TITLE
Recommendation to authorize City Manager to execute an equipment lease-purchase agreement and related financing documents with Banc of America Public Capital Corporation (BAPCC), a Kansas Corporation, for the financing of the Advanced Metering Infrastructure (AMI) project, in an amount not to exceed $18,500,000, plus interest and fees, payable over a 15-year period. (Citywide)
DISCUSSION
City Council approval is requested to authorize the City Manager to finance the project costs for the Long Beach Gas and Oil Department (LBGO) Advanced Metering Infrastructure (AMI) project through an equipment lease-purchase agreement with BAPCC. Lease financing provides a cost-effective approach to facilitate the purchase of essential capital assets to meet immediate service demands.
On June 10, 2014, the City Council authorized the City Manager to execute contracts and amendments with Sensus USA, Inc., Harris Utilities, Utility Partners of America and Utiliworks Consulting, to deliver and install an AMI system, to initiate the financing process with the City Attorney and City Treasurer, and to return to City Council for financing approval.
On December 23, 2014, the City Treasurer’s Office polled the 17 financial firms in the City’s investment banking pool, to solicit financing proposals utilizing tax exempt bonds, commercial paper, a revolving line of credit, or lease-purchase financing for the AMI project. On January 15, 2015, the City received six proposals. Of those six proposals, five firms offered to underwrite bonds, and one firm offered to execute an equipment lease-purchase agreement. A selection committee, comprised of the City Treasurer, Debt Manager, LBGO Financial Services Officer, and the City’s financial advisor, reviewed the proposals and evaluated each firm. The selection committee determined that BAPCC submitted the best financing terms, based on their ability to execute the financing and cost structure most advantageous to the City.
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