TITLE
Recommendation to authorize City Manager to execute a lease-purchase agreement and related financing documents with Banc of America Public Capital Corp for the financing of personal computers, computer-related equipment, and servers in an amount not to exceed $939,000 including interest and fees, payable over a four-year period. (Citywide)
DISCUSSION
City Council approval is being requested to authorize the City Manager to finance the lease/purchase through Banc of America Public Capital Corporation’s Master Lease Agreement approved by City Council on May 10, 2011.
In March 2011, Financial Management conducted a Request for Proposal (RFP) RFP FM11-031 for a master lease agreement program that provides lease financing for multiple purchases in order to streamline the purchasing and financing process and take advantage of reduced interest rates offered by financial institutions in the purchasing of eligible assets. Banc of America Public Capital was selected.
Lease financing provides a cost-effective alternative to facilitate the purchase of essential capital assets to meet immediate service demands when funding is not available for an outright purchase.
In 1997, the Technology Services Department (TSD) implemented a plan to replace all City-owned personal computers (PCs) after three years of use. The three-year replacement cycle was designed to refresh the technology to take advantage of the latest innovations and to reduce the ongoing support costs associated with the maintenance of older equipment and software. Lease financing of the replacement program allows the City to maintain level annual expenditures and departments are able to spread the acquisition cost over the term of the financing, rather than budgeting large one-time capital outlay expenditures.
In 2003, to reduce PC-related expenditures, the City extended the PC replacement cycle from three to four years to reflect the industry standard. Leading information technology industry expert...
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