HomeMy WebLinkAboutItem UAGENDA REPORT
/y
DATE:
December 10, 2001
TO:
Honorable Mayor and City Council
THRU:
John B. Bahorski, City Manager
FROM:
June Yotsuya, Assistant to City Manager
SUBJECT: AMENDMENT TO LEASE PURCHASE AGREEMENT
WITH MUNICIPAL FINANCING CORPORATION FOR THE
PURCHASE OF HVAC EQUIPMENT AND MAINTENANCE
SERVICES TO BE PROVIDED BY CAL -AIR, INC.
SUMMARY OF REQUEST:
Staff recommends that the City Council approve an amendment to the lease purchase agreement with
Municipal Finance Corporation to include costs for additional HVAC equipment and maintenance
services to be provided by Cal -Air, Inc. that will amount to an additional $18,670.00 per year over a
twelve -year period.
In April 2001, the City Council held a public hearing and approved a resolution approving energy
conservation measures. As part of these measures, the City entered into a contract with Cal -Air, Inc. to
replace deteriorated HVAC equipment in all City facilities, to reduce electrical power usage through the
installation of energy efficient equipment and to provide yearly maintenance service. As part of this
program, the City purchased the equipment through a lease purchase program with Municipal Finance
Corporation. The original financing package included a twelve -year term at the current market rate of
5.3 %.
Since April 2001, the City purchased the Old City Hall located at 201 Eighth Street and is now
responsible for the facility maintenance of the building. The HVAC units on the building are in failing
condition and staff has received frequent calls for service. The units are quite old and do not operate
under energy efficient standards of more modern equipment. In addition, staff has been working with the
Police Department to resolve several HVAC deficiencies in their facility arising from the addition and
relocation of computer and communication equipment in the building.
FISCAL IMPACT:
City Staff and Cal -Air, Inc. have evaluated and assessed the critical needs for both facilities. Equipment
costs to resolve the HVAC deficiencies total approximately $165,000. To reduce the financial impact,
Agenda Item ()
December 10, 2001
City Council Agenda Report — HVAC EQUIPMENT PURCHASE
Page 2
staff recommends that, if approved, the City Council authorize staff to amend the lease purchase program
with Municipal Finance Corporation to include the additional cost for equipment and maintenance. This
will result in an expenditure of $18,670 per year over a twelve -year period. Staff anticipates that there
will be additional energy savings to the City through the installation of new energy efficient equipment
that will offset the cost of purchase. However, at this time staff cannot provide information regarding the
actual savings to the City.
The total proposed budget amendment for the first year additional costs to the lease purchase program will
be $18,670. The current undesignated fund balance is $3,078,272. The proposed budget amendment will
decrease the undesignated fund balance by $18,670 to $3,059,602.
RECOMMENDATION:
Staff recommends the City Council authorize staff to amend the lease purchase program with Municipal
Finance Corporation to incorporate the cost of additional HVAC equipment for old City Hall and the
Police Department at an additional rate of $18,670 for a twelve -year period.
June Yotsuya, Assistant to City Manager
iiiii
MUNICIPAL FINANCE CORPORATION
23945 Calabasas Road, Suite 103
Calabasas, CA 91302
Telephone (818) 224 -4787
Telecopier(818) 224 -4789
www.munifinmce.com
January 4, 2002
CITY OF SEAL BEACH
211 Eighth Street
Seal Beach, CA 90740
Attn: Joanne M. Yea, City Clerk
Re: Lease with Option to Purchase #01 -026 -AF
dated May 29, 2001 ("Lease") as amended 1/4/02
Dear Ms. Yet:
Pursuant to your request enclosed is one original of the Amended and Restated
Lease Schedule dated January 4, 2002.
Please call if you have any questions regarding the enclosed.
Very truly yours,
4D,,ie'M. Ma
Manager of Administration
Cc: Pamela Arends -King, Dir. Administrative Services
J®
December 21, 2001
Mr. Bill Morton
Municipal Finance Corporation
23945 Calabasas Road, Suite 103
Calabasas, California 91302
Dear Mr. Morton,
Forwarded are two (2) copies of the Amended and Restated
Lease Schedule #01- 026 -AF as of December 28`", 2001 pursuant
to the Lease with Option to Purchase dated May 29, 2001.
This matter relates to the City's equipment supplier, CAL -
AIR, INC. This matter Amended Lease Schedule was approved
by the Seal Beach City Council at their regular meeting of
December 10", 2001 as is evidenced by Resolution Number
4968 also forwarded.
Upon finalization of this Lease, please return one (1) copy
to the City of Seal Beach to my attention. Thank you.
Very truly yours,
Joanne M. Yeo, City Clerk
City of Seal Beach
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FOR YOUR CONVENIENCE
We are sending the enclosed information without a cover
letter. Should you need additional information, or have
any questions, please feel free to call.
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MUNICIPAL FINANCE CORPORATION
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LEASE SCHEDULE #01 -026 -AF
AMENDED AND RESTATED AS OF DECEMBER 28, 2001
This Schedule is issued pursuant to the Lease with Option to Purchase
dated as of May 29, 2001 by and between the undersigned.
A. Property Location: See Property Description /Location List
which is incorporated herein by
reference
B. Property Description: See Property Description /Location List
which is incorporated herein by
reference
C. Name and Address of Supplier:
CAL -AIR, INC.
12393 Slauson Avenue
Whittier, CA 90606
D. Financing Amount Summary:
Original Financing Amount: $ 907,177.19 funded on June 29, 2001
Additional Financing Amount: 164.970.00 funded on December 28, 2001
Total Financing Amount: $1,072,147.19
E. Lease Term. The term of this Schedule is for a period of one
hundred forty -eight (148) months commencing on the Lease Issuance Date
and concluding one hundred forty -eight (148) months thereafter.
F. Rental Payments. The Rental Payments for this Schedule are due in
forty -nine (49) consecutive payments in accordance with the Payment
Schedule herein. The first payment is due four (4) months from the
Lease Issuance Date and is paid from capitalized interest. Each
payment includes interest at the rate of 5.30% per annum on the unpaid
principal balance based upon an initial principal equal to the
Financing Amount shown in Section D.
Payment Schedule: Payable quarterly in arrears #01- 026 -AF
2
1/29/02
24,809.95
1,086,613.00
12,036.95
12,773.00
3
4/29/02
26,242.90
1,074,111.65
12,196.44
14,046.46
4
7/29/02
26,242.90
1,061,444.65
12,358.04
13,884.86
5
10/29/02
26,242.90
1,048,609.82
12,521.79
13,721.11
6
1/29/03
27,594.15
1,034,219.90
14,038.95
13,555.20
7
4/29/03
27,594.15
1,019,639.30
14,224.97
13,369.18
8
7/29/03
27,594.15
1,004,865.52
14,413.45
13,180.70
9
10/29/03
27,594.15
989,895.97
14,604.43
12,989.72
10
1/29/04
28,467.40
973,833.01
15,671.18
12,796.22
11
4/29/04
28,467.40
957,557.21
15,878.83
12,588.57
12
7/29/04
28,467.40
941,065.76
16,089.22
12,378.18
13
10/29/04
28,467.40
924,355.80
16,302.40
12,165.00
14
1/29/05
29,380.15
906,488.86
17,431.16
11,948.99
15
4/29/05
29,380.15
888,385.19
17,662.12
11,718.03
16
7/29/05
29,380.15
870,041.64
17,896.15
11,484.00
17
10/29/05
29,380.15
851,455.04
18,133.27
11,246.88
18
1/29/06
30,334.15
831,644.31
19,327.54
11,006.61
19
4/29/06
30,334.15
811,571.09
19,583.63
10,750.52
20
7/29/06
30,334.15
791,231.90
19,843.11
10,491.04
21
10/29/06
30,334.15
770,623.22
20,106.03
10,228.12
22
1/29/07
29,972.90
750,111.75
20,011.19
9,961.71
23
4/29/07
29,972.90
729,328.51
20,276.33
9,696.57
24
7/29/07
29,972.90
708,269.90
20,544.99
9,427.91
25
10/29/07
29,972.90
686,932.25
20,817.22
9,155.68
26
1/29/08
30,565.15
664,704.82
21,685.29
8,879.86
27
4/29/08
30,565.15
642,182.89
21,972.62
8,592.53
28
7/29/08
30,565.15
619,362.53
22,263.76
8,301.39
29
10/29/08
30,565.15
596,239.80
22,558.76
8,006.39
30
1/29/09
31,178.65
572,181.87
23,471.16
7,707.49
31
4/29/09
31,178.65
547,805.16
23,782.15
7,396.50
32
7/29/09
31,178.65
523,105.46
24,097.27
7,081.38
33
10/29/09
31,178.65
498,078.49
24,416.56
6,762.09
34
1/29/10
32,248.65
471,623.16
25,810.07
6,438.58
35
4/29/10
32,248.65
444,817.30
26,152.06
6,096.59
36
7/29/10
32,248.65
417,656.27
26,498.57
5,750.08
37
10/29/10
32,248.65
390,135.35
26,849.68
5,398.97
38
1/29/11
33,368.15
361,102.28
28,324.94
5,043.21
39
4/29/11
33,368.15
331,684.54
28,700.24
4,667.91
40
7/29/11
33,368.15
301,877.00
29,080.52
4,287.63
41
10/29/11
33,368.15
271,674.52
29,465.84
3,902.31
42
1/29/12
34,539.90
239,870.81
31,028.01
3,511.89
43
4/29/12
34,539.90
207,645.70
31,439.13
3,100.77
44
7/29/12
34,539.90
174,993.61
31,855.70
2,684.20
45
10/29/12
34,539.90
141,908.87
32,277.79
2,262.11
46
1/29/13
35,765.90
107,129.12
33,931.47
1,834.43
47
4/29/13
35,765.90
71,888.53
34,381.06
1,384.84
48
7/29/13
35,765.90
36,181.00
34,836.61
929.29
49
10/29/13
35,765.90
0.00
35,298.54
467.36
x
G.
Payment Schedule: Payable quarterly in arrears #01- 026 -AF
(1) Refer to the paragraph in the Lease entitled "Release of Liens"
(2) Refer to the paragraph in the Lease entitled "Purchase Option and
"Release of Liens." Purchase options are in addition to the rental
payment due on the same day.
Approved and agreed to:
CITY NATIONAL BANK
(assignee of lessor)
By:
Date
CITY OF SEAL BEACH
(1 ssee)
By:
o ne
Title: f or
Date: O
z
Certificate
AUTHORIZATION TO DISBURSE AND CERTIFICATION
OF VALUE RECEIVED #01- 026 -AF
Pursuant to the terms of that certain Lease with Option to Purchase
#01- 026 -AF dated May 29, 2001, between MUNICIPAL FINANCE CORPORATION
( "Corporation ") as lessor and CITY OF SEAL BEACH ( "Lessee ") as lessee,
the undersigned
hereby
authorizes
Corporation
(or the
Assignee)
to
disburse $
to
Cal -Air, Inc.
(the
"Supplier ")
in
consideration of partial completion of the leased Property. Attached
herewith is the approved Supplier invoice in support of this request.
Upon making this disbursement, Corporation (or the Assignee) will have
advanced the aggregate sum of $ in Lease Proceeds.
CITY OF SEAL BEACH
(lessee)
By
Title
Date
APPROVED BY CORPORATION
By
Title
Date
a
Certificate #
AUTHORIZATION TO DISBURSE AND CERTIFICATION
OF VALUE RECEIVED 401- 026 -AF
Pursuant to the terms of that certain Lease with Option to Purchase
#01- 026 -AF dated May 29, 2001, between MUNICIPAL FINANCE CORPORATION
( "Corporation ") as lessor and CITY OF SEAL BEACH ( "Lessee ") as lessee,
the undersigned hereby authorizes Corporation (or the Assignee) to
disburse $ to Cal -Air, Inc. (the "Supplier ") in
consideration of partial completion of the leased Property. Attached
herewith is the approved Supplier invoice in support of this request.
Upon making this disbursement, Corporation (or the Assignee) will have
advanced the aggregate sum of $ in Lease Proceeds.
CITY OF SEAL BEACH
(lessee)
By
Title
Date
APPROVED BY CORPORATION
By
Title
Date
...7%
Certificate
AUTHORIZATION TO DISBURSE AND CERTIFICATION
OF VALUE RECEIVED #01- 026 -AF
Pursuant to the terms of that certain Lease with Option to Purchase
#01- 026 -AF dated May 29, 2001, between MUNICIPAL FINANCE CORPORATION
(- "Corporation ") as lessor and CITY OF SEAL BEACH ( "Lessee ") as lessee,
the undersigned hereby authorizes Corporation (or the Assignee) to
disburse $ to Cal -Air, Inc. (the "Supplier ") in
consideration of partial completion of the leased Property. Attached
herewith is the approved Supplier invoice in support of this request.
Upon making this disbursement, Corporation (or the Assignee) will have
advanced the aggregate sum of $ in Lease Proceeds.
CITY OF SEAL BEACH
(lessee)
By
Title
Date
APPROVED BY CORPORATION
By
Title
Date
Certificate
AUTHORIZATION TO DISBURSE AND CERTIFICATION
OF VALUE RECEIVED #01- 026 -AF
Pursuant to the terms of that certain Lease with Option to Purchase
#01- 026 -AF dated May 29, 2001, between MUNICIPAL FINANCE CORPORATION
( "Corporation ") as lessor and CITY OF SEAL BEACH ( "Lessee ") as lessee,
the undersigned hereby authorizes Corporation (or the Assignee) to
disburse $ to Cal -Air, Inc. (the "Supplier ") in
consideration of partial completion of the leased Property. Attached
herewith is the approved Supplier invoice in support of this request.
Upon making this disbursement, Corporation (or the Assignee) will have
advanced the aggregate sum of $ in Lease Proceeds.
CITY OF SEAL BEACH
(lessee)
By
Title
Date
APPROVED BY CORPORATION
By
Title
Date