Loading...
Item 4FCITY OF SOUTHLAI,E MEMORANDUM May 25, 2010 TO: Shana Yelverton, City Manager FROM: Robert Finn, Chief of Police SUBJECT: Authorize a lease agreement for mobile and portable radios from Motorola Inc. (or its assignee) in an amount not to exceed $337,207 Action Requested: Recommendation to City Council to authorize the City Manager to execute a lease agreement for the purchase of 67 portable and 4 mobile radios for the Department of Public Safety and 18 portable and 3 mobile radios for Public Works in an amount not to exceed $337,207. Background Information: There is Federal mandate known as Project 25 (P-25) which requires all governmental entities to utilize radios on a digital spectrum. Full compliance is due prior to January 1, 2016. NETCO, our radio system, is planning to have full compliance prior to January 1, 2014. The purchase of these radios will ensure that all radios in DPS and Public Works are compliant with P-25 requirements. Motorola is currently running a special which will allow us to trade-in our existing non -compliant radios and replace all the radios at one time. Prior to this offer we had planned to phase in compliant radios over the next 5 years in DPS and 3 years in Public Works. Executing this lease will save the City $4,687 after factoring interest expenses associated with the lease agreement. Additionally we will be spared the added expense of any price increases in the radios over our original plan for replacement. Motorola is the selected vendor on the HGAC Cooperative Purchasing list for FY 2010. Financial Considerations: DPS and Public Works have included the annual lease amounts of $55,495.27 and $19,910.20 in their respective budgets for FY2011. There is a non - appropriation clause allowing us out of the lease if the Shana Yelverton Approval of Radio Purchase Page 2 of 2 proposed budget is not adopted. The first payment is due one year after the lease agreement is executed. Financial Impact: $55,495.27 annually for five years in the CCPD budget and $19,910.20 for the next three years in the Public Works budget. Citizen Input/ Board Review: There has been no citizen input. The Crime Control and Prevention District approved the five year plan for the replacement of radios during the FY 2010 budget process. Legal Review: There has been no legal review of this purchase. Alternatives: Alternatives may include the following: • Council authorizing the purchase of the radios as submitted. • Council rejecting the request to authorize the execution of the lease agreement and we continue with the original plan to purchase over the next several years. Supporting Documents: Supporting documents include the following items: • Motorola HGAC Pricing Summary • Financing proposal for Public Safety • Financing proposal for Public Works Staff Recommendation: Staff recommendation to City Council is to authorize the City Manager to execute the lease agreement for the purchase of the portable and mobile radios for the Department of Public Safety and Public Works in an amount not to exceed $337, 207. 4F -2 r". v,eity of Southlake- k Safety P25 Radio Mlig ration HGAC Pricing Summary P25 RADIO MIGRATION HGAC PRICING HGAC Pricing Summary Public Safety Portables P25 Digital (67) XTS-5000 Portables $261,291.96 Public Safety Mobiles (4) XTL-5000 Mobile $17,221.20 TOTAL HGAC $278,513.16 June Trade In Promotion -$35,500 (must purchase by June) - ---------a.�ip NUM, to On �U F W m - �ggj p �j 0111 . .... E";N41 "I'Mall" SHN - � � IR� M ImWUMHMM TM P J 4?0 0!!U."! Use or disclosure of this proposal is subject to the restrictions on the title page. fiffOrOMOLA Motorola Confidential Proprietary C ly 4't of Southtak- e-, blic Works P25 Radio A"tion HGAC Pricing Summary P25 RADIO MIGRATION HGAC PRICING HGAC Pricing Summary Public Works P25 Digital (18) XTS-2500 Portables & (3) XTL-2500 Mobiles $63,381.10 June Trade In Promotion -$8,400 (must purchase by June) i tH 1 N I 777H-MP N51 --M 1 Wg,H. i'MR L Use or disclosure of this proposal is subject to the restrictions on the title page. AfOrOROLA Motorola Confidential Proprietary 0 A fC0TOROLA Date: May 25. 2010 Financing proposal for: Southlake Public Safety Communications System Financing Proposal Motorola Credit CorporaUcn is pleased 10 submit the following proposal for the financing of your Motorola equipment in accordance with the terms and conditions outlined bOcw: Transaction Type: Municipal Lease -Purchase Agreement Lessor: Motorola, Inc. (or its Assignee) Lessee: Southlake Public Safety Amount: $243,013.16 Dawn Payment: $0,00 Balance to Finance: $243,013.16 Equipment: As perthe Motorola equipment proposal. Title: Tills to the equipment will vest with the Lessee. Insurance: Lessee will be responsible to insure the equipment as outlined in the lease contract. Taxes: Personal properly, sales, leasing, use, stamp, or other taxes are forthe account of the Lessee. Option One option Two cation Three Lease Term: Three Years Five Years Seven Years Payment Frequency: Annual Annual Annual Payment Structure: Arrears Arrears Arrears Lease Rate: 4.26% 4.59% 4.72% Lease Factor: 0.362128 0.228363 0.171070 Lease Payment: $88,001,90 $55,495.27 $41,572.33 Payment Commencement: First payment due First payment due First payment due one year after one year after one year after contract execution. contract execution. contract execution. Expiration: This above lease rates and factors are valid for all leases commenced by 6/3/2010 Qualifications: Receipt of a properly executed documentation package. Lessee qualifies as a political subdivision or agency of the Slate as defined in the Internal Revenue Code of 1986, The interest portion of the Lease Payments shall be excludable from the Lessor's gross income pursuant to Section 103 of the Internal Revenue Code. Receipt of a copy of the last years audited financial statements and current year's budget from the Lessee. This proposal should riot be construed as a commitment to finance. it is subject to final Motorola credit committee approval. This quote is based on the general level of interest rates, primarily U.S. Treasury Bills of like term maturity. Any movement in those rates in excess of 10 basis points will result in the revision of this quote. LESSEE CERTIFIES THAT IT HAS DESIGNATED THIS LEASE AS A QUALIFIED TAX-EXEMPT OBLIGATION IN ACCORDANCE WITH SECTION 255(bK3) OF THE CODE, THAT IT HAS NOT DESIGNATED MORE THAN $10.000,000 OF ITS OBLIGATIONS AS QUALIFIED TAX- EXEMPT OBLIGATIONS IN ACCORDANCE Documentation: Municipal Equipment Lease Purchase Agreement Opinion of Counsel Schedule A / Equipment List Schedule B ! Amortization Schedule 803BG UCC-1 Certificate of Incumbency Statement of Essential Use/Scurce of Funds Evidence of Insurance or Statement of Self Insurance Please feel free to contact me if there are any questions or if an allemate structuring is required. Regards, Bill Stancik Motorola Customer Financing 847-53a 4531 0 "ororvazA Date: May 25, 2010 Financing proposal for: Southlake Public Works Communications System Financing Proposal Motorola Credit Corporation is pleased to submit the following proposal for the financing ofyeur Motorola equipment in accordance with the terns and conditions outlined below: Transaction Type: Municipal Lease -Purchase Agreement Lessor: Motorola, Inc, (or its Assignee) Lessee: Southlake Public Works Amount: $54,981.10 Down Payment: $0.00 Balance to Finance: $54,981.10 Equipment: As perihe Motorola equipment proposal. Title: Title to the equipment will vest with the Lessee. Insurance: Lessee will be responsible to insure the equipment as outlined in the lease contract. Taxes: Personal property, sales, leasing, use, stamp, or other taxes are for the account of the Lessee. Option One Option Two Option Three Lease Term: Three Years Five Years Seven Years Payment Frequency: Annual Annual Annual Payment Structure: Arrears Arrears Arrears Lease Rate: 4.26% 4.59% 4.72% Lease Factor: 0.362126 0,228363 0.171070 Lease Payment: $19,910.20 $12,655.66 $9,406.63 Payment Commencement: First payment due First payment due First payment due one year after one year after one year after contract execution, contract execution. contract execution. Expiration: This above lease rates and factors are valid for all leases commenced by 6/3/2010 Qualifications: Receipt of a properly executed documentation package. Lessee qualifies as a political subdivision or agency of the State as defined in the Internal Revenue Code of 1986. The interest portion cf the Lease Payments shall be excludable from the Lessor's gross income pursuant to Section 103 of the Internal Revenue Code. Receipt of a copy of the last years audited financial statements and current year's budget from the Lessee. This proposal should not be construed as a commitment to finance. It is subject to final Motorola credit committee approval. This quote is based an the general level of interest rates,. primarily U.S. Treasury Bills of like term maturity. Any movement in those rates in excess of 10 basis points will result in the revision of this quote. LESSEE CERTIFIES THAT IT HAS DESIGNATED THIS LEASE AS A QUALIFIED TAX-EXEMPT OBLIGATION IN ACCORDANCE WITH SECTION 286(4)(3) OF THE CODE, THAT IT HAS NOT DESIGNATED MORE THAN $10,000,000 OF ITS OBLIGATIONS AS QUALIFIED TAX- EXEMPT OBLIGATIONS IN ACCORDANCE Documentation: Municipal Equipment Lease Purchase Agreement Opinion of Counsel Schedule A / Equipment List Schedule B / Amortization Schedule 8038GC UCC-1 Please feel free to contact me if there are any questions or if an alternate structuring is required. Regards, Bill Stancik Motorola Customer Financing 847538-4531