Title
Consider a resolution authorizing the Mayor to execute a Master Lease-Purchase Agreement with JP Morgan Chase Bank, N.A. to lease-purchase vehicles and heavy equipment.
Body
Each year the City acquires a portion of its heavy equipment and vehicles through a tax-exempt leasing program. The current year's total for the program is $2,250,000, financed at an effective interest rate of 1.325%, with a five year amortization. The first year repayment is included in the 2016/17 operating budget. The financing arrangement is done through a competitive bidding process, with JP Morgan Chase Bank providing the lowest cost financing this year.
This lease includes vehicles and equipment for all General Fund departments that were acquired during the current fiscal year. The equipment was included as planned lease financing purchases in the adopted 2015/16 budget.
Tax-exempt lease purchase financing is a techniques that allows for the City to purchase equipment and make periodic lease payments over the useful life of the asset. Lease payments are made out of the debt portion of the property tax rate.
Source of Funds:
General Debt Service Fund through the debt portion of the property tax rate
Recommended Action
Staff recommends approval.