R2015-56 AGREEMENT WITH PNC EQUIPMENT

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FINANCIAL MANAGEMENT DEPARTMENT #2015-07 DATE: April 30, 2015 TO: Honorable Mayor McElroy and City Council Members FROM: Tim Gleason, City Manager Gregg Zientara, City Treasurer& Director of Finance SUBJECT: Resolution Authorizing the City Manager to Enter into an Agreement with PNC Equipment Finance to Lease Purchase Ten (10) 2015 Ford Police Interceptor Mid Size Utility Vehicles and accessory equipment packages SUMMARY RECOMMENDATION: On January 20, 2015, Council approved Council Resolution R2015-01, accepting the bid from Jackson Ford, Inc. and authorizing the City to proceed with the acquisition of Ten (10) 2015 Ford Police Interceptor Mid Size Utility Vehicles. City Administration recommends City Council approval of the attached Resolution authorizing the City Manager to enter into a lease purchase financing arrangement with PNC Equipment Finance, a subsidiary of PNC Bank, to finance the acquisition of the vehicles replacing obsolete police patrol vehicles with terms as follows: Vehicles Quantity Purchase Price Financing Terms Interest Rate Police Vehicles 10 $ 274,082.00 24 months 1.278% Accessory package(s) 13,417.00 24 months 1.278% Total $ 287,499.00 City Administration recommends the financing arrangement as the desirable acquisition method due to the combination of limited current cash resources available for equipment replacement and the low cost of financing available in today's financing market. BACKGROUND: Requests for financing proposals were sent to several financing institutions. The lowest price proposal was submitted by PNC Equipment Finance of, a unit of PNC Bank. PNC proposal included interest rate pricing of 1.278% for 24 month term, for a total cost of $291,998. The second lowest proposal was from Busey Bank with interest rate pricing of 2.00% for 24 month term, for a total cost of $294,362, therefore, $2,364 higher than the total cost under the PNC proposal. Page 1 of 2