TITLE: Title
Vehicle and Equipment Installment Financing Contract Award
PURPOSE: The Town Council is requested to award a lease purchase installment financing contract for vehicle and equipment acquisitions in 2020 and 2021
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DEPARTMENT: Finance and Town Manager
CONTACT INFORMATION: Arche McAdoo (919) 370-6065, Cary McNallan, and David Andrews
INFORMATION: The Town finances the acquisition of vehicles and equipment through the use of lease purchase installment financing. Normally, this is done on an annual basis; however, the Town did not issue a contract in 2020 for vehicles and equipment. By issuing a financing Request for Proposal for two years we increased the principal amount which attracted more competitive responses (See Attachment B).
On September 4, 2020 the Town issued a request for proposal for installment financing for the acquisition of vehicles and equipment in 2020 and 2021. The Town is not required by law to undertake a competitive process for lease purchase installment financing for vehicles and/or equipment. In order to ensure that the Town gets a competitive financing rate, we issue RFP to financial institutions. We sent RFP to eighteen financial institutions inviting them to submit a proposal to finance $1,871,923 for seven years (See Attachment C). The Town received 7 proposals from six financial institutions.
The proposal with the lowest interest rate (1.040%)was submitted by Key Government Finance, Inc. Total interest over seven years would be $78,622 with annual payment of $278,649 beginning November 2021 (assuming we close in November 2020).
FISCAL & STAFF IMPACT: This annual interest payment is included in the FY 2020-21 adopted budget. By having the first payment due a year after closing (i.e., next fiscal year) and changing term from five to seven years, allows the Town to minimize cash outlays at this time.
RECOMMENDATION:r The Town Council is requested to adopt the re...
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