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
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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)
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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)
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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