HomeMy WebLinkAboutResolution No 19-2019 - 2019 Vehicle and Equipment Lease FinancingRESOLUTION NO. 19-2019
A RESOLUTION OF THE BOARD OF PUBLIC WORKS FOR THE CITY OF SOUTH
BEND, INDIANA, APPROVING THE TAX-EXEMPT LEASE PURCHASE FINANCING
PROPOSAL OF KEY GOVERNMENT FINANCE, INC.
WHEREAS, the City of South Bend (the "City"), a political subdivision of the state of
Indiana, is authorized by law to acquire and own interests in real and personal property; and
WHEREAS, the City of South Bend Board of Public Works (the "Board"), on behalf of
the City, has the authority under the laws of the state of Indiana to purchase, acquire, and lease
property; and
WHEREAS, the Board has determined that a need exists for the acquisition and financing
of certain property for the benefit of the City's operations; and
WHEREAS, in order to acquire such property, the Board desires to enter into the necessary
agreement(s) and/or lease schedule(s) as are determined appropriate to consummate the tax-
exempt financing offered by Key Government Finance, Inc. (the "Lessor") under its proposal dated
May 17, 2019 (the "Proposal"), attached hereto as Exhibit A.
NOW, THEREFORE, BE IT RESOLVED by the City of South Bend Board of Public
Works as follows:
The terms of the Lessor's Proposal are hereby approved.
2. The Board hereby authorizes Daniel Parker, in his capacity as City Controller of
the City of South Bend, Indiana, or his designee, to act on behalf of the Board to formalize the
terms of the financing, as they are substantially presented in the Proposal, and to execute any
documents necessary to effect the same.
3. This Resolution shall be in full force and effect after its adoption by the City of
South Bend Board of Public Works.
[Signature page follows.]
ADOPTED at a meeting of the Board of Public Works of the City of South Bend, Indiana,
held on May 28, 2019, at 1308 County -City Building, 227 West Jefferson Boulevard, South Bend,
Indiana 46601.
CITY OF SOUTH BEND
BOARD OF PUBLIC WORKS
Gary Gilot, President
Therese Dorau, Member
irabeth Maradi.k. Member
Latu O' Su11rv'art, Member
Genevieve E. Miller, Member
ATTEST:
Li da M. Martin, 4(�rP
Exhibit A
OMN.
City of South Bend, Indiana
$1,475,985.00
Tax -Exempt Lease Purchase
Summary of Terms and Conditions
May 17, 2019
Lease Facility: A $1,475,985.00 (the "Property Cost") tax-exempt lease facility (the "Lease Facility")
will be made available to City of South Bend, Indiana, ("City") to provide tax-exempt
financing for the equipment under consideration.
Funding: $1,475,985.00
Tax Ownership: Lessee will be deemed the owner of the Property for income tax and bankruptcy
purposes.
Title: Lessee will hold Title to the Property,
Parties to the Transaction
Lessee: The City of South Bend, Indiana. ("Lessee" or "City")
Lessor: Key Government Finance, Inc. ("Lessor" or "KGF")
The Property
Property: Qualified Assets including but not limited to those outlined in the RFP.
Property Cost: The Property Cost is estimated at $1,475,985.00.
Thelease,
The Closing Date: On or before June 14, 2019.
Master Lease
Agreement: Lessor and Lessee will execute a Property Schedule evidencing this financing. A Master
Tax -Exempt Lease Purchase Agreement will not need to be signed, as a fully executed
original is on file. Escrow funding of Lease Proceeds is available. There is no additional
cost associated with the Escrow Account. All interest earned in the Escrow Account
will accrue to the benefit of the City.
FINANCING
Financing Quote: Amount Rate Payments Factor Pmts / Term Adv. / Arr.
Year
$1,475,985.00 2.28% $156,337.89 ! 10.61368% 2 5 Years Arrears
*See attached Lease Amortization Schedule
Key Government Finance Page 1 Confidential
Proposal Expiration: Lease Rates and Lease Payments quoted in this Proposal are based on KeyCorp's Cost
of Funds as of May 17, 2019. The rate quoted is valid until June 23, 2019, provided that
the City notifies KGF of their intent to award this bid to KGF no later than May 24,
2019. If Lease Closing occurs after June 23, 2019, the rate quoted and shall be subject
to adjustment three (3) days prior to closing based on any movement in KeyCorp's Cost
of Funds.
Prepayment The facility may be prepaid in whole, but not in part, prior to the Maturity Date,
without penalty.
Other Terms And Conditions
Net Lease: The Lease will be a triple net lease in that the Lessee will be responsible for (a) sales,
transfer, use and property taxes, and any other taxes, assessments, levies, fees and
charges of any governmental authority imposed against the Property or the Lease, with
the exception of Federal and state taxes on the net income of the Lessor and other
taxes, (b) maintenance and repair of the Property, (c) loss, damage or casualty to the
Property as described below, (d) insurance as described below, (e) removal of all liens
(other than permitted liens) against the Property, and (f) and all costs, fees, charges
and expenses related to any of the foregoing or otherwise relating to the installation,
use, possession, operation, maintenance, repair and return of the Property.
Use, Maintenance and
Repair of the Property: Lessee will, at its expense, maintain the Property in the same condition as on the
commencement of the Base Lease Term, subject only to normal wear and tear, and will
use the Property in compliance with all applicable laws.
Insurance: Lessee will insure the Property against risks of loss and destruction, physical damage,
including all-risk insurance, third party liability and environmental risks, and other
customary risks. Lessor shall be named as additional insured's on all liability policies
and Lessor will be named as loss payee, on all casualty policies.
Documentation and Closin
Lease
and Related
Documentation: All documents relating to the Facility shall be attorney prepared and in a form and
substance acceptable to the Lender and its legal counsel, including legal opinions
customary for transactions of this nature and an opinion of Borrowers counsel
confirming that the documents to which the Borrower is a party (a) have been duly
authorized by all requisite corporate action on the part of the Borrower, and have been
duly executed and delivered by Borrower, and (b) constitute the legal, valid and
binding obligations of the Borrower, enforceable against the Borrower in accordance
with their respective terms.
Transaction Costs: None
Proposal Expiration Date: May 24, 2019.
Confidentiality: This summary of terms and conditions is provided to Lessee with the understanding
that neither it nor its substance shall be disclosed to any third party, other than those
in a confidential relationship with Lessee such as legal counsel or accountants who
shall be bound by confidentiality or where disclosure is required by law.
Comments:
Alternative Lease Structures are available.
ITITITITITITITITITmmmmITITITITIT Key Government FinancePage 2 Confidential
Proposal Acceptance/Expiration
This proposal is issued in reliance upon the accuracy of all information presented by you to us and is contingent upon the
absence of any material adverse change in your condition, financial or otherwise, from the condition as it was represented
to us at the time of this proposal. This proposal is subject to our formal approval and the execution of documentation
acceptable to each of us. IT IS NOT A COMMITMENT BY US TO ENGAGE IN THIS TRANSACTION.
Key Government Finance ("KGF") is not acting as an advisor to you and does not owe a fiduciary duty pursuant to Section
15B of the Exchange Act to you with respect to the information and material contained in this communication; (b) KGF is
acting for its own interests; and (c) you should discuss any information and material contained in this communication with
any and all internal or external advisors and experts that you deem appropriate before acting on this information or
material.
Lessor notifies Lessee that pursuant to the requirements of the USA Patriot Act (Title III of Pub. L. 107-56, as amended and
supplemented) (the "Patriot Act"), that Lessor is required to obtain, verify and record all information that identifies Lessee,
which information includes the name and address of Lessee and other information that will allow Lessor to identify Lessee
in accordance with the Patriot Act.
Lessor acknowledges that, in connection with Lessee's compliance with any continuing disclosure undertakings (each, a
"Continuing Disclosure Agreement") entered into by Lessee pursuant to SEC Rule 15c2-12 promulgated pursuant to the
Securities and Exchange Act of 1934, as amended (the "Rule"), Lessee may be required to file with the Municipal Securities
Rulemaking Board's Electronic Municipal Market Access system, or its successor ("EMMA"), notice of its incurrence of its
obligations under this Agreement and notice of any accommodation, waiver, amendment, modification of terms or other
similar events reflecting financial difficulties in connection with this Agreement, in each case including a description of the
material terms thereof (each such notice, an "EMMA Notice"). Lessee shall not file or submit or permit the filing or
submission of any EMMA Notice that includes any of the following unredacted information regarding Lessor or the Escrow
Agent: physical or mailing addresses, account information, e-mail addresses, telephone numbers, fax numbers, tax
identification numbers, or titles or signatures of officers, employees or other signatories. Lessee acknowledges and agrees
that Lessor is not responsible in connection with any EMMA Notice relating to this Agreement for Lessee's compliance or
noncompliance (or any claims, losses or liabilities arising therefrom) with the Rule, any Continuing Disclosure Agreement
or any applicable securities laws, including but not limited to those relating to the Rule.
If the outlined foregoing proposal is satisfactory, reflects an arrangement that suits the need of your organization and you
would like Key to commence its due diligence process, please sign and return this proposal. The terms described in this
proposal expire on May 24, 2019 if we have not received an authorized signed copy on or before such date.
Thank you for allowing us the opportunity to present this Proposal. If you have any questions, please call Kevin Scott at
(216) 689-0209.
............................................... ..... ........ .......
Key Government Finance Page 3 Confidential
Very truly yours,
Key Government Finance, Inc.
"
Kevin P. Scott
Vice President
Midwest Region Manager
Key Government Finance, Inc.
127 Public Square, 7th Floor
Cleveland, Ohio 44114
Tel. (216) 689-0209
kevin.p.srrt. ttCa ".t;pm
APPROVED THIS _, DAY OF , 2019
City of South Bend, Indiana
By:
Print Name:
Title:
Key Government Finance Page 4 Confidential
Amortization Schedule
Date
Funding Payment
Interest
Principal
Balance
6/7/2019
$1,472,985.00
_.....................
11/1/2019
$156,337.89
$13,433.62
$142,904.27
$1,330,080.73
5/1/2020
$156,337.89
$15,162.92
$141,174.97
$1,188,905.77
11/1/2020
$156,337.89
$13,553.53
$142,784.36
$1,046,121.40
5/1/2021
$156,337.89
$11,925.78
$144,412.10
$901,709.30
11/1/2021
$156,337.89
$10,279.49
$146,058.40
$755,650.90
5/1/2022
$156,337.89
$8,614.42
$147,723.47
$607,927.43
11/1/2022
$156,337.89
$6,930.37
$149,407.52
$458,519.91
5/1/2023
$156,337.89
$5,227.13
$151,110.76
$307,409.15
11/1/2023
$156,337.89
$3,504.46
$152,833.42
$154,575.73
5/1/2024
$156,337.89
$1,762.16
$154,575.73
$0.00
$1,472,985.00 $1,563,378.89
$90,393.89
$1,472,985.00
Key Government Finance Page 5 Confidential
BOARD OF PUBLIC WORKS
AGENDA ITEM REVIEW REQUEST FORM
Date
Name
Mav 21. 2019
Daniel Parker
Department Admin & Finance
BPW Date May 28, 2019 Phone Extension 9882
WW rmuAuwuen,
. ....
..... - ....-------
.....fftq�lred
............ . ....
Prior to Submittal to Board
Legal
Elliot Anderson
Controller review is required for all Contracts $5,000.00 or more
Controller Z
and greater than one year in length per the City Purchasing
Policy
Purchasing E]
Check the A qriate Item Typ - Req
. ...... .... _yired for All Submissions
LJ Agreement
El ContractProposal El Addendum
0
Professional Services
F-1
Amendment
El
Bid Opening
El
Bid Award El Req. to Advertise El Title Sheet
El
Quote Opening
El
Quote Award
F-1 Chg Order No.
C/O & PCA No, F PCA
F-1 Ease./Encroach.
❑ Traffic Control ® Resolution
[:] Other: Equipment Lease
F-1 Claim
Financina
Required Information
Company or Vendor Name .. Key_gpvernment Finance, Inc.
New Vendor
El Yes Mk —Yes, A�pproved b —yP u rc, h a s'i"n g
M No
MBEANBE Contractor
E] MBE Completed E-Verify Form Attached El Yes
F] WBE El No
Project Name
2019 Vehicle and Eauioment Lease Financina #1
. .... .......... . . .............
Project Number
No.
Funding Source
__Qqpprtmental budgets
Account No.
Various
Amount
$1,472,985.00
Terms of Contract
Interest rate: 2.28%
Purpose/Description
Resolution approving lease financing for vehicles and equipment
and authorizing City Controller to finalize and execute documents
- - — - - --------------- -
in connection with samqj�JA72,985).
For Chanioe Orders Onlv
Amount of $
E] El increase se $
Decrea
Previous Amount
Current Percent of Change: %
New Amount
Total Percent of Change: %
Time Extension:
Dispersal After Approval
Copy
Original
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❑
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