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12/04/2012 17 Fire Apparatus Purchase and Financing with the Office of the State Treasurer BUSINESS OF THE CITY COUNCIL YAKIMA, WASHINGTON AGENDA STATEMENT Item No. 1 For Meeting of: December 4, 2012 ITEM TITLE: Legislation regarding the financing and purchase of one Fire Apparatus A) An ordinance authorizing the acquisition of one 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 resonably expects to reimburse expenditures for the purchase of the Fire Apparatus with the proceeds of the financing contract. SUBMITTED BY: Finance Department • CONTACT Cindy Epperson, 576 -6771 PERSON/TELEPHONE: SUMMARY EXPLANATION: As part of the 2013 Budget process, Council received a Strategic Initiative proposal for the acquisition and financing of one Fire Apparatus. The proposed financing identified was the Washington State Local Option Capital Asset Lending (LOCAL) program. Note: The City used this program to purchase two apparatus in 2011. The cost of the apparatus is estimated to be about $375,000 - -the ordinance includes an amount "not to exceed" $400,000. An estimate of annual debt service of $40,000 is included in the Fire Department 2013 budget. This Ordinance will authorize and direct staff to proceed with the acquisition of the fire apparatus as proposed and to enter into the suggested financing agreement with the Office of the State Treasurer. The 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 2013 Strategic Initiative presented to Council in the 2013 Preliminary Budget Summary, 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: Return to Finance for mailing to State Treaurer's Office with attachments Contract Term: 10 year Amount: Maximum of Expiration Date: $400,000 Insurance Required? No Funding Fire Capital Fund equipment; General s Phone: Source: Fund - debt service APPROVED FOR SUBMITTAL: 4 4 001 ,64 City Manager STAFF RECOMMENDATION: A) Pass Ordinance; B) Adopt Resolution BOARD /COMMISSION RECOMMENDATION: ATTACHMENTS: Click to download ❑ Ordinance for Fire Personal Property ❑ Resolution Fire Apparatus ❑ Fire Strateoic_Initiative ❑ Notice of Intent • ORDINANCE NO. 2012 - 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. 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 $400,000, 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 $400,000, 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 January 6, 2013. PASSED by the City Council of the City of Yakima, at a regular meeting thereof held this 4th day of December 2012. APPROVED' ATTEST: Micah Cawley, Mayor City Clerk • Ordinance No. Publication Date: Effective Date: RESOLUTION NO. R 2012 - A RESOLUTION authorizing and directing the Director of Finance and Budget to reimburse expenditures arising from the purchase of a fire apparatus with the proceeds of a financing 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 a 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 $ 400,000. ADOPTED BY THE CITY COUNCIL this 4th day of December, 2012. Approved. Micah Cawley, Mayor ATTEST: Sonya Claar -Tee, City Clerk • FIRE 2013 STRATEGIC INITIATIVE PURCHASE FIRE APPARATUS BUDGETED PROPOSAL A comprehensive plan for fire apparatus replacement has been developed and was presented to the Council Public Safety Committee in 2011. In 2011, 2 Fire apparatus were replaced in response to the plan and the condition of the rig, leaving 2 apparatus that have been in service for approximately 20 years. Fire command staff are proposing that 1 of these older vehicles be replaced. As capital reserves /replacement funding is not available for an outright purchase, the City can again use the Washington State Local Option Capital Asset Lending (LOCAL) lease /purchase program to take advantage of lower interest rates because of economies of scale the state program can generate. IMPACTS 1. Fiscal Impact - Apparatus is estimated to cost about $375,000: $40,000 annual debt service over a 10 -year term. 2. Proposed Funding Source - 10 -year lease /purchase with annual payments funded from 41110 General Fund 3. Public Impact - Implementation and maintenance of a realistic, agency - specific fire apparatus replacement plan: ➢ Enhances reliability /reduces out -of- service time ➢ Takes advantage of enhancements in passenger /user safety features ➢ Provides economy in the reduction of maintenance costs for aging fire apparatus 4. Personnel Impact - The new engine 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 engine as an old maintenance - intensive engine is replaced. 5. Required Changes in City Regulations or Policies - None. 6. Legal Constraints, if applicable - Ordinance to enter into a debt transaction. 7. Viable Alternatives - None. II! /E, �s : 4i, al F i. E t , Forms provided by the Office of the State Treasurer Notice of Intent State of Washington LOCAL(Local Option Capital Asset Lending) Local Government Information County: _Yakima_ Legal Name: _City of Yakima MCAG No.: _0857_ Contact Person: _Tara Lewis Title: Financial Services Manager_ Address: _129 N 2 "d Street, Yakima, WA_ Zip: _98901_ Phone: 509-576-6639 Fax: _509- 576 -6364_ E -mail: _tara.lewis @yakimawa.gov_ 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). _fire apparatus (fire engine) Total cost: $ 400,000_ Maximum amount to finance. $ 375,000_ - Finance term: _10 years_ Useful life: _12 years_ Desired financing date: _February 2013_ Purpose of property (Please be specific and include dept. of use) _The fire truck is essential to the public safety mission which includes 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: ❑ program proceeds or X 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 government. 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? ❑ Yes X No Is the Local government a party to significant litigation? X Yes ❑ No Is this a reimbursement? If yes, date funds spent 1/31/2013 anticipated_ We are not required to submit the Credit Form because Has local government received a bond rating in the last two years? X Yes ❑ No Bond rating(s): _AA -_ (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: Cindy Epperson Title: Director of Finance and Budget_ Signature: Date: Transaction No. Annex 2 to Authorizing Ordinance (Equipment) 4111 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 Agency Representative. The 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 II 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 Agency 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 B y By Designated Treasurer Representative Authorized Agency Representative By Authorized Agency Representative • Annex 3 to Authorizing Ordinance (Equipment) Certificate Designating Authorized Agency Representatives I, Sonya Claar -Tee, City Clerk of the City of Yakima (the "Local Agency "), hereby certify that, as of the date hereof, pursuant to Resolution No. 2012- /Ordinance No. 2012- , 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/ordinance, one of the three 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: Tony O'Rourke City Manager (signature) (name) - (title) Cindy Epperson_ _Director of Finance & Budget (signature) (name) (title) Tara Lewis_ Financial Services Manager_ (signature) (name) (title) • Dated this 4th day of December, 2012. City Clerk City of Yakima, WA SUBSCRIBED AND SWORN TO before me this 4th day of December, 2012. By NOTARY PUBLIC in and for the .State of Washington, residing at: Printed Name: My Commission Expires: •