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Home My WebLink About07/06/2010 19 City Telephone System Lease / Purchase Agreement with Key Government Finance, Inc.; Budget Ammend / Approp BUSINESS OF THE CITY COUNCIL III YAKIMA, WASHINGTON AGENDA STATEMENT Item No. q For Meeting of: -- 061451-30 ITEM TITLE: Legislation regarding the lease purchase of a new City telephone system: A. A Resolution approving and authorizing a new purchase lease for the City's telephone system pursuant to the Municipal Lease /Purchase Agreement with Key Government Finance Inc. B. An ordinance amending the 2010 Budget and making an appropriation in the 151 – Public Safety Communications Fund to purchase a telephone system SUBMITTED BY: Wayne Wantland, 911 Director /Communications Manager 575 -6048 Jon Lorberau, Treasury Services Officer, 575 -6024 t Cindy Epperson, Deputy Director of Accounting & Budgeting 6G 7 CONTACT PERSON: Wayne Wantland, 911 Director /Communications Manager 575 -6048 SUMMARY EXPLANATION: • The City's existing telephone system utilizes 1990's era equipment, which lacks modern features and the system has become prone to periodic failure. While limited upgrades have been done, there are approximately 200 units still reliant on old technology. Cerium Technologies in conjunction with the Communications Department has put together a system upgrade that not only addresses the current system's interdepartmental incompatibility issues, but also enhances our system with the new generation of telephone features and capabilities. Installation of this system will solve the instability issues of the City's existing system, adds enhanced voice mail services and auto - attendant features, and standardizes systems among the various City departments. Continued on next page Resolution X Ordinance X Other (Contract) Municipal Lease Purchase Agreement Mail to (name and address): Key Government Finance, Inc P.O. Box 1187 Englewood, CO FUNDING SOURCE: Capital , se in Public Safety Communications Fund - 151 APPROVED FOR SUBMITTAL: � - 1 City Manager STAFF RECOMMENDATION: A) Adopt Resolution; B) Read Ordinance by title only at the June 15, 2010 Council Meeting. Pass Ordinance after the second reading at the July 6, 2010 Council Meeting. BOARD /COMMISSION RECOMMENDATION: The Council Public Safety Committee was briefed on the need for this equipment at their May 19th meeting, and recommended that it be brought forward for consideration by the full Council. • COUNCIL ACTION: The enclosed Resolution, if approved by Council, authorizes a lease /purchase arrangement with Key Government Finance, Inc for the telephone system. Financing will be provided under this agreement as per the payment schedule /terms in the attached lease agreement. This is a three -year installment agreement to purchase equipment that has an estimated cost of $100,000 at an interest rate of 4.17 %. Monthly payments will be about $2,948 for an annual amount of $35,377. Three bids from Key Bank, US Bancorp and Avaya Leasing were reviewed and Key Bank offered the best balance of rate and term, although the US Bank offer was very close. This loan, if approved by Council, will close and be completed by July 31, 2010. The enclosed Ordinance to amend the 2010 budget is required to authorize the acceptance of funds from the financing lease and appropriates the full cost of the proposed telephone system. Note: This is a housekeeping transaction to complete the financing of the telephone system. The lease payment of approximately $35,377 a year can be paid within the current telephone budget (421 accounts) while leaving some ongoing money available for continued replacement of older telephone sets. As this technically represents a financing, accounting rules require that the full cost of the equipment (approximately $100,000) be appropriated in this year's budget even though the payments in 2010 will be approximately 1/6 of the 'total costs. The attached appropriation ordinance is balanced in the Public Safety Communications Fund, as the financing is considered a source of revenue, which is then being used to purchase the equipment. Appropriation for the monthly payments is already available in the current telephone budget. • Page 2 of 2 • ORDINANCE NO. 2010 - AN ORDINANCE amending the 2010 budget for the City of Yakima; and making an appropriation of $100,000 within the 151 Public Safety Communications Fund for expenditure during 2010 to provide for the lease purchase of a replacement telephone system. WHEREAS, the amount of $100,000 must be appropriated within the 151 — Public Safety Communications Fund for expenditure during 2010 to provide for the lease purchase of a replacement telephone system, and WHEREAS, at the time of the adoption of the 2010 budget it could not reasonably have been foreseen that the appropriation provided for by this ordinance would be required; and the City Council declares that an emergency exists of the type contemplated by RCW 35.33.091 and that it is in the best interests of the City to make the appropriation herein provided, now, therefore, BE IT ORDAINED BY THE CITY OF YAKIMA: Section 1: The amount of $100,000 is hereby appropriated from the Unappropriated Fund Balance in the 151 — Public Safety Communications Fund to the following accounts as a 2010 appropriation: Resources: •. Capital Lease Financing 151- 151 - 124 - 0000 - 39150 -CLF -- $100,000 Expenditures: Leased Equipment 151- 151 - 124 - 0000 - 59428 -660 -- $100,000 Section 2: This ordinance is one making an appropriation and shall take effect immediately upon its passage, approval and publication as provided by law and by the City Charter. PASSED BY THE CITY COUNCIL, signed and approved this 6 day of July, 2010. MICAH CAWLEY, MAYOR • ATTEST: CITY CLERK • First Reading: June 15,'2010 Publication Date: • Effective Date: • Cje 6 -15 -10 Telephone Capital Lease Approp Ord 10.doc 6/18/2010