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Legislation #: 150394 Introduction Date: 5/21/2015
Type: Ordinance Effective Date: none
Sponsor: None
Title: Authorizing the Director of Finance to accept the proposal of Oshkosh Capital or an affiliate or other designee thereof for financing the acquisition of fire fleet vehicles and equipment under one or more lease-purchase agreements at an estimated purchase price of $36,675,538.00 and a not-to-exceed purchase price of $37,000,000.00; authorizing the execution of any and all documents and agreements necessary for the financing; estimating and appropriating revenues in the amount of $37,000,000.00 in Fund No. 3230, the Equipment Lease Capital Acquisition Fund; designating requisitioning authority; authorizing the Director of Finance to close project accounts; declaring the intent of the City to reimburse itself from the lease purchase proceeds for certain expenditures; and recognizing an accelerated effective date.

Legislation History
DateMinutesDescription
5/20/2015 Filed by the Clerk's office
5/21/2015 Referred to Finance, Governance & Ethics Committee
5/27/2015 Advance and Do Pass, Debate
5/28/2015 Passed

View Attachments
FileTypeSizeDescription
150394.pdf Authenticated 340K Authenticated
master lease fire 2015 fact sheet v3 - final.pdf Fact Sheet 76K Fact Sheet
150394 Accounting Forms.pdf Other 24K 150394 Accounting

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ORDINANCE NO. 150394

 

Authorizing the Director of Finance to accept the proposal of Oshkosh Capital or an affiliate or other designee thereof for financing the acquisition of fire fleet vehicles and equipment under one or more lease-purchase agreements at an estimated purchase price of $36,675,538.00 and a not-to-exceed purchase price of $37,000,000.00; authorizing the execution of any and all documents and agreements necessary for the financing; estimating and appropriating revenues in the amount of $37,000,000.00 in Fund No. 3230, the Equipment Lease Capital Acquisition Fund; designating requisitioning authority; authorizing the Director of Finance to close project accounts; declaring the intent of the City to reimburse itself from the lease purchase proceeds for certain expenditures; and recognizing an accelerated effective date.

 

WHEREAS, the City of Kansas City, Missouri (the “City”) is a constitutional charter city, municipal corporation and political subdivision of the State of Missouri (the “State”) and is duly organized and existing pursuant to the Constitution and laws of the State; and

WHEREAS, pursuant to applicable law, the governing body of the City (“Governing Body”) is authorized to acquire, dispose of and encumber real and personal property, including, without limitation, rights and interest in property, leases and easements necessary to the functions or operations of the City; and

WHEREAS, the Fire Department of the City needs to acquire new fleet vehicles and equipment to properly perform its fire service duties, at an estimated purchase price of $36,675,538.00 and a not-to-exceed purchase price of $37,000,000.00 (the “Project”); and

WHEREAS, the Fire Department will procure and accept the fire fleet vehicles and equipment; and

WHEREAS, in preparation for such procurement, the Fire Department reviewed presentations from three fire apparatus manufacturers and subsequently received and evaluated their written responses to an extensive questionnaire regarding apparatus build, specification, maintenance and serviceability, and company longevity and solvency before selection of the manufacturer and financing structure; and

WHEREAS, the cost of the acquisition and implementation of the Project is expected to be financed under one or more lease-purchase agreements and related schedules and documents (each, a “Lease”) with Oshkosh Capital or an affiliate or other designee thereof (“Oshkosh”) as Lessor thereunder; and

WHEREAS, the fire fleet vehicles and equipment are expected to be ordered from Pierce Manufacturing, Inc. (“Pierce”) or other provider in Fiscal Year 2016 and to be received and purchased under Leases commencing in Fiscal Year 2017; and

WHEREAS, the payment of scheduled debt service payments on a Lease for the financing of pumpers and certain equipment is estimated to be paid over a successive seven-year (7) period and for the financing of rear-mount aerial platforms (RMAPs), rescues and tillers and certain equipment is estimated to be paid over a successive ten-year (10) period, depending on the applicable useful life of the vehicle or equipment, from legally available funds, commencing in Fiscal Year 2017; and

WHEREAS, it is not expected that any fire fleet vehicle financed under a Lease will have been paid in full at the end of the applicable Lease term, instead, the form of Lease includes an end-of-lease term rider setting out three options available to the City at the end of the lease term, as follows: (1) the City may pay a balloon rent payment, (2) the City may turn in the fire fleet vehicle to Pierce and agree to acquire a new fire fleet vehicle from Pierce or Pierce’s designated dealer, or (3) the City may refinance the balloon rent payment, subject to further approval as applicable by the governing body of the City prior to the exercise of such option; and

WHEREAS, the Governing Body hereby finds and determines that the execution of one or more Leases in the principal amount not exceeding the amount stated above for the purpose of acquiring the fire fleet vehicles and equipment to be described in the Leases is appropriate and necessary to the functions and operations of the City; NOW THEREFORE,

BE IT ORDAINED BY THE COUNCIL OF KANSAS CITY:

 

Section 1. That the Director of Finance is authorized to accept the proposal of Oshkosh for financing the Project under one or more Leases in substantially the form of the Lease made available for inspection by the Council at the time this ordinance is passed, with such changes therein as shall be approved by the Director of Finance.

Section 2. That the Director of Finance is authorized to execute, deliver and file in the name of the City, each Lease relating to the Project and any and all documents and agreements necessary to complete such transactions, including, without limitation and when appropriate, escrow trust agreements, lease schedules of property and certificates and other documents related to Leases.

Section 3. That the City will, and the officials and agents of the City, including but not limited to the Director of Finance and the Fire Chief, are hereby authorized and directed to, take such actions, expend such funds and execute such other documents, certificates and instruments as may be necessary or desirable to carry out and comply with the intent of this ordinance and to carry out, comply with and perform the duties of the City with respect to the Project and the Leases and the other documents authorized or approved hereby.

Section 4. That the aggregate principal amount of the Leases shall not exceed $37,000,000.00 and shall bear interest as set forth in the Leases and the Leases shall contain such options to purchase by the City as set forth therein.

Section 5. That the City’s obligations under the Leases shall be subject to annual appropriation or renewal by the Governing Body as set forth in each Lease and the City’s obligations under the Leases shall not constitute general obligations of the City or indebtedness under the Constitution or laws of the State.

Section 6. That the initial term plus extensions thereof for Oshkosh to be engaged to provide financing to the City for fire fleet vehicles and equipment as Lessor under Leases will not exceed 10 years (7 years for pumpers), subject to earlier termination or to extension thereof by the City; provided that any Lease entered during any such term shall remain in force and effect in accordance with its terms.

Section 7. That the City approves Kutak Rock LLP to serve as Lease Counsel for the City in connection with the Leases and financing of the Project thereunder.

Section 8. That the revenue in the following account of Fund No. 3230, the Equipment Lease Capital Acquisition Fund, is hereby estimated in the following amount:

AL-3230-120000-583000 Lease Proceeds $37,000,000.00

 

Section 9. That the sum of $37,000,000.00 is hereby appropriated from the Unappropriated Fund Balance of Fund No. 3230, the Equipment Lease Capital Acquisition Fund to the following account:

AL-3230-237701-E-23FLTEQ16 Fire Fleet $37,000,000.00

 

Section 10. That the Chief of the Fire Department is hereby designated as requisitioning authority for Account No. AL-3230-237701-E-23FLTEQ16.

Section 11. That the Director of Finance is hereby authorized to close project accounts upon project completion and return the unspent portion of the appropriation to the Fund Balance from which it came.

Section 12. That this ordinance is recognized as an ordinance with an accelerated effective date as provided by Section 503(a)(3)(C) of the City Charter in that it appropriates money, and shall take effect in accordance with that section.

Section 13. That the City hereby declares its official intent to reimburse itself for certain expenditures made within sixty (60) days prior to or on and after the date of this ordinance with respect to the Project with the proceeds expected to be drawn under the Leases. The maximum principal of lease proceeds amount for the Project expected to be financed under the Leases is $37,000,000.00. This constitutes a declaration of official intent under Treasury Regulation Section 1.150-2.

____________________________________________


I hereby certify that there is a balance, otherwise unencumbered, to the credit of the appropriation to which the foregoing expenditure is to be charged, and a cash balance, otherwise unencumbered, in the treasury, to the credit of the fund from which payment is to be made, each sufficient to meet the obligation hereby incurred.

 

 

___________________________________

Randall J. Landes

Director of Finance

 

Approved as to form and legality:

 

 

___________________________________

Alan Holtkamp

Assistant City Attorney