TITLE
Recommendation to authorize City Manager to execute a multi-year master lease agreement and all related documents with Banc of America Public Capital Corporation. (Citywide)
DISCUSSION
Authorization is requested to enter into a Multi-Year Master Lease Agreement with Banc of America Public Capital Corporation in order to streamline the financing and acquisition of eligible assets. Currently, the City prepares Requests for Proposals (RFP) as each department or entity of the City requests lease financing for equipment, software or other eligible assets. The process requires the preparation of an RFP for each asset, and sometimes multiple approvals of the original purchase and financing. This process is inefficient not only because it requires significant staff resources, but also because separate, and therefore smaller, lease transactions receive less or no market attention and less advantageous pricing. Using a Master Lease Agreement, City purchases that are lease finances such as computers, software systems, and higher cost equipment purchases such as fire trucks, could be handled more efficiently and at lower cost.
Under a Master Lease Agreement, the City could enter into multiple individual lease agreements whose terms will be governed by the Master Lease Agreement. The individual leases will range in terms from two years to ten years, depending on the life of the asset. Pricing can occur up to five business days before funding is needed, thereby providing flexibility for pricing new financing requirements. The pricing formula provides for a fixed interest rate spread over the U.S. Treasury curve of like terms, adjusted to a tax-exempt rate.
The Master Lease Agreement will improve the implementation of future City Council approved leasing activities, provide more flexibility in pricing, and streamline the internal administrative burden for leases, especially those less than $1,000,000. Each purchase and resultant individual lease executed usin...
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