R2006-062 05-08-06 RESOLUTION NO. R2006-62
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF PEARLAND,
TEXAS, AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO
EXECUTE A MASTER LEASE/PURCHASE AGREEMENT WITH BANK OF
AMERICA FOR THE PURCHASE OF A FIRE TRUCK, TWO MINI-
EXCAVATORS AND TWO TRAILERS.
BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF PEARLAND, TEXAS:
Section 1. That the City opened bids for lease/purchase financing of certain
capital equipment, and such bids have been reviewed and tabulated.
Section 2. That the City Council hereby awards the bid to Bank of America, to
finance $500,000.00 at a fixed rate of 3.91% for a three (3) year term.
Section 3. The City Manager or his designee is hereby authorized to execute a
Master Lease/Purchase Agreement for the purchase of a fire truck, two mini excavators
and two trailers.
PASSED, APPROVED and ADOPTED this the 8th day of May, A.D., 2006.
c:= O/2
TOM REID
MAYOR
ATTEST:
UN I , RMC
TY CRE RY
APPROVED AS TO FORM:
D RIN M. COKER
CITY ATTORNEY
APR 26 2006 15:33 FR BANK OF AMERICA 415 765 7322 TO 93430537
P.01i06
Bankof Ameri 41(1.4.'1°.°«
Jason Eshler
Leasing Specialist Banc of America Leasing&Capital,LW
555 California Street,4m Floor
San Francisco,CA 94104
Tel 415.765.7438
Fax 415.765.7322
April 21,2006-Devised fasan.esftlarebankofamarica corn
City of Pearland
City Hall,Suite 202
3519 Liberty Drive
Pearland,TX 77581
Master Lease/Purchase Financing for Equipment
Attn: Gordon Island
Purchasing officer:
Banc of America Leasing&Capital,LLC("Lessor")is pleased to submit our lease financing proposal
(the"Proposed Transaction")described in the attached Summary of Terms and Conditions(the"Term Sheet)
and relevant bid documents,including references and our Template Texas Lease and Escrow documentation.
Please review and contact me at(415)765-7436 if you have any questions.
This proposal letter and the Term Sheet include only a brief description of the principal terms of the Proposed
Transaction. Please understand that this proposal is not a commitment or offer to lease,and does not create any
obligation for Lessor. Lessor will not be responsible or liable for any damages,consequential or otherwise,that
may be incurred or alleged by any person or entity,including Lessee, as a result of this proposal letter. Lessor
will notify you in writing of its decision if Lessor agrees to proceed with the Proposed Transaction after
completing its review and analysis.
To accept this proposal,please sign the enclosed copy of this letter and return it,by no later than May 25,2006,
to:
Time of America Leasing&Capital,LLC
Attn: Jason Eshler
555 California Street 4th Floor
San Francisco,CA 94104
We appreciate this opportunity to present Bank of America.
Very truly yours,
BANC OF RICA LEASING
By: ason Eshler
Titl Leasing Specialist
APR 26 2006 15:33 FR BANK OF AMERICA 415 765 7322 TO 93430537 P.02/06
EXHIBIT
Master Lease/Purchase Financing for Equipment a
The undersigned,by its authorized representative below,accepts the above proposal,agrees to furnish Lessor,its
successors and assigns,any information relating to the business or financial condition of Lessee or its affiliates,
and authorizes Lessor,Bank of America,NA.and their affiliates to disclose to,discuss with and distribute such
information (and any information they may already have) to any other affiliates or proposed assignees or
successors of Lessor.
City of Pearland,Texas
Name:
Title:
Signature:
Date:
Please provide Federal ID No.:
•
Insurance Information: •
•
Carrier: •
•
Contact:
Telephone No.
Banc of America Leasing&Capital.LLC
Page 2 of 6
APR 26 2006 15:33 FR BANK OF AMERICA 415 765 7322 TO 93430537 P.03/06
SUMMARY OF TERMS AND CONDITIONS
Date: April 21,2006-Revised •
1 ssee: City of Pearland,Texas
yee$sor: Banc of America Leasing&Capital,LLC or its designee("Lessor")
Equipment: Description of Equipment; Various Equipment, mutually acceptable to Lessor and
Lessee(individually"Unit"and collectively"Equipment").
Maximum
P.urchaseYrice: The lower of$500,000 and the fair market value of the Equipment, which may with
Lessor's prior consent include soft costs such as freight, installation and taxes paid
up-front by Lessor not to exceed a percentage of the Maximum Purchase Price
approved by Lessor. The fair market value of the Equipment is subject to verification
by an independent third party appraiser. •
Lease
Structure: This Lease is a lease intended as security transaction;all tax benefits will remain
with Lessee;the lease will be a net finannial lease,and all expenses,including(but
not limited to)insurance,maintenance,and taxes,will be for the account of Lessee.
• The lease will be subject to non appropriation and Texas State law.
Term: Lease Term: 3 years from funding.
Tax Exempt
Interest Rates:
$ Rate Calculation
3-Year: 3.91 FIXED 3 YR T*0.65 plus 0.751%spread
Payments Semi-Annual in Arrears.See sample amortization schedule attached.
The above indicative interest rates will be held until June 9,2006.
Index: The index and fixed interest rate calculation will be set in conjunction with the 3-Year
U.S.Treasury Bond Obligations,which were 4.86%(3 YR T)as of April 18,2006.
If funding occurs after.the rate-lock expires the interest rate will be indexed and
be fixed at funding according to the respective formulas above. The R15 U.S.
Treasury Rate can found at httu://w w.federalreserve.aov/releases/h15/Current
cane of America Leasing&Capital,LLC
Page 3 of 6
APR 26 2006 15:34 FR BANK OF AMERICA 415 765 7322 TO 93430537
• P.04i06
End of
7Cer_rt>LQ.tztion; At the expiration of the Lease Term,Lessee will purchase all(but not less than all) the
Equipment for$1.00("Purchase Price").
Early Termination: Lessee may on any rental payment date,upon 30 days notice,prepay in full all amounts
then outstanding under the Lease,including accrued interest,principal balance,and any
other unpaid charges.
Expenses: Lessee and Lessor will each be responsible for its own expenses incurred in
connection with the preparation,negotiation and closing of the lease documentation.
Governmental
Entity Lease: The Base Rent installments are calculated on the assumptions, and Lessee will
represent, that Lessee is a state or political subdivision of a state within the meaning
of Section I03(c) of the Internal Revenue Code (the "Code"), that this transaction
will constitute an obligation of Lessee within the meaning of Section 103(a) of the
Code,notwithstanding Section 103(b)of the Code. Lessee shall provide Lessor with
such evidence as Lessor may request to substantiate and maintain such tax status.
Lessee will indemnify Lessor, on an after-tax basis, against any loss of Federal
income tax exemption of the interest portion of the rentals and against any penalties
and interest imposed by the Internal Revenue Service on Lessor in connection
therewith on a lump-sum basis.
Reimbursement: If Lessee intends to be reimbursed for any equipment cost associated with this
lease, intent for reimbursement from the proceeds of this lease must be
evidenced,and must qualify under the Treasury Regulation Section 1.150-2.
Lease Documents: Lease documents in form and substance satisfactory to Lessor and its local counsel
must be executed and delivered. If Lessor requests, Lessee will also furnish duly
executed landlord and mortgagee waivers and supporting information. Lessee will
also provide board resolutions, incumbency certificates and other documentation
required by Lessor.
Opinion of
Counsel; Lessee's counsel shall deliver an opinion to Lessor at closing in form and substance
satisfactory to Lessor concerning the due authorization, execution, delivery, and
enforceability of the lease.
•
Assignment by Lessor: The Lessor shall be entitled to assign its right, title and interest in the Lease and
leased equipment on a private placement basis to qualified purchasers. In addition,
Lessor shall be entitled to assign its right, title and interest in the Lease to a trustee for
the purpose of issuing certificates of participation or other forms of certificates
evidencing an undivided interest in such Lease, provided such certificates are sold
only on a private placement basis (and not pursuant to any "public offering") to a
purchaser(s) who represent that (I) such purchaser has sufficient knowledge and
experience in financial end business matters to be able to evaluate the risks and merits
of the investment(ii)such purchaser understands neither the Lease or certificates will
Bane of America Leasing&Capital,LLC
Page 4 of 6
ARR.26 2006 15:34 FR BANK OF AMERICA 415 765 7322 TO 93430537 P.05/06
be registered under the Securities Act of 1933, (iii) such purchaser is either an
"accredited investor"within the meaning of Regulation t)under the Securities Act of
1933,or a qualified institutional buyer within the meaning of Rule 144A,and(iv)that
it is the intention of such purchaser to acquire such certificates (A)for investment for
its own account or(B)for resale in a transaction exempt from registration under the
Securities Act of 1933.
Escrow
Account: If Lessee so desires, subject to compliance with applicable regulations under the
Internal Revenue Code, including, but not limited to arbitrage regulations, the
proceeds of the Lease may be deposited in an escrow acceptable to Lessor, and
disbursements made therefrom to pay for Equipment upon the execution and delivery
of an acceptance certificate (and related documents) by Lessee and approved by
Lessor. There is no Fee for escrow services.
Credit Due
pilience: In order to complete its credit due diligence,Lessor will require Lessee to provide:
Three years of most recent financial statements;
Most recent fiscal year budget;
- Insurance Certificate.
•
There are no origination or underwriting fees associated with this proposal.
aanc of America',casing&Capiwl,LLC
Page 5 of 6
Hr< 2E, 2006 15:34 FR BANK OF AMER I CA 415 765 7322 TO 93430537
P.06i06
BankAmerica Leasing & Capital Group
MUNI Equivalent
Amortization Schedule
debt
service interest debt
Date number 3.91% principal service balance
5/2006 0 $ - $ - $ - $ 500,000.00
11/2006 '1 $ 9,775.05 $ 79,352.38 $ 89,127.42 $ 420,647.62
5/2007 2 $ 8,223.70 $ 80,903,72 $ 89,127.42 $ 339,743.90
11/2007 3 $ 6,642.03 $ $2,485.40 $ 89,127.42 $ 257,258.50
5/2008 4 $ 5,029.43 $ 84,098.00 $ 89,127.42 $ 173,160.51
11/2008 5 $ 3,385.30 $ 85,742,12 $ 89,127.42 $ 87,418.39
5/2009 6 $ 1,709.04 $ 87,418.39 $ 89,127.42 $ •
-
TOTAL $34,764.55 $500,000.00 $534,764.55
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Banc of America Leasing&Capital,LLC
Page 6 of 6
** TrITAI PAi;F