R2011-136 AUTHORIZING THE CITY MANAGER TO ENTER INTO AN AGREEMENT

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FINANCIAL MANAGEMENT DEPARTMENT #2011-28 DATE: August 24, 2011 TO: Honorable Mayor Michael T McElroy and City Council FROM: Ryan P. McCrady, City Manager Ron E. Neufeld, Finance Director SUBJECT: Lease Purchase New Fire Truck SUMMARY RECOMMENDATION: It is recommended that the City Council approve the attached resolution, which authorizes the City Manager to enter into a 7-year lease purchase with Busey Bank, to pay for the new fire truck that is being purchased by the Fire Department. BACKGROUND: The Fire Department is purchasing a new Pierce Velocity 100' Platform Fire Truck from Global Emergency Products for a prepaid amount of $947,850. Because the City of Decatur does not have enough funds in the Equipment Replacement Fund to pay for the truck, it will be necessary to do a lease purchase to provide the necessary financing. In addition to a proposal received from Oshkosh Capital, we solicited proposals from Busey Bank, Hickory Point Bank, PNC Bank, Regions Bank and Soy Capital Bank. We asked each bank to submit terms and conditions for a 5-year, 7-year and 10-year lease purchase. In addition to the proposal from Oshkosh, we got proposals from Busey Bank, Hickory Point Bank, PNC Bank and Regions Bank. Soy Capital Bank did not submit a proposal. We reviewed all the proposals and felt that the 7-year lease purchase was the best for the City. A recap of all the proposals is attached. Busey Bank proposed the lowest interest rate on the 7-year lease purchase at 2.37%with annual payments of$148,544.28 and total payoff of$1,039,809.28. We had asked that all the proposals be structured, so that the first payment would be made on September 1, 2012. We recommend that we enter into a 7-year lease purchase of the fire truck with Busey Bank. POTENTIAL OBJECTION: There are no known objections to this resolution. INPUT FROM OTHER SOURCES: None STAFF REFERENCES: Ron Neufeld, Finance Director-424-2702