit; and (b) All Additional Costs incurred by the State in connection with the sale of the Property to the Local Agency, the execution and delivery of the Certificates, and the observance - and performance of the Series 20_ Agreements, within thirty (30) days following receipt of an invoice from the State with respect thereto which includes (i) a brief description of each such Additional Cost, (ii) the party to whom payment is due, (iii) the amount thereof, and (iv) such additional information as the.Local Agency may reasonably request. . Section 1.5 Term. The term of this Local Agency Financing Contract shall commence on the Dated Date and shall terminate on the date on which all amounts due hereunder shall have been paid or the payment thereof duly provided for pursuant to Section 4.3 of Appendix II hereof. • STATE OF WASHINGTON City of Yakima . • - • OFFICE OF THE STATE TREASURER as Local Agency • • By B • Designated Treasurer Representative Authorized Agency Representative By Authorized Agency Representative • • • • • • i • Annex 3 to Authorizing Ordinance (Equipment) • Certificate Designating Authorized Agency Representatives I, Michael Morales, Acting City Manager of the City of Yakima (the "Local Agency "), hereby certify that, as of the date hereof, pursuant to Ordinance No. , the following individuals are each an "Authorized Agency Representative," as indicated by the title appended to each signature, that the following individuals are duly authorized to execute and deliver the Local Agency Financing Agreement to which this Certificate is attached as Exhibit C, and all documentation in connection therewith, including but not limited to the Personal Property Certificate(s) attached thereto as Exhibit B, that the signatures set forth below are the true and genuine signatures of said Authorized Agency Representatives and that pursuant to such resolution, one of the two following signature(s) [is /are] required on each of the aforementioned documents in order to consider such documents executed on behalf of the Local Agency: Michael Morales Acting City Manager (signature) (name) (title) Rita DeBord Finance Director (signature) (name) (title) Dated this 18 day of January, 2011 ® Michael Morales, Acting City Manager City of Yakima • SUBSCRIBED AND SWORN TO before me this 18th day of January, 2011. By: NOTARY PUBLIC in and for the State of Washington, residing at: Printed Name: My Commission Expires: •