HomeMy WebLinkAboutR-11608 approving the lease purchase of a fire engine from JP Morgan Chase Bank, N.A. and approvingR 11608
RESOLUTION NO. 11608 (2025 SERIES)
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS
OBISPO, CALIFORNIA, APPROVING THE LEASE PURCHASE OF A
FIRE ENGINE FROM JPMORGAN CHASE BANK, N.A. AND
APPROVING THE FINAL FORM OF FINANCING DOCUMENTS AND
OFFICIAL ACTIONS
WHEREAS, the City of San Luis Obispo provides fire protection services, which
includes equipment that must be replaced from time to time.
WHEREAS, pursuant to applicable law, the City of San Luis Obispo may acquire
and encumber real and personal property, including, without limitation, rights and interest
in property, leases and easements necessary to the functions or operations of the City.
WHEREAS, the City Council has considered a Lease Purchase Financing
Proposal offered by JPMorgan Chase Bank, N.A. and desires to authorize the execution
of the lease in the amount of $1,068,439.00.
WHEREAS, the final form of the legal documentation relating to the financing has
been prepared and the City Council wishes at this time to approve the final financing plan
and the final form of such legal documentation.
NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis
Obispo as follows:
SECTION 1. The City Council hereby approves the Add-on Lease Agreement
relating to the financing of a fire engine, between the City and JPMorgan Chase Bank,
N.A. in the form attached hereto as Exhibit A, along with any changes therein or additions
thereto deemed advisable by a the City Manager or Finance Director as an Authorized
Officer; an Authorized Officer is hereby authorized and directed to attest, the final form of
the Add-on Lease Agreement.
Docusign Envelope ID: A1D31608-160B-4040-BFBE-D9FB6CB11F91
Resolution No. 11608 (2025 Series) Page 2
R 11608
SECTION 2. The Mayor, the City Manager, the Director of Finance, the City Clerk,
Finance Director and City Manager are each authorized and directed in the name and on
behalf of the City to make any and all assignments, certificates, requisitions, agreements,
notices, consents, instruments of conveyance, warrants and other documents, which they
or any of them deem necessary or appropriate in order to consummate any of the
transactions contemplated by the agreements and documents approved under this
Resolution. Whenever in this Resolution any officer of the City authorized to execute or
countersign any document or take action, such execution, countersigning or action may
be taken on behalf of such officer by any person designated by such officer to act on his
or her behalf in the case such officer is absent or unavailable.
Upon motion of Vice Mayor Shoresman, seconded by Council Member Boswell,
and on the following roll call vote:
AYES: Council Member Boswell, Francis, Marx, Vice Mayor Shoresman,
and Mayor Stewart
NOES: None
ABSENT: None
The foregoing resolution was adopted this 4th day of November 2025.
___________________________
Mayor Erica A. Stewart
ATTEST:
______________________
Teresa Purrington
City Clerk
APPROVED AS TO FORM:
______________________
J. Christine Dietrick
City Attorney
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the
City of San Luis Obispo, California, on ______________________.
___________________________
Teresa Purrington
City Clerk
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11/7/2025 | 11:21 AM PST
City of San Luis Obispo
Add-on to Master Lease Agreement dated August 31, 2018
Financing For Pierce Enforcer Pumper
September 26, 2025
J. P. Morgan Equipment Finance Contact:
Rebecca Lowe, Executive Director
Senior Territory Manager
JPMorgan Chase Bank, N.A.
1390 S Main Street, Fl 2
Walnut Creek, CA 94596
Telephone: 925-212-1065
rebecca.a.lowe@jpmorgan.com
JPMorgan Chase Bank, N.A. Contact:
Sean Hennessy, Executive Director
Relationship Executive
JPMorgan Chase Bank, N.A.
300 S. Grand Avenue, Fl 3
Los Angeles, CA 90071
Telephone: 213-621-8187
lou.mastro@jpmorgan.com
Exhibit ADocusign Envelope ID: A1D31608-160B-4040-BFBE-D9FB6CB11F91
September 26, 2025
Emily Jackson
Finance Director
City of San Luis Obispo
990 Palm Street
San Luis Obispo, CA 93401
Dear Emily:
J.P. Morgan Chase Equipment Finance is pleased to propose to the City of San Luis Obispo an
equipment financing to support the City’s purchase of one (1) Pierce fire truck in an amount up to
$1.068439.01, subject to the following terms and conditions described herein (the “Term Sheet”). The terms
and conditions are based on the City’s selection of a 3yr financing term with an advance payment of
$259,742. The final interest rate will be determined based on the interest rate formula detailed in the Term
Sheet.
The proposed terms are submitted to you in our capacity as a Lessor in an arm’s length commercial
transaction. J.P. Morgan is acting solely as a principal and not as a “Municipal Advisor” as defined in Section
15B of the Securities and Exchange Act of 1934, as amended, and the related final rules (the "Municipal
Advisor Rules") or any other agent or fiduciary capacity. JPMorgan is providing this information to you in
reliance on the Bank exemption in the Municipal Advisor Rules and is not recommending that you take acti on
or refrain from taking action or providing any advice. See “Municipal Advisor Disclosures and Disclaimers”
in the Summary of Terms for further information relating to same.
Should you have any questions about any aspect of this Term Sheet, please do not hesitate to contact
me at (925) 212-1065. Thank you and we look forward to continuing to work with the City of San Luis Obispo
and your financing team.
Yours sincerely,
Rebecca Lowe
Rebecca Lowe
Executive Director
Equipment Finance
1390 S Main St, Floor 02
Walnut Creek, CA 94596
Email – rebecca.a.lowe@jpmorgan.com
Rebecca Lowe
Executive Director
Sean Hennessy
Executive Director
Docusign Envelope ID: A1D31608-160B-4040-BFBE-D9FB6CB11F91
City of San Luis Obispo
Tax-Exempt Municipal Lease Purchase
Summary of Terms and Conditions
September 26, 2025
J.P. Morgan is pleased to submit the following equipment financing Term Sheet. This document is
for discussion purposes only and is contingent upon the Lessee’s compliance with the requirements of the
Internal Revenue Code of 1986 (“Code”), as amended, and all applicable state laws related to Lessee’s
ability to enter into a tax-exempt lease-purchase financing for the intended purposes.
TRANSACTION SUMMARY
Lessee:
City of San Luis Obispo
Lessor: JPMorgan Chase Bank, N.A. or any affiliate of JPMorgan Chase Bank, N.A., its
successors and/or assigns (“JPMorgan Chase”/“Lessor”/ or “Bank”).
Transaction: Fixed-rate, fully amortizing, tax-exempt lease-purchase agreement
(“Agreement”).
Use of Proceeds: To finance one (1) Pierce Enforcer Type 1 Fire Engine, the legal title of which
will vest with Lessee during the term of the Agreement . All equipment
proposed for financing will be subject to final review and acceptance by
Lessor prior to closing.
Financing Amount: $1,068,439.01
Bank Qualified: This Term Sheet assumes that Lessee will issue less than $10 million in tax-
exempt obligations this calendar year and that the Lessee will designate this
lease as a “bank qualified” tax-exempt obligation.
Commencement Date: Anticipated to be on or around October 30, 2025 or a mutually agreed upon
date.
TRANSACTION DETAILS
Financing Term: Three (3) Years
Payment / Frequency: Equal quarterly payments of principal and interest after an advance payment
of ($259,742), commencing October 30, 2025. (see sample amortization
schedule attached)
Interest Rate: 4.615%
Adjustment to Rate: The Interest Rate and Payments will be subject to the index Formula below
based upon the then current 2-year SOFR Swap Rate (“Index Rate”), which
was 3.435% as of September 26, 2025. The Interest Rate will be the Index
Rate multiplied by the Bank’s Tax Exempt Factor of 79% plus a Spread, as
outlined below. For every change (increase or decrease) in the Index Rate a
corresponding adjustment will be made to the Interest Rate to maintain
Lessor’s economics. The final Interest Rate and Payment will be locked
upon Council approval.
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Interest Rate = (Index Rate x 79%) + spread
2-Year Swap = (3.435% x 79%) + 1.9014% = 4.615%
Lessor reserves the right to adjust the pricing proposed in order to maintain
Lessor’s anticipated economic return as a result of material adverse change.
Prepayment:
The Financing may be prepaid in whole but not in part, prior to maturity, on
any payment date after the initial 12 months from Commencement, subject
to 30 days prior written notice. Prepayment may be subject to a fixed rate
/ “make whole” break funding charge.
Disbursement of
Proceeds:
The transaction will fund upon delivery of an acceptable performance
bond in which JPMorgan Chase has been added as “additional insured” under
the Obligee Rider.
Security: Lessee will grant Lessor a first priority security interest in the financed
equipment. UCC I and UCCII filings will be completed as applicable, as well
as Lessor shall be named as lienholder in all titled vehicles.
Appropriation: This Agreement shall be subject to appropriation. The Agreement will
require appropriation for payment for any and all equipment on a lease
schedule.
OTHER TERMS
Documentation:
The terms of this financing will be evidenced by agreements, instruments
and documents (“Lease Documents”) usual and customary for a Tax -Exempt
Lease Purchase. The Lease Documents must be acceptable to Lessor and its
counsel. Existing Master Lease documents dated August 31, 2018 shall be
used for this financing. In addition, Lessee shall provide written confirmation
that Lessor has been added, as Additional Obligee, to the Lessee’s
performance bond. Performance bond provider shall be mutually agreeable
to Lessee and Lessor.
Lessee shall be responsible for its own expenses related to review of the
lease documents and delivery of opinion of counsel.
Conditions
Precedent:
Usual and customary conditions to issuance of the financing including
acceptable legal documentation which will include an opinion of counsel
that the financing is valid, binding and enforceable. Additionally,
documentation will provide that interest earned by the Lessor in this
transaction will be excluded from gross income for federal tax purposes.
Representations
and Warranties:
Usual representations and warranties for like situated Lessees and the
Facility’s type and tenor, including, without limitation, absence of material
adverse change, absence of material litigation, absence of default or
potential default and continued accuracy of representations.
Representations and warranties relating to Absence of Sovereign Immunity
(or waiver of sovereign immunity, if applicable) will also be required for all
governmental entities.
Maintenance &
Insurance:
All maintenance and insurance are the responsibility of Lessee. Lessee shall
bear all risk of loss or damage of the Equipment and will be responsible for
keeping the Equipment insured with companies satisfactory to Lessor.
Lessor, its parent and/or affiliates, its successors and assigns must be named
Docusign Envelope ID: A1D31608-160B-4040-BFBE-D9FB6CB11F91
as loss payee and additional insured as applicable, on all insurance policies.
Evidence of such insurance must be satisfactory to Lessor.
Waiver of Jury Trial: The Lessee hereby consents to the adjudication of any and all claims
pursuant to Judicial Reference as provided in California Code of Civil
Procedure Section 638, and the judicial referee shall be empowered to hear
and determine any and all issues in such Reference whether fact or law.
Anti-Corruption Laws
and Sanctions:
The documentation shall contain representations and warranties that the
Lessee has implemented and maintains in effect policies and procedures
designed to ensure compliance by the Lessee, its subsidiaries and their
respective directors, officers, employees and agents with Anti-Corruption
Laws and applicable Sanctions, and the Lessee, its subsidiaries and their
respective officers and employees and to the knowledge of the Lessee, its
directors and agents, are in compliance with Anti -Corruption Laws and
applicable Sanctions in all material respects. None of (a) the Lessee, any
subsidiary or any of their respective directors, officers or employees, or (b)
to the knowledge of the Lessee, any agent of the Lessee or any subsidiary
that will act in any capacity in connection with or benefit from the credit
facility established hereby, is a Sanctioned Person. No Borrowing or credit
facility, use of proceeds or other transaction contemplated by this
Agreement will violate any Anti-Corruption Law or applicable Sanctions.
Waiver of Immunity: Lessee hereby expressly and irrevocably waives any immunity (including
sovereign, crown or similar immunity) and any defenses based thereon from
any suit, action or proceeding or from any legal process in any forum with
respect to Lease.
Governing Law: All aspects of the credit(s) being discussed including this Term Sheet and
any Lease Documents would be governed by the laws of the State of
California.
Term Sheet Expiration: This Term Sheet will expire if acceptance does not occur by October 9, 2025
(unless extended in writing by Lessor).
Please feel free to contact me at (925) 212-1065 if you have any questions, or would like to discuss this
Term Sheet in greater detail. Upon receipt of the accepted Term Sheet, we will promptly begin the
documentation process in anticipation of the City’s Council meeting on October 21, 2025 .
Thank you for allowing us to be of service!
Yours sincerely,
Rebecca Lowe Sean Hennessy
Executive Director Executive Director
City of San Luis Obispo
Accepted Date: _____________________________
By: ________________________________________
Title: ______________________________________
Docusign Envelope ID: A1D31608-160B-4040-BFBE-D9FB6CB11F91
SAMPLE AMORTIZATIONS TABLE
3 Year – advance payment
Loan Amortization
Rate.....................................................4.615%
starting debt ending
Date balance takedowns service interest principal balance
10/30/2025 - 1,068,439.00 259,742.00 - 259,742.00 808,697.00
1/30/2026 808,697.00 - 78,704.46 9,330.34 69,374.12 739,322.88
4/30/2026 739,322.88 - 78,704.46 8,529.94 70,174.52 669,148.35
7/30/2026 669,148.35 - 78,704.46 7,720.30 70,984.16 598,164.19
10/30/2026 598,164.19 - 78,704.46 6,901.32 71,803.14 526,361.05
1/30/2027 526,361.05 - 78,704.46 6,072.89 72,631.57 453,729.48
4/30/2027 453,729.48 - 78,704.46 5,234.90 73,469.56 380,259.92
7/30/2027 380,259.92 - 78,704.46 4,387.25 74,317.21 305,942.70
10/30/2027 305,942.70 - 78,704.46 3,529.81 75,174.65 230,768.05
1/30/2028 230,768.05 - 78,704.46 2,662.49 76,041.98 154,726.08
4/30/2028 154,726.08 - 78,704.46 1,785.15 76,919.31 77,806.77
7/30/2028 77,806.77 - 78,704.46 897.70 77,806.77 -
Total 1,125,491.09 57,052.09 1,068,439.00
Docusign Envelope ID: A1D31608-160B-4040-BFBE-D9FB6CB11F91