Title
Resolution Authorizing the Execution and Delivery of an Equipment Lease/Purchase Agreement, and Related Instruments, and Determining Other Matters in Connection therewith to Re-Finance an Existing 2009 Lease/Purchase Agreement with Motorola, Inc
Purpose
PURPOSE/BACKGROUND:
The city entered into a lease with Motorola in 2009 to acquire a radio system for the City.
Discussion:
The staff and Financial Advisors have identified a refinancing opportunity for the lease entered into with Motorola in 2009 for acquiring a radio system for the City. A request for proposals was issued for the refinancing and 14 responses were received. After analyzing the responses, it has been determined that the proposal submitted by Bank of America Merrill Lynch generated the most savings for the City. The total savings for the refinancing are estimated to be approximately $435,000 over the remaining four years of the lease term, saving the City approximately $108,000 per year. The present value savings for the transaction is estimated to be 6.31%, well above the City’s typical 4% savings target. It should also be noted that according to our Financial Advisors, the number and quality of the 14 responses received is “unprecedented and a testament to how favorably the finance community views the management and fiscal health of the City.”
Impact:
The total savings for the refinancing are estimated to be approximately $435,000 over the remaining four years of the lease term, saving the City approximately $108,000 per year.
Recommendation:
Rec
Approve resolution.
Body
WHEREAS, in 2009, the City Council of the City of Hampton, Virginia approved an Equipment Lease/Purchase agreement with Motorola, Inc. (the “Motorola Lease”) to lease for ultimate purchase certain public safety communications and related equipment (the “Equipment”);
WHEREAS, it has been determined that current market conditions present an opportunity to re-finance the Motorola Lease to achieve rental pa...
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