HomeMy WebLinkAbout11-05-2013 c7 purhcase of fire engine
FROM: Daryl R. Grigsby, Director of Public Works
Garret Olson, Fire Chief
Prepared By: Jeremy Schmidt, Fleet Maintenance Supervisor
Timothy S. Bochum, Deputy Director of Public Works
SUBJECT: PURCHASE OF FIRE ENGINE, SPECIFICATION NO. 90059.
RECOMMENDATIONS
1. Approve the Lease Purchase of one (1) new 2013 Pierce Arrow PUC Type 1 Fire Engine
in the amount of $548,351 with payments to be made over a 5 year term and Authorize
the City Manager, Finance Director and City Attorney to execute all related documents
on behalf of the city.
2. Authorize the Finance Director to execute a sole source lease purchase order through
Oshkosh Capital in the amount of $548,351 for the purchase of (1) new 2013 Pierce
Arrow PUC Type 1 Fire Engine.
3. Authorize the surplus designation of 1991 Pierce Fire Pumper, Fleet Asset No. 9180 by
sale, auction, trade-in or other method in accordance with the City’s policies and
procedures as prescribed in the Financial Management Manual Section 405-L and 480.
DISCUSSION
Emergency vehicles are a vital part of the service delivery for the San Luis Obispo City Fire
Department. The Fire Department responds to over 5,000 emergency service calls annually. A
Fire Engine Pumper is staffed with life safety personnel and equipment to provide all-hazards
emergency services. These services include advanced life support emergency medical services
and fire protection to the individuals and property of the community. Fire and Fleet operations
developed a fire engine specification committee that took into account the unique features of our
community and sought the best overall fire pumper. This new fire engine pumper design will
replace a 23 year-old unit and provide a higher level of service while reducing costs and staff
time for maintenance. This new fire engine will also include the latest environmental features
and systems which significantly reduce adverse environmental impacts when compared with the
current fire engine.
Background
Staff is seeking the authorization to execute a lease purchase agreement for the acquisition of the
new Fire Engine currently budgeted and approved for replacement as part of the 2013-15
Financial Plan. Following extensive analysis, staff has concluded that the 2013 Pierce Type 1
Date 11/05/13
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Fire Engine Purchase Page 2
PUC Pumper would meet the City’s needs. The Pierce Fire Engine has been the dependable
workhorse fire engine of the city for more than 20 years.
Features include:
• A more efficient pump system (Pierce PUC Pumper) with a fuel-efficient, low
maintenance engine and transmission
• A 500 gallon water tank
• A foam system (Husky 3 Foam Proportioner) designed to handle structure, wild land,
and automobile fires with Class B capabilities
• Wireless remote operated foam deluge monitor
• Honda 5KW gasoline powered generator
• A 3000 watt light tower (Will-Burt Night Scan Chief) that provides greater nighttime
visibility
Sole Source Purchase
Staff recommends a sole source purchase award to South Coast Fire Equipment in the amount of
$548,351 for the purchase of a 2013 Pierce Arrow PUC fire Pumper. City purchasing guidelines
allows for sole source when supplies or equipment have been uniformly adopted in the city or
otherwise standardized. The Pierce Fire Engine Type 1 Pumper has been the standard fire engine
for the City of San Luis Obispo for the last quarter century. While there are several vendors that
could provide a fire pumper, staff is recommending Pierce due to a variety of issues, including,
equipment familiarity by both the user and the mechanic, turnaround time, and the benefits of
utilizing local vehicle vendors. Fleet Maintenance already has an inventory of spare parts, filters
and maintenance items for the Pierce fire pumper platform. This inventory would be costly to
retrofit to accommodate another make of engine. Also, the Fire Vehicle Mechanic has extensive
knowledge of Pierce vehicles and will need limited training to maintain this engine. The cost for
the Pierce Engine is comparable to that of other vendors.
Pierce Manufacturing, Inc. provides an integrated approach to the design and manufacture of
products that delivers superior engine and a dedicated support team. The Pumper’s chassis, cab
weldment, cab, pump house (including the sheet metal enclosure, valve controls, piping and
operator’s panel) and body will be entirely designed, tested, and hand assembled to our exact
specifications. The electrical system will be both designed and integrated by Pierce
Manufacturing. The warranties relative to these major components (excluding component
warranties such as engine, transmission, axles, pump, etc.) will be provided by Pierce as a single
source manufacturer. Pierce's single source solution adds value by providing a fully engineered
product that offers durability, reliability, maintainability, performance, and a high level of
quality.
In addition to the cost consideration, Pierce has an excellent reputation in the Fire and emergency
response industry as a premier fire engine builder. The latter feature limits disruption to service
for fire response services as any necessary equipment can be quickly transferred from the
existing vehicle into the new vehicle.
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CONCURRENCES
The Fire Department staff has reviewed the fire engine specification and concurs with the Fleet
Supervisor recommendation for its replacement.
FISCAL IMPACT
Funding for the fire engine replacement was included in the 2013-15 Financial Plan.
Funding Source
Equipment Replacement Fund 410 Project Costs (91172)
Base Unit Cost $506,467
Performance Bond $1,367
Sales Tax (8%)$40,517
Cost from Dealer:$548,351
City Logo & Readying for Service $1,000
Total Vehicle Cost $549,351
Contingencies 4%$22,000
Total Project Cost $571,351
Approved 2013-15 Budget $572,900
TOTAL BALANCE (Savings)$1,549
Staff recommends authorization of the request to make a sole source placement for the order of
the engine in the amount of $548,351 to South Coast Fire Equipment for the Purchase of a 2013
Pierce PUC Arrow Type 1 Pumper (Attachment 2).
Lease Purchase Terms
The city’s Financial Advisor has received financing offers from several banks. The interest rates
ranged from 1.88% to 1.60%. If this transaction is financed using one of the banks that were
contacted, the cost of the Financial Advisor’s services which are set at $3,500.00 would be
included in the amount financed. The offer from US Bank represented the closest comparative
terms and rate compared to the financing proposal offered by Oshkosh Capital, which is the
lending arm of the engine builder’s parent company. The interest rate offered by Oshkosh
Capital, which is fixed at this time, is 2.108% for a 5 year term. The loan can be prepaid in full
with a 3% premium charged at the time of the prepayment, which is the same amount that would
be charged by US Bank.
The following table reflects the comparative payment streams of the two financing proposals.
The payments required by the Oshkosh Capital lease agreement are approximately $400.00 more
per year compared to those estimated for the US Bank lease proposal. Based on the fact that the
rate has been set by Oshkosh Capital at this time, the final cost of the financing is only $2,000
more than the US Bank proposal and the fact that the Oshkosh Capital leasing program ensures
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that the integration of the financing and the in-house discount provided toward the cost of the
engine will occur without delay, staff recommends approval of the Oshkosh Capital lease
purchase.
Oshkosh Capital US Bancorp Difference
Amount Borrowed: $548,351 $554,592 $6,241
Annual Payments: $116,702 $116,298 ($404)
$116,702 $116,298 ($404)
$116,702 $116,298 ($404)
$116,702 $116,298 ($404)
$116,702 $116,298 ($404)
Total Amount Paid: $583,510 $581,490 ($2,020)
Annual Interest Rate: 2.107% 1.60%
The payment stream for the Oshkosh lease purchase represents an amount that is
$9,300.00 less per year than the amount that had been forecast in the Financial Plan with
payments beginning in July 2014 as assumed in the Financial Plan.
Because Oshkosh Capital is willing to enter into the lease directly with the city, it is not
necessary for the Capital Improvement Board to meet and consider this item. When the WRF
Energy Efficiency Project financing was approved, the lender would not act as the counter party
to the lease that was proposed, and the Capital Improvement Board served that purpose.
ALTERNATIVE
Deny Funding Transfer and Purchase. The City Council could choose to deny or defer the fire
engine. Staff does not recommend this option as the engine replacement was approved as part of
the 2013-15 Financial Plan. The fire engine has met its useful target life in both years and
mileage. Denying or deferring the purchase could result in costly maintenance and repairs due to
aging vehicles. The reliability of this vehicle has been degraded to the point of unpredictable.
There is sufficient funding in the Fleet Completed Projects account to support this purchase.
ATTACHMENTS
1. Master lease purchase agreement from Oshkosh Capital
2. Purchase Order, South Coast Fire Equipment
3. City Council resolution
T:\Council Agenda Reports\2013\2013-11-05\Fleet Vehicle Purchase (Grigsby-Olson-Bochum-Schmidt)
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Master Lease-Purchase Agreement
Between
CITY OF SAN LUIS OBISPO AND OSHKOSH CAPITAL
DOCUMENT INDEX
Master Lease-Purchase Agreement – Sign and provide title on the last page
Lease Schedule with Schedule A-1 – Sign and title
Vehicle Schedule Addendum –Sign and title
Incumbency Certificate and Resolution – List your authorized signor(s) and title(s); have
secretary or appropriate trustee attest to the information and signature(s) provided by
signing and printing his/her name, title and date. The person who validates the
signatures should not sign the lease documents. The resolution must reflect the
title(s) of the individual(s) who have authorization to sign the documents.
Opinion of Counsel Letter – Enclosed is a template. Please ask your attorney to prepare
on his/her letterhead, and include all of the items in the template.
Insurance Request Form – Fill in your insurer’s information and sign. Please contact
your insurer, prior to delivery, to obtain a certificate of insurance. Please enclose the
certificate with the signed documentation or have the insurer fax the certificate directly to
me.
Three Party Agreement – Sign and title.
Delivery & Acceptance Certificate – At point of delivery, fill out this form and fax it to
me. Please return the original via US Postal Service.
IRS FORM 8038-G – Sign, date, and title
Minutes of Governing Body (approving the purchase & finance of equipment) – Please
return a copy with the documents.
Sales Contract or Purchase Order - Please provide a copy of the Sales Contract
Enter into with Pierce Manufacturing or a copy of the Purchase Order issued to
Pierce Manufacturing Inc.
Attachment 1
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MASTER LEASE – PURCHASE AGREEMENT
Dated as of November 11, 2013
This Master Lease-Purchase Agreement together with all addenda, riders and attachments
hereto, as the same may from time to time be amended, modified or supplemented (“Master Lease”) is
made and entered by and between Oshkosh Capital (“Lessor”) and the Lessee identified below
(“Lessee”).
LESSEE: City of San Luis Obispo
1. LEASE OF EQUIPMENT. Subject to the terms and conditions of this Master Lease, Lessor agrees to
lease to Lessee, and Lessee agrees to lease from Lessor, all Equipment described in each Schedule
signed from time to time by Lessee and Lessor.
2. CERTAIN DEFINITIONS. All terms defined in the Lease are equally applicable to both the singular
and plural form of such terms. (a) “Schedule” means each Lease Schedule signed and delivered by
Lessee and Lessor, together with all addenda, riders, attachments, certificates and exhibits thereto, as
the same may from time to time be amended, modified or supplemented. Lessee and Lessor agree that
each Schedule (except as expressly provided in said Schedule) incorporates by reference all of the terms
and conditions of the Master Lease. (b) “Lease” means each Schedule and this Master Lease as
incorporated into said Schedule. (c) “Equipment” means the property described in each Schedule,
together with all attachments, additions, accessions, parts, repairs, improvements, replacements and
substitutions thereto. (d) “Lien” means any security interest, lien, mortgage, pledge, encumbrance,
judgment, execution, attachment, warrant, writ, levy, other judicial process or claim of any nature
whatsoever by or of any person.
3. LEASE TERM. The term of the lease of the Equipment described in each Lease (“Lease Term”)
commences on the first date any of such Equipment is accepted by Lessee pursuant to Section 5 hereof
and, unless earlier terminated as expressly provided in the Lease, continues until Lessee’s payment and
performance in full of all of Lessee’s obligations under the Lease.
4. RENT PAYMENTS.
4.1 For each Lease, Lessee agrees to pay to Lessor the rent payments in the amounts and at the
times as set forth in the Schedule A-1 attached to the Schedule (“Rent Payments”). A portion of each
Rent Payment is paid as and represents the payment of interest as set forth in the Schedule A-1. Rent
Payments will be payable for the Lease Term in U.S. dollars, without notice or demand at the office of
Lessor (or such other place as Lessor may designate from time to time in writing).
4.2 If Lessor receives any payment from Lessee after the due date, Lessee shall pay Lessor on
demand as a late charge five per cent (5%) of such overdue amount, limited, however, to the maximum
amount allowed by law.
4.3 EXCEPT AS SPECIFICALLY PROVIDED IN SECTION 6 HEREOF OR IN ANY WRITTEN
MODIFICATION TO THE LEASE SIGNED BY LESSOR, THE OBLIGATION TO PAY RENT PAYMENTS
UNDER EACH LEASE SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS AND SHALL
NOT BE SUBJECT TO ANY SETOFF, DEFENSE, COUNTERCLAIM, ABATEMENT OR RECOUPMENT
FOR ANY REASON WHATSOEVER.
5. DELIVERY; ACCEPTANCE; FUNDING CONDITIONS.
5.1 Lessee shall arrange for the transportation, delivery and installation of all Equipment to the
location specified in the Schedule (“Location”) by Equipment suppliers (“Suppliers”) selected by Lessee.
Lessee shall pay all costs related thereto unless Lessor otherwise agrees to pay such costs as stated in
the Schedule.
5.2 Lessee shall accept Equipment as soon as it has been delivered and is operational. Lessee
shall evidence its acceptance of any Equipment by signing and delivering to Lessor the applicable
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Schedule. If Lessee signs and delivers a Schedule and if all Funding Conditions have been satisfied in
full, then Lessor will pay or cause to be paid the costs of such Equipment as stated in the Schedule
(“Purchase Price”) to the applicable Supplier.
5.3 Lessor shall have no obligation to pay any Purchase Price unless all reasonable conditions
established by Lessor (“Funding Conditions”) have been satisfied, including, without limitation, the
following: (a) Lessee has signed and delivered the Schedule and its Schedule A-1; (b) no Event of Default
shall have occurred and be continuing; (c) no material adverse change shall have occurred in the Internal
Revenue Code of 1986, as amended, and the related regulations and rulings thereunder (collectively, the
“Code”); (d) no material adverse change shall have occurred in the financial condition of Lessee or any
Supplier; (e) the Equipment is reasonably satisfactory to Lessor and is free and clear of any Liens (except
Lessor’s Liens); (f) all representations of Lessee in the Lease remain true, accurate and complete; and (g)
Lessor has received all of the following documents, which shall be reasonably satisfactory, in form and
substance, to Lessor: (1) evidence of insurance coverage required by the Lease, (2) an opinion of
Lessee’s counsel; (3) reasonably detailed invoices for the Equipment; (4) Uniform Commercial Code
(UCC) financing statements; (5) copies of resolutions by Lessee’s governing body, duly authorizing the
Lease and incumbency certificates for the person(s) who will sign the Lease; (6) such documents and
certificates relating to the tax-exempt interest payable under the Lease (including, without limitation, IRS
Form 8038G or 8038GC) as Lessor may request; and (7) such other documents and information
previously identified by Lessor or otherwise reasonably requested by Lessor.
6. TERMINATION FOR GOVERNMENTAL NON-APPROPRIATIONS.
6.1 For each Lease, Lessee represents and warrants: that it has appropriated and budgeted
the necessary funds to make all Rent Payments required pursuant to such Lease for the remainder of the
fiscal year in which the Lease Term commences; and that it intends to make Rent Payments for the full
Lease Term as scheduled on the applicable Schedule A-1 so long as funds are appropriated in each
fiscal year by its governing body. Lessee reasonably believes that moneys in an amount sufficient to
make all Rent Payments can and will lawfully be appropriated and made available therefor. All Rent
Payments shall be payable out of the general funds of Lessee or out of other funds legally available
therefor. Lessor agrees that the Leases will not be general obligations of Lessee and that the Leases
shall not constitute pledges of either the full faith and credit of Lessee or the taxing power of Lessee.
6.2 If Lessee’s governing body fails to appropriate sufficient funds in any fiscal year for Rent
Payments or other payments due under a Lease and if other funds are not available for such payments,
then a “Non-Appropriation Event” shall be deemed to have occurred. If a Non-Appropriation Event
occurs, then: (a) Lessee shall give Lessor immediate notice of such Non-Appropriation Event and provide
written evidence of such failure by Lessee’s governing body; (b) on the Return Date, Lessee shall return
to Lessor all, but not less than all, of the Equipment covered by the affected Lease, at Lessee’s sole
expense, in accordance with Section 21 hereof; and (c) the affected Lease shall terminate on the Return
Date without penalty or expense to Lessee, provided, that Lessee shall pay all Rent Payments and other
amounts payable under the affected Lease for which funds shall have been appropriated or are otherwise
available, provided further, that Lessee shall pay month-to-month rent at the rate set forth in the affected
Lease for each month or part thereof that Lessee fails to return the Equipment under this Section 6.2.
“Return Date” means the last day of the fiscal year for which appropriations were made for the Rent
Payments due under a Lease.
7. NO WARRANTY BY LESSOR. The Equipment is sold “AS IS”. LESSEE ACKNOWLEDGES
THAT LESSOR DID NOT MANUFACTURE THE EQUIPMENT. LESSOR DOES NOT REPRESENT
THE MANUFACTURER, OWNER, OR DEALER, AND LESSEE SELECTED THE EQUIPMENT BASED
UPON LESSEE’S OWN JUDGMENT. LESSOR MAKES NO WARRANTIES, EXPRESS OR IMPLIED,
INCLUDING WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE
OR OTHERWISE OR AS TO THE EQUIPMENT’S VALUE, DESIGN, CONDITION, USE, CAPACITY OR
DURABILITY. LESSEE AGREES THAT REGARDLESS OF CAUSE, LESSOR IS NOT RESPONSIBLE
FOR, AND LESSEE WILL NOT MAKE ANY CLAIM AGAINST LESSOR FOR, ANY DAMAGES,
WHETHER CONSEQUENTIAL, DIRECT, SPECIAL OR INDIRECT INCURRED BY LESSEE IN
CONNECTION WITH THE EQUIPMENT OR THIS MASTER LEASE – LEASE PURCHASE
AGREEMENT. NEITHER THE MANUFACTURER, THE DEALER, NOR ANY SALESPERSON,
EMPLOYEE OR AGENT OF THE DEALER OR MANUFACTURER, IS LESSOR’S AGENT OR HAS
ANY AUTHORITY TO SPEAK FOR LESSOR OR TO BIND LESSOR IN ANY WAY. For and during the
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Lease Term, Lessor hereby assigns to Lessee any manufacturer’s or Supplier’s product warranties,
express or implied, applicable to any Equipment and Lessor authorizes Lessee to obtain the customary
services furnished in connection with such warranties at Lessee’s sole expense. Lessee agrees that (a)
all Equipment will have been purchased by Lessor in accordance with Lessee’s specifications from
Suppliers selected by Lessee, (b) Lessor is not a manufacturer or dealer of any Equipment and has no
liability for the delivery or installation of any Equipment, (c) Lessor assumes no obligation with respect to
any manufacturer’s or Supplier’s product warranties or guaranties, (d) no manufacturer or Supplier or any
representative of said parties is an agent of Lessor, and (e) any warranty, representation, guaranty or
agreement made by any manufacturer or Supplier or any representative of said parties shall not be
binding upon Lessor.
8. TITLE; SECURITY INTEREST.
8.1 Upon Lessee’s acceptance of any Equipment under its Lease, title to the Equipment shall
vest in Lessee, subject to Lessor’s security interest therein and all of Lessor’s other rights under such
Lease including, without limitation, Sections 6, 20 and 21 hereof.
8.2 As collateral security for the Secured Obligations, Lessee hereby grants to Lessor a first
priority security interest in any and all of the Equipment (now existing or hereafter acquired) and any and
all proceeds thereof. Lessee agrees to execute and deliver to Lessor all necessary documents to
evidence and perfect such security interest, including, without limitation, Uniform Commercial Code
(UCC) financing statements and any amendments thereto.
8.3 “Secured Obligations” means Lessee’s obligations to pay all Rent Payments and all other
amounts due and payable under all present and future Leases and to perform and observe all covenants,
agreements and conditions (direct or indirect, absolute or contingent, due or to become due, or existing or
hereafter arising) of Lessee under all present and future Leases.
9. PERSONAL PROPERTY. All Equipment is and will remain personal property and will not be
deemed to be affixed or attached to real estate or any building thereon.
10. MAINTENANCE AND OPERATION. Lessee agrees it shall, at its sole expense: (a) repair and
maintain all Equipment in good condition and working order, in accordance with manufacturer’s
instructions, and supply and install all replacement parts or other devices when required to so maintain
the Equipment or when required by applicable law or regulation, which parts or devices shall
automatically become part of the Equipment; and (b) use and operate all Equipment in a careful manner
in the normal course of its operations and only for the purposes for which it was designed in accordance
with the manufacturer’s warranty requirements, and comply with all laws and regulations relating to the
Equipment. If any Equipment is customarily covered by a maintenance agreement, Lessee will furnish
Lessor with a maintenance agreement by a party reasonably satisfactory to Lessor. No maintenance or
other service for any Equipment will be provided by Lessor. Lessee will not make any alterations,
additions or improvements (“Improvements”) to any Equipment without Lessor’s prior written consent
unless the Improvements may be readily removed without damage to the operation, value or utility of
such Equipment, but any such Improvements not removed prior to the termination of the applicable Lease
shall automatically become part of the Equipment.
11. LOCATION; INSPECTION. Equipment will not be removed from, or if Equipment is rolling stock its
permanent base will not be changed from, the Location without Lessor’s prior written consent which will
not be unreasonably withheld. Upon reasonable notice to Lessee, Lessor may enter the Location or
elsewhere during normal business hours to inspect the Equipment.
12. LIENS, SUBLEASES AND TAXES.
12.1 Lessee shall keep all Equipment free and clear of all Liens except those Liens created under
its Lease. Lessee shall not sublet or lend any Equipment or permit it to be used by anyone other than
Lessee or Lessee’s employees.
12.2 Lessee shall pay when due all Taxes which may now or hereafter be imposed upon any
Equipment or its ownership, leasing, rental, sale, purchase, possession or use, upon any Lease or upon
any Rent Payments or any other payments due under any Lease. If Lessee fails to pay such Taxes when
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due, Lessor shall have the right, but not the obligation, to pay such Taxes. If Lessor pays any such
Taxes, then Lessee shall, upon demand, immediately reimburse Lessor therefor. “Taxes” means present
and future taxes, levies, duties, assessments or other governmental charges that are not based on the
net income of Lessor, whether they are assessed to or payable by Lessee or Lessor, including, without
limitation (a) sales, use, excise, licensing, registration, titling, gross receipts, stamp and personal property
taxes, and (b) interest, penalties or fines on any of the foregoing.
13. RISK OF LOSS.
13.1 Lessee bears the entire risk of loss, theft, damage or destruction of any Equipment in whole
or in part from any reason whatsoever (“Casualty Loss”). No Casualty Loss to any Equipment shall
relieve Lessee from the obligation to make any Rent Payments or to perform any other obligation under
any Lease. Proceeds of any insurance recovery will be applied to Lessee’s obligations under this Section
13.
13.2 If a Casualty Loss occurs to any Equipment, Lessee shall immediately notify Lessor of the
same and Lessee shall, unless otherwise directed by Lessor, immediately repair the same.
13.3 If Lessor determines that any item of Equipment has suffered a Casualty Loss beyond repair
(“Lost Equipment”), then Lessee shall either: (a) immediately replace the Lost Equipment with similar
equipment in good repair, condition and working order free and clear of any Liens (except Lessor’s Liens)
and deliver to Lessor a bill of sale covering the replacement equipment, in which event such replacement
equipment shall automatically be Equipment under the applicable Lease; or (b) on the next scheduled
Rent Payment date, pay Lessor (i) all amounts owed by Lessee under the applicable Lease, including the
Rent Payment due on such date plus (ii) an amount equal to the applicable Termination Value set forth in
the Payment Schedule to the applicable Lease. If Lessee is making such payment with respect to less
than all of the Equipment under a Lease, then Lessor will provide Lessee with the pro rata amount of the
Rent Payment and Termination Value to be paid by Lessee with respect to the Lost Equipment.
13.4 Lessee shall bear the risk of loss for, shall pay directly, and shall defend against any and all
claims, liabilities, proceedings, actions, expenses (including reasonable attorney’s fees), damages or
losses arising under or related to any Equipment, including, but not limited to, the possession, ownership,
lease, use or operation thereof. These obligations of Lessee shall survive any expiration or termination of
any Lease. Lessee shall not bear the risk of loss of, nor pay for, any claims, liabilities, proceedings,
actions, expenses (including attorney’s fees), damages or losses which arise directly from events
occurring after any Equipment has been returned by Lessee to Lessor in accordance with the terms of the
applicable Lease or which arise directly from the gross negligence or willful misconduct of Lessor.
14. INSURANCE.
14.1 (a) Lessee at its sole expense shall at all times keep all Equipment insured against all risks
of loss or damage from every cause whatsoever for an amount not less than the Termination Value of the
Equipment. Proceeds of any such insurance covering damage or loss of any Equipment shall be payable
to Lessor as loss payee. (b) The Total Amount Financed as set forth on the Schedule A-1 does not
include the payment of any premium for any liability insurance coverage for bodily injury and/or property
damage caused to others and no such insurance will be purchased by Lessor. (c) Lessee at its sole
expense shall at all times carry public liability and property damage insurance in amounts reasonably
satisfactory to Lessor protecting Lessee and Lessor from liabilities for injuries to persons and damage to
property of others relating in any way to any Equipment. Proceeds of any such public liability or property
insurance shall be payable first to Lessor as additional insured to the extent of its liability, and then to
Lessee.
14.2 All insurers shall be reasonably satisfactory to Lessor. Lessee shall promptly deliver to
Lessor satisfactory evidence of required insurance coverage and all renewals and replacements thereof.
Each insurance policy will require that the insurer give Lessor at least 30 days prior written notice of any
cancellation of such policy and will require that Lessor’s interests remain insured regardless of any act,
error, misrepresentation, omission or neglect of Lessee. The insurance maintained by Lessee shall be
primary without any right of contribution from insurance which may be maintained by Lessor.
15. PURCHASE OPTION. Upon thirty (30) days prior written notice by Lessee to Lessor, and so long as
there is no Event of Default then existing, Lessee shall have the option to purchase all, but not less than
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all, of the Equipment covered by a Lease on any Rent Payment due date by paying to Lessor all Rent
Payments then due (including accrued interest, if any) plus the Termination Value amount set forth on the
Payment Schedule to the applicable Lease for such date. Upon satisfaction by Lessee of such purchase
conditions, Lessor shall release its Lien on such Equipment and Lessee shall retain its title to such
Equipment “AS-IS, WHERE-IS,” without representation or warranty by Lessor, express or implied, except
for a representation that such Equipment is free and clear of any Liens created by Lessor.
16. LESSEE’S REPRESENTATIONS AND WARRANTIES. With respect to each Lease and its
Equipment, Lessee hereby represents and warrants to Lessor that:
(a) Lessee has full power, authority and legal right to execute and deliver the Lease and to
perform its obligations under the Lease, and all such actions have been duly authorized by appropriate
findings and actions of Lessee’s governing body;
(b) the Lease has been duly executed and delivered by Lessee and constitutes a legal, valid and
binding obligation of Lessee, enforceable in accordance with its terms;
(c) the Lease is authorized under, and the authorization, execution and delivery of the Lease
complies with, all applicable federal, state and local laws and regulations (including, but not limited to, all
open meeting, public bidding and property acquisition laws) and all applicable judgments and court
orders;
(d) the execution, delivery and performance by Lessee of its obligations under the Lease will not
result in a breach or violation of, nor constitute a default under, any agreement, lease or other instrument
to which Lessee is a party or by which Lessee’s properties may be bound or affected;
(e) there is no pending, or to the best of Lessee’s knowledge threatened, litigation of any nature
which may have a material adverse effect on Lessee’s ability to perform its obligations under the Lease;
and
(f) Lessee is a state, or a political subdivision thereof, as referred to in Section 103 of the Code,
and Lessee’s obligation under the Lease constitutes an enforceable obligation issued on behalf of a state
or a political subdivision thereof.
17. TAX COVENANTS. Lessee hereby covenants and agrees that:
(a) Lessee shall comply with all of the requirements of Section 149(a) and Section 149(e) of the
Code, as the same may be amended from time to time, and such compliance shall include, but not be
limited to, keeping a complete and accurate record of any assignments of any Lease and executing and
filing Internal Revenue Form 8038G or 8038GC, as the case may be, and any other information
statements reasonably requested by Lessor;
(b) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act
allow, any Lease to be an “arbitrage bond” within the meaning of Section 148(a) of the Code or any Lease
to be a “private activity bond” within the meaning of Section 141(a) of the Code; and
(c) Lessee shall not do (or cause to be done) any act which will cause, or by omission of any act
allow, the interest portion of any Rent Payments to be or become includable in gross income for Federal
income taxation purposes under the Code.
(d) If Lessor either (i) receives notice, in any form, from the IRS; or (ii) reasonably determines,
based on an opinion of independent tax counsel selected by Lessor and approved by Lessee, which
approval Lessee shall not unreasonably withhold, that Lessor may not exclude the interest component of
any Rent Payment under a Tax-Exempt Lease from federal gross income because Lessee breached a
covenant contained herein, then Lessee shall pay to Lessor, within thirty (30) days after Lessor notifies
Lessee of such determination, the amount which, with respect to Rent Payments previously paid and
taking into account all penalties, fines, interest and additions to tax (including all federal, state and local
taxes imposed on the interest component of all Rent Payments under such Tax-Exempt Lease due
through the date of such event) that are imposed on Lessor as a result of the loss of the exclusion, will
restore to Lessor the same after-tax yield on the transaction evidenced by such Tax-Exempt Lease
Attachment 1
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(assuming tax at the highest marginal corporate tax rate) that it would have realized had the exclusion not
been lost. Additionally, Lessee agrees that upon the occurrence of such an event with respect to a
Tax-Exempt Lease, it shall pay additional rent to Lessor on each succeeding Rent Payment due date in
such amount as will maintain such after-tax yield to Lessor. Lessor’s determination of the amount
necessary to maintain its after-tax yield as provided in this subsection (b) shall be conclusive (absent
manifest error). Notwithstanding anything in a Tax-Exempt Lease to the contrary, any payment that
Lessee is required to make pursuant to this subsection (b) shall be made only from Legally Available
Funds.
18. ASSIGNMENT.
18.1 Lessee shall not assign, transfer, pledge, hypothecate, nor grant any Lien on, nor otherwise
dispose of, any Lease or any Equipment or any interest in any Lease or Equipment.
18.2 Lessor may assign its rights, title and interest in and to any Lease or any Equipment, and/or
may grant or assign a security interest in any Lease and its Equipment, in whole or in part, to any party at
any time. Any such assignee or lien holder (an “Assignee”) shall have all of the rights of Lessor under the
applicable Lease. LESSEE AGREES NOT TO ASSERT AGAINST ANY ASSIGNEE ANY CLAIMS,
ABATEMENTS, SETOFFS, COUNTERCLAIMS, RECOUPMENT OR ANY OTHER SIMILAR
DEFENSES WHICH LESSEE MAY HAVE AGAINST LESSOR. Unless otherwise agreed by Lessee in
writing, any such assignment transaction shall not release Lessor from any of Lessor’s obligations under
the applicable Lease. An assignment or reassignment of any of Lessor’s right, title or interest in a Lease
or its Equipment shall be enforceable against Lessee only after Lessee receives a written notice of
assignment which discloses the name and address of each such Assignee. Lessee shall keep a
complete and accurate record of all such assignments in the form necessary to comply with Section
149(a) of the Code. Lessee agrees to acknowledge in writing any such assignments if so requested.
18.3 Each Assignee of a Lease hereby agrees that: (a) the term Secured Obligations as used in
Section 8.3 hereof is hereby amended to include and apply to all obligations of Lessee under the
Assigned Leases and to exclude the obligations of Lessee under any Non-Assigned Leases; (b) said
Assignee shall have no Lien on, nor any claim to, nor any interest of any kind in, any Non-Assigned
Leases; and (c) Assignee shall exercise its rights, benefits and remedies as the assignee of Lessor
(including, without limitation, the remedies under Section 20 of the Master Lease) solely with respect to
the Assigned Leases. “Assigned Leases” means only those Leases which have been assigned to an
Assignee pursuant to a written agreement; and “Non-Assigned Leases” means all Leases excluding the
Assigned Leases.
18.4 Subject to the foregoing, each Lease inures to the benefit of and is binding upon the heirs,
executors, administrators, successors and assigns of the parties hereto.
19. EVENTS OF DEFAULT. For each Lease, “Event of Default” means the occurrence of any one or
more of the following events as they may relate to such Lease: (a) Lessee fails to make any Rent
Payment (or any other payment) as it becomes due in accordance with the terms of the Lease, and any
such failure continues for ten (10) days after the due date thereof; (b) Lessee fails to perform or observe
any of its obligations under Sections 12.1, 14 or 18.1 hereof; (c) Lessee fails to perform or observe any
other covenant, condition or agreement to be performed or observed by it under the Lease and such
failure is not cured within thirty (30) days after receipt of written notice thereof by Lessor; (d) any
statement, representation or warranty made by Lessee in the Lease or in any writing delivered by Lessee
pursuant thereto or in connection therewith proves at any time to have been false, misleading or
erroneous in any material respect as of the time when made; (e) Lessee applies for or consents to the
appointment of a receiver, trustee, conservator or liquidator of Lessee or of all or a substantial part of its
assets, or a petition for relief is filed by Lessee under any federal or state bankruptcy, insolvency or
similar law, or a petition in a proceeding under any federal or state bankruptcy, insolvency or similar law is
filed against Lessee and is not dismissed within sixty (60) days thereafter; or (f) Lessee shall be in default
under any other Lease or under any other financing agreement executed at any time with Lessor.
20. REMEDIES. If any Event of Default occurs, then Lessor may, at its option, exercise any one or more
of the following remedies:
Attachment 1
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(a) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all amounts then
currently due under all Leases and all remaining Rent Payments due under all Leases during the fiscal
year in effect when the default occurs together with interest on such amounts at the highest lawful rate
from the date of Lessor’s demand for such payment.
(b) Lessor may require Lessee to promptly return all Equipment to Lessor in the manner set forth
in Section 21 (and Lessee agrees that it shall so return the Equipment), or Lessor may, at its option, enter
upon the premises where any Equipment is located and repossess such Equipment without demand or
notice, without any court order or other process of law and without liability for any damage occasioned by
such repossession;
(c) Lessor may sell, lease or otherwise dispose of any Equipment, in whole or in part, in one or
more public or private transactions, and if Lessor so disposes of any Equipment, then Lessor shall retain
the entire proceeds of such disposition free of any claims of Lessee, provided, that the net proceeds of
any such disposition shall be applied to amounts payable by Lessee under clause (a) above of this
Section only to the extent that such net proceeds exceed the applicable Termination Value set forth in the
applicable Schedule A-1;
(d) Lessor may terminate, cancel or rescind any Lease as to any and all Equipment;
(e) Lessor may exercise any other right, remedy or privilege which may be available to Lessor
under applicable law or, by appropriate court action at law or in equity, Lessor may enforce any of
Lessee’s obligations under any Lease; and/or
(f) Lessor may require Lessee to pay (and Lessee agrees that it shall pay) all out-of-pocket costs
and expenses incurred by Lessor as a result (directly or indirectly) of the Event of Default and/or of
Lessor’s actions under this section, including, without limitation, any attorney fees and expenses and any
costs related to the repossession, safekeeping, storage, repair, reconditioning or disposition of any
Equipment.
None of the above remedies is exclusive, but each is cumulative and in addition to any other remedy
available to Lessor. Lessor’s exercise of one or more remedies shall not preclude its exercise of any
other remedy. No delay or failure on the part of Lessor to exercise any remedy under any Lease shall
operate as a waiver thereof, nor as an acquiescence in any default, nor shall any single or partial exercise
of any remedy preclude any other exercise thereof or the exercise of any other remedy.
21. RETURN OF EQUIPMENT. If Lessor is entitled under the provisions of any Lease, including any
termination thereof pursuant to Sections 6 or 20 of this Master Lease, to obtain possession of any
Equipment or if Lessee is obligated at any time to return any Equipment, then (a) title to the Equipment
shall vest in Lessor immediately upon Lessors notice thereof to Lessee, and (b) Lessee shall, at its sole
expense and risk, immediately de-install, disassemble, pack, crate, insure and return the Equipment to
Lessor (all in accordance with applicable industry standards) at any location in the continental United
States selected by Lessor. Such Equipment shall be in the same condition as when received by Lessee
(reasonable wear, tear and depreciation resulting from normal and proper use excepted), shall be in good
operating order and maintenance as required by the applicable Lease, shall be free and clear of any
Liens (except Lessor’s Lien) and shall comply with all applicable laws and regulations. Until Equipment is
returned as required above, all terms of the applicable Lease shall remain in full force and effect
including, without limitation, obligations to pay Rent Payments and to insure the Equipment. Lessee
agrees to execute and deliver to Lessor all documents reasonably requested by Lessor to evidence the
transfer of legal and beneficial title to such Equipment to Lessor and to evidence the termination of
Lessee’s interest in such Equipment.
22. LAW GOVERNING. Each Lease shall be governed by the laws of the state of the lessee (The
“State”).
23. NOTICES. All notices to be given under any Lease shall be made in writing and either personally
delivered or mailed by certified mail to the other party at its address set forth herein or at such address as
the party may provide in writing from time to time. Any such notices shall be deemed to have been
received five (5) days subsequent to mailing if sent by regular or certified mail, or on the next business
Attachment 1
C7 - 12
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day if sent by overnight courier, or on the day of delivery if delivered personally.
24. FINANCIAL INFORMATION; INDEMNITY; POWER OF ATTORNEY. Within thirty (30) days of their
completion in each fiscal year of Lessee during any Lease Term, Lessee will deliver to Lessor upon
Lessor’s request the publicly available annual financial information of Lessee. To the extent permitted by
law, Lessee shall indemnify, hold harmless and, if Lessor requests, defend Lessor and its shareholders,
affiliates, employees, dealers and agents against all Claims directly or indirectly arising out of or
connected with (a) the manufacture, installation, use, lease, possession or delivery of the Equipment, (b)
any defects in the Equipment, any wrongful act or omission of Lessee, or its employees and agents, or (c)
any claims of alleged breach by Lessee of this Master Lease or any related document. “Claims” means
all losses, liabilities, damages, penalties, expenses (including attorney’s fees and costs), claims, actions
and suits, whether in contract, tort or otherwise. Lessee hereby appoints Lessor its true and lawful
attorney-in-fact (with full power of substitution) to prepare any instrument, certificate of title or financing
statement covering the Equipment or otherwise protecting Lessor’s interest in the Equipment, to sign
Lessee’s name with the same force and effect as if signed by Lessee, and to file same at the proper
location(s); and make claims for, receive payment of, and execute and endorse all documents, checks or
drafts for loss, theft, damage or destruction to the Equipment under any insurance.
25. ANTI-MONEY LAUNDERING/INTERNATIONAL TRADE LAW COMPLIANCE.
Lessee represents and warrants to Lessor, as of the date of this Master Lease, the date of each
advance of proceeds pursuant to this Master Lease, the date of any renewal, extension or modification of
this Master Lease or any Lease, and at all times until this Master Lease and each Lease has been
terminated and all amounts thereunder have been indefeasibly paid in full, that: (a) no Covered Entity (i)
is a Sanctioned Person; (ii) has any of its assets in a Sanctioned Country or in the possession, custody or
control of a Sanctioned Person; or (iii) does business in or with, or derives any of its operating income
from investments in or transactions with, any Sanctioned Country or Sanctioned Person in violation of any
law, regulation, order or directive enforced by any Compliance Authority; (b) the proceeds of any Lease
will not be used to fund any operations in, finance any investments or activities in, or, make any payments
to, a Sanctioned Country or Sanctioned Person in violation of any law, regulation, order or directive
enforced by any Compliance Authority; (c) the funds used to repay any Lease are not derived from any
unlawful activity; and (d) each Covered Entity is in compliance with, and no Covered Entity engages in
any dealings or transactions prohibited by, any laws of the United States, including but not limited to any
Anti-Terrorism Laws. Lessee covenants and agrees that it shall immediately notify Lessor in writing upon
the occurrence of a Reportable Compliance Event.
As used herein: “Anti-Terrorism Laws” means any laws relating to terrorism, trade sanctions
programs and embargoes, import/export licensing, money laundering, or bribery, all as amended,
supplemented or replaced from time to time; “Compliance Authority” means each and all of the (a) U.S.
Treasury Department/Office of Foreign Assets Control, (b) U.S. Treasury Department/Financial Crimes
Enforcement Network, (c) U.S. State Department/Directorate of Defense Trade Controls, (d) U.S.
Commerce Department/Bureau of Industry and Security, (e) U.S. Internal Revenue Service, (f) U.S.
Justice Department, and (g) U.S. Securities and Exchange Commission; “Covered Entity” means Lessee,
its affiliates and subsidiaries, all guarantors, pledgors of collateral, all owners of the foregoing, and all
brokers or other agents of Lessee acting in any capacity in connection with this Master Lease or any
Lease; “Reportable Compliance Event” means that any Covered Entity becomes a Sanctioned Person, or
is indicted, arraigned, investigated or custodially detained, or receives an inquiry from regulatory or law
enforcement officials, in connection with any Anti-Terrorism Law or any predicate crime to any Anti-
Terrorism Law, or self-discovers facts or circumstances implicating any aspect of its operations with the
actual or possible violation of any Anti-Terrorism Law; “Sanctioned Country” means a country subject to a
sanctions program maintained by any Compliance Authority; and “Sanctioned Person” means any
individual person, group, regime, entity or thing listed or otherwise recognized as a specially designated,
prohibited, sanctioned or debarred person or entity, or subject to any limitations or prohibitions (including
but not limited to the blocking of property or rejection of transactions), under any order or directive of any
Compliance Authority or otherwise subject to, or specially designated under, any sanctions program
maintained by any Compliance Authority.
26. USA PATRIOT ACT NOTICE.
To help the government fight the funding of terrorism and money laundering activities, Federal law requires
Attachment 1
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all financial institutions to obtain, verify and record information that identifies each lessee that opens an
account. What this means: when Lessee opens an account, Lessor will ask for the business name,
business address, taxpayer identifying number and other information that will allow Lessor to identify
Lessee, such as organizational documents. For some businesses and organizations, Lessor may also need
to ask for identifying information and documentation relating to certain individuals associated with the
business or organization.
27. SECTION HEADINGS. All section headings contained herein or in any Schedule are for convenience
of reference only and do not define or limit the scope of any provision of any Lease.
28. EXECUTION IN COUNTERPARTS. Each Schedule to this Master Lease may be executed in
several counterparts, each of which shall be deemed an original, but all of which shall be deemed one
instrument. Only one counterpart of each Schedule shall be marked “Lessor’s Original” and all other
counterparts shall be deemed duplicates. An assignment of or security interest in any Schedule may be
created through transfer and possession only of the counterpart marked “Lessor’s Original.”
29. ENTIRE AGREEMENT; WRITTEN AMENDMENTS. Each Lease, together with the exhibits
attached thereto and made a part hereof and other attachments thereto, and other documents or
instruments executed by Lessee and Lessor in connection therewith, constitute the entire agreement
between the parties with respect to the lease of the Equipment covered thereby, and such Lease shall not
be modified, amended, altered, or changed except with the written consent of Lessee and Lessor. Any
provision of any Lease found to be prohibited by law shall be ineffective to the extent of such prohibition
without invalidating the remainder of the Lease.
City of San Luis Obispo
(“Lessee”)
By:
Title:
990 Palm Street
San Luis Obispo, CA 93401
Oshkosh Capital
(“Lessor”)
By:
Title
155 East Broad Street, B4-B230-05-7
Columbus, OH 43215
Attachment 1
C7 - 14
LEASE SCHEDULE NO. 177998000
Dated As Of November 11, 2013
This Lease Schedule (this “Schedule”) is attached and made a part of the Master Lease-Purchase
Agreement referenced below, together with all exhibits, schedules, addenda, and other attachments thereto,
executed by Lessee and Lessor (the “Lease”). Unless otherwise defined herein, capitalized terms will have the
same meaning ascribed to them in the Master Lease. All terms and conditions of the Master Lease are
incorporated herein by reference. To the extent that there is any conflict between the terms of the Lease and
this Schedule, the terms of this Schedule shall control.
Master Lease-Purchase Agreement dated November 11, 2013
1. EQUIPMENT DESCRIPTION. As used in the Lease, “Equipment” means all of the property described in
Schedule A-1 attached to this Schedule and all attachments, additions, accessions, parts, repairs,
improvements, replacements and substitutions thereto.
2. RENTAL PAYMENTS; LEASE TERM. The Rental Payments to be paid by the Lessee to Lessor, the
commencement date thereof and the lease term of this Lease Schedule are set forth on the Schedule A-1
attached to this Lease Schedule.
3. ESSENTIAL USE; CURRENT INTENT OF LESSEE. Lessee represents that the use of the Equipment is
essential to Lessee’s proper, efficient and economic functioning or to the services that Lessee provides to its
citizens and the Equipment will be used by Lessee only for the purpose of performing its governmental or
proprietary functions consistent with the permissible scope of its authority. Lessee currently intends for the
full Lease Term: to use the Equipment; to continue this Lease; and (if applicable) to make Rent Payments if
funds are appropriated in each fiscal year by its governing body.
4. ACCEPTANCE OF EQUIPMENT. AS BETWEEN LESSEE AND LESSOR, LESSEE AGREES THAT (A)
LESSEE HAS RECEIVED AND INSPECTED ALL EQUIPMENT; (B) ALL EQUIPMENT IS IN GOOD
WORKING ORDER AND COMPLIES WITH ALL PURCHASE ORDERS, CONTRACTS AND
SPECIFICATIONS; (C) LESSEE ACCEPTS ALL EQUIPMENT FOR PURPOSES OF THE LEASE “AS-IS,
WHERE IS”; AND (D) LESSEE WAIVES ANY RIGHT TO REVOKE SUCH ACCEPTANCE.
5. BANK QUALIFIED. LESSEE CERTIFIES THAT IT HAS DESIGNATED THIS LEASE AS A QUALIFIED
TAX-EXEMPT OBLIGATION IN ACCORDANCE WITH SECTION 265(b)(3) OF THE CODE, THAT IT HAS
NOT DESIGNATED MORE THAN $10,000,000 OF ITS OBLIGATIONS AS QUALIFIED TAX-EXEMPT
OBLIGATIONS IN ACCORDANCE WITH SUCH SECTION FOR THE CURRENT CALENDAR YEAR AND
THAT IT REASONABLY ANTICIPATES THAT THE TOTAL AMOUNT OF TAX-EXEMPT OBLIGATIONS
TO BE ISSUED BY LESSEE DURING THE CURRENT CALENDAR YEAR WILL NOT EXCEED
$10,000,000.
6. RE-AFFIRMATION OF THE MASTER LEASE-PURCHASE AGREEMENT. Lessee hereby re-affirms all of
its representations, warranties and obligations under the Master Lease Purchase Agreement (including,
without limitation, its obligation to pay all Rental Payments, its disclaimers in Section 7 thereof and its
representations in Section 6.1 and 16 thereof).
City of San Luis Obispo
(“Lessee”)
Oshkosh Capital
(“Lessor”)
By: By:
Title:
Title:
Attachment 1
C7 - 15
Schedule A-1
1. EQUIPMENT LOCATION & DESCRIPTION:
City of San Luis Obispo
1395 Madonna Road
San Luis Obispo, CA 93405
San Luis Obispo County
2014 Pierce Arrow PUC XT
VIN #
2. LEASE PAYMENT SCHEDULE.
(a) Accrual Date: November 11, 2013
(b) Amount Financed:
i.
Equipment Purchase Price
Sales Tax
Performance Bond
$522,189.00
$40,517.00
$1,367.00
ii. Purchase Price Dedution (Down payment Pierce) $0.00
Prepay Discounts $15,722.00
Trade In $0.00
iii. Total Amount Financed (Cash Sale Price minus
Purchase Price Deductions) $548,351.00
Attachment 1
C7 - 16
E28
(c) Payment Schedule:
Accural Date: November 11, 2013
Rent Payment
Number
Rent Payment
Date
Rent Payment
Amount
Interest
Portion Principal Portion Termination
Value
1 7/11/2014 116,701.97 8,652.83 108,049.14 453,510.92
2 7/11/2015 116,701.97 10,479.19 106,222.78 344,101.45
3 7/11/2016 116,701.97 7,951.08 108,750.89 232,088.04
4 7/11/2017 116,701.97 5,362.81 111,339.16 117,408.70
5 7/11/2018 116,701.97 2,712.94 113,989.03 1.00
City of San Luis Obispo Oshkosh Capital
(“Lessee”) (“Lessor”)
By: By:
Title: Title:
Attachment 1
C7 - 17
VEHICLE SCHEDULE ADDENDUM
Dated As Of November 11, 2013
Lease Schedule No. 177998000 Dated November 11, 2013
Lessee: City of San Luis Obispo
Reference is made to the above Lease Schedule (“Schedule”) to the Master Lease-Purchase
Agreement identified in the Lease Schedule (“Master Lease”) by and between Oshkosh Capital (“Lessor”)
and the above Lessee (“Lessee”). This Addendum amends and modifies the terms and conditions of the
Schedule and is hereby made a part of the Schedule. Unless otherwise defined herein, capitalized terms
defined in the Master Lease shall have the same meaning when used herein.
NOW THEREFORE, as part of the valuable consideration to induce the execution of the
Schedule, Lessor and Lessee hereby agree to amend the Schedule as follows:
1. In the event that any unit of Equipment covered by the Schedule is a vehicle or trailer under
applicable State law, then the following provisions shall also apply to the Schedule to the extent permitted
by law,
(a) each manufacturer’s statement of origin and certificate of title shall state that Lessor has the
first and sole lien on or security interest in such unit of Equipment;
(b) the public liability and property damage insurance required by the terms of the paragraph titled
“Insurance in the Master Lease shall be in an amount not less than $1,000,000.00 per person insured and
$2,000,000.00 combined single limit per unit per occurrence (provided, that if the unit of Equipment is a
bus or other passenger vehicle, then such insurance amount shall be such larger amount as may be
reasonably required by Lessor) and $1,000,000.00 for damage to property of others;
(c) Lessee shall furnish and permit only duly licensed, trained, safe and qualified drivers to
operate any such unit of Equipment, and such drivers shall be agents of Lessee and shall not be agents
of Lessor; and
(d) Lessee shall cause each such unit of Equipment to be duly registered and licensed as
required by applicable State law with Lessor noted as lien holder and Lessee as owner.
2. Except as expressly amended by this Addendum and other modifications signed by Lessor,
the Schedule remains unchanged and in full force and effect.
IN WITNESS WHEREOF, the parties hereto have executed this Addendum as of the date first referenced
above.
City of San Luis Obispo Oshkosh Capital
(“Lessee”) (“Lessor”)
By: By:
Title: Title:
Attachment 1
C7 - 18
RESOLUTION
Municipality/Lessee: City of San Luis Obispo
Principal Amount Expected To Be Financed: $548,351.00
WHEREAS, the Municipality is a political subdivision of the State in which Municipality is located (the
“State”) and is duly organized and existing pursuant to the Constitution and laws of the State.
WHEREAS, pursuant to applicable law, the governing body of the Municipality (“Governing Body”) is
authorized to acquire, dispose of 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
Municipality.
WHEREAS, the Governing Body hereby finds and determines that the execution of one or more Master
Lease-Purchase Agreements (“Leases”) in the principal amount not exceeding the amount stated above
for the purpose of acquiring the property (“Equipment”) to be described in the Leases is appropriate and
necessary to the functions and operations of the Municipality.
WHEREAS, Oshkosh Capital (“Lessor”) shall act as Lessor under said Leases.
NOW, THEREFORE, Be It Ordained by the Governing Body of the Municipality:
Section 1. Either one of the _______________________ OR _______________________ (each an
“Authorized Representative”) acting on behalf of the Municipality, is hereby authorized to negotiate, enter
into, execute, and deliver one or more Leases in substantially the form set forth in the document presently
before the Governing Body, which document is available for public inspection at the office of the
Municipality. Each Authorized Representative acting on behalf of the Municipality is hereby authorized to
negotiate, enter into, execute, and deliver such other documents relating to the Lease as the Authorized
Representative deems necessary and appropriate. All other related contracts and agreements necessary
and incidental to the Leases are hereby authorized.
Section 2. By a written instrument signed by any Authorized Representative, said Authorized
Representative may designate specifically identified officers or employees of the Municipality to execute
and deliver agreements and documents relating to the Leases on behalf of the Municipality.
Section 3. The aggregate original principal amount of the Leases shall not exceed the amount stated
above and shall bear interest as set forth in the Leases and the Leases shall contain such options to
purchase by the Municipality as set forth therein.
Section 4. The Municipality’s obligations under the Leases shall be subject to annual appropriation or
renewal by the Governing Body as set forth in each Lease and the Municipality’s obligations under the
Leases shall not constitute general obligations of the Municipality or indebtedness under the Constitution
or laws of the State.
Section 5. As to each Lease, the Municipality reasonably anticipates to issue not more than $10,000,000
of tax-exempt obligations (other than “private activity bonds” which are not “qualified 501(c)(3) bonds”)
during the current calendar year in which each such Lease is issued and hereby designates each Lease
as a qualified tax-exempt obligation for purposes of Section 265(b) of the Internal Revenue Code of 1986,
as amended.
Attachment 1
C7 - 19
E24
6
001.1145120.3
Section 6. This resolution shall take effect immediately upon its adoption and approval.
ADOPTED AND APPROVED on this ________________, 2013.
The undersigned Secretary/Clerk of the above-named Municipality hereby certifies and attests that the
undersigned has access to the official records of the Governing Body of the Municipality, that the
foregoing resolutions were duly adopted by said Governing Body of the Municipality at a meeting of said
Governing Body and that such resolutions have not been amended or altered and are in full force and
effect on the date stated below.
LESSEE: City of San Luis Obispo
_____________________________________________ [SEAL]
Signature of Secretary/Clerk of Municipality
Print Name: ___________________________________
Official Title: ___________________________________
Date: _______________________________________
Attachment 1
C7 - 20
CERTIFICATE OF INCUMBENCY
Lessee: City of San Luis Obispo
Lease Schedule No.: 177998000 Dated: November 11, 2013
I, the undersigned Secretary/Clerk identified below, do hereby certify that I am the duly elected or
appointed and acting Secretary/Clerk of the above Lessee (the “Lessee”), a political subdivision duly
organized and existing under the laws of the State where Lessee is located, that I have the title stated
below, and that, as of the date hereof, the individuals named below are the duly elected or appointed
officers of the Lessee holding the offices set forth opposite their respective names.
[NOTE: Use same titles as Authorized Representatives stated in Resolutions.]
_________________________
Name
_________________________
Title
________________________
Signature
_________________________
Name
_________________________
Title
________________________
Signature
IN WITNESS WHEREOF, I have duly executed this certificate and affixed the seal of such
Lessee as of the date set forth below.
_____________________________________________ [SEAL]
Signature of Secretary/Clerk of Lessee
Print Name: ___________________________________
Official Title: ___________________________________
Date: ________________________________________
Attachment 1
C7 - 21
E34
FORM OF OPINION OF COUNSEL
(To Be Typed on Attorney’s Letterhead Stationary)
Date:
Lessee: City of San Luis Obispo
Lessor: Oshkosh Capital
Re: Lease Schedule No. 177998000 dated November 11, 2013, together with its Master Lease-
Purchase Agreement dated November 11, 2013, by and between the above-named Lessee and
the above-named Lessor
Gentlemen:
I have acted as counsel to Lessee with respect to the Lease Schedule, the Master Lease-Purchase
Agreement and all other agreements described above or related thereto (collectively, the “Agreements”) and various
related matters, and in this capacity have reviewed a duplicate original or certified copy of the Agreements and such
other documents as I have deemed necessary for the purposes of this opinion.
Based upon the examination of such documents, it is my opinion that:
1. Lessee is a political subdivision of the State of California (the “State”) duly organized, existing and operating
under the Constitution and laws of the State.
2. Lessee is authorized and has power under State law to enter into all of the Agreements, and to carry out its
obligations thereunder and the transactions contemplated thereby.
3. The Agreements and all other documents related thereto have been duly authorized, approved, and executed by
and on behalf of Lessee, and each of the Agreements is a valid and binding contract of Lessee enforceable in
accordance with its terms, except to the extent limited by State and Federal law affecting creditor’s remedies and
by bankruptcy, reorganization or other laws of general application relating to or affecting the enforcement of
creditors’ rights.
4. The authorization, approval and execution of the Agreements and all other proceedings of Lessee relating to the
transactions contemplated thereby have been performed in accordance with all applicable Local, State and
Federal laws (including open meeting laws and public bidding and property acquisition laws).
5. To the best of my knowledge, there is no litigation or proceeding pending before any court, administrative agency
or governmental body, that challenges: the organization or existence of Lessee; the authority of its officers; the
proper authorization; approval and execution of any of the Agreements or any documents relating thereto; the
appropriation of monies to make payments under the Agreements for the current fiscal year; or the ability of
Lessee otherwise to perform its obligations under the Agreements and the transactions contemplated thereby.
6. Lessee is a political subdivision of the State as referred to in Section 103 of the Internal Revenue Code of 1986,
as amended, and the related regulations and rulings thereunder.
Lessor, its Assignee and any of their assigns may rely upon this opinion.
Very truly yours,
Attorney
Attachment 1
C7 - 22
I01
INSURANCE COVERAGE DISCLOSURE
Oshkosh Capital, LESSOR
City of San Luis Obispo, LESSEE
RE: INSURANCE COVERAGE REQUIREMENTS
1. In accordance with the Lease Schedule (“Schedule”) to the Master Lease-Purchase Agreement
identified in the Lease Schedule (“Master Lease”), Lessee certifies that it has instructed the insurance
agent named below (please fill in name, address, and telephone number):
to issue: (check to indicate coverage)
a. All Risk Physical Damage Insurance on the leased Equipment evidenced by a Certificate of Insurance
and Long Form Loss Payable Clause naming Oshkosh Capital and/or its assigns as Loss Payee.
Coverage Required: Termination Value Specified
b. Public Liability Insurance evidenced by a Certificate of Insurance naming Oshkosh Capital and/or its
assigns as an Additional Insured.
Minimum Coverage Required:
$1,000,000.00 per person
$2,000,000.00 aggregate bodily injury liability
$1,000,000.00 property damage liability
Proof of insurance coverage will be provided to Oshkosh Capital, 155 East Broad Street, B4-B230-05-7,
Columbus, OH 43215, prior to the time that the property is delivered to Lessee.
OR
2. Pursuant to the Master Lease, Lessee represents and warrants, in addition to other matters under the
Agreement, that it is lawfully self-insured for: (check to indicate coverage)
a. All risk, physical damage in the amount specified in 1(a) above.
b. Public liability for not less than the amounts specified in 1(b) above.
Lessee has attached a signed letter describing self-insurance.
LESSEE: City of San Louis Obispo
By: _________________________________ Title: ___________________________________
Attachment 1
C7 - 23
INSURANCE INFORMATION
Please provide the following information to your insurance company to help
expedite receipt of the necessary coverage:
ITEMS WHICH NEED TO BE REFLECTED ON INSURANCE CERTIFICATE:
• Oshkosh Capital must be named Lender Loss Payee and Additional
Insured
• 30 Days Notice of Cancellation
• Not Less than $2,000,000.00 limits on liability
• Certificate must reflect a short equipment description
• Certificate must reflect an expiration date
Certificate Holder Information:
Oshkosh Capital, its successors and/or all assigns
155 East Broad Street, B4-B230-05-7
Columbus, OH 43215
Please send a FAX copy of certificate to Cheryl Kennedy at 1-800-678-0602.
The original should be mailed to the same at:
Oshkosh Capital
155 East Broad Street, B4-B230-05-7
Columbus, OH 43215
Please call Cheryl Kennedy at 1-800-820-9041, ext. 4, if you have any questions.
Attachment 1
C7 - 24
THREE PARTY AGREEMENT
Dated as of November 11, 2013
“Lessee” means City of San Luis Obispo
“Schedule” means Lease Schedule No. 177998000 Dated November 11, 2013, together with its Schedule
A-1.
Reference is made to the Lease Schedule (“Schedule”) and to the Master Lease-Purchase
Agreement (“Master Lease”) identified in said Lease Schedule, described above between Oshkosh
Capital (“Lessor”) and the Lessee identified above which relates to Equipment described in Schedule A-1
to the Lease Schedule attached therein (“Equipment”) to be supplied by Pierce Manufacturing Inc.
(“Supplier”). For good and valuable consideration, receipt of which is hereby acknowledged, Lessee,
Lessor and Supplier hereby agree as follows:
1. Notwithstanding anything to the contrary in the Lease Schedule, Lessee hereby notifies Lessor that
the Equipment has not yet been delivered to Lessee and the Equipment has not yet been accepted by
Lessee for purposes of the Lease Schedule. Lessee agrees to execute and deliver to Lessor a Delivery
and Acceptance Certificate in the form attached hereto as Exhibit A upon the circumstances set forth in
said Certificate.
2. All parties hereto agree that the Purchase Price of the Equipment shall be as set forth below if said
Purchase Price is paid on or before the Advance Payment Date set forth below:
Purchase Price:
Sales Tax
PerformanceBond
$522,189.00
$40,517.00
$1,367.00
Vendor Discounts: $15,722.00
Advance Payment Date: November 11, 2013
3. Upon execution of the Lease Schedule and delivery of all documents relating thereto required by
Lessor, Lessee agrees that it shall pay the Lessee Down Payment stated below and Lessor agrees that it
shall pay the balance of the Purchase Price (the “Amount Financed”) stated below. Lessee agrees that
the Lease Term and Lessee’s obligation to pay Rent Payments shall commence on the date set forth in
the Lease Schedule notwithstanding the delivery of the Equipment at a later date.
Lessee Down Payment: $0.00
Trade In:
Amount Financed:
$0.00
$548,351.00
4. (a) Supplier anticipates that it shall deliver the Equipment to Lessee by the Anticipated Delivery
Date set forth below.
Anticipated Delivery Date: July 11, 2014
(b) Supplier hereby agrees that it shall deliver the Equipment to Lessee no later than the Outside
Delivery Date set forth below and that such Equipment shall comply with all specifications and
requirements of Lessee and with the terms and conditions of any purchase order/purchase
agreement relating thereto.
Outside Delivery Date: August 11, 2014
5. If for any reason whatsoever Supplier fails to comply with its agreements set forth in subparagraph
Attachment 1
C7 - 25
4(b) of this Agreement by the Outside Delivery Date for any piece of Equipment (the “Delayed
Equipment”), and the Lessee has not agreed to revise the Outside Delivery Date with respect to such
Delayed Equipment, then Supplier hereby agrees as follows only for the Delayed Equipment:
(a) On the first business day after the Outside Delivery Date, Supplier shall pay to Lessee the Lessee
Down Payment for the Delayed Equipment plus interest at the Prime Rate plus one percent (1%)
per annum from the Advance Payment Date to the date of such payment;
(b) On the first business day after the Outside Delivery Date, Supplier shall pay to Lessor for the
Delayed Equipment the Amount Financed plus interest at the Prime Rate plus one percent (1%)
per annum from the Advance Payment Date to the date of such payment; and
(c) “Prime Rate” means the prime rate of interest as published from time to time in the Wall Street
Journal.
If there is more than one piece of Equipment subject to the Lease, and some of the Equipment is
delivered in accordance with subparagraph 4(b) of this Agreement, the payments owed pursuant to the
Lease shall be modified to reflect only the obligations due on the Equipment that was delivered pursuant
to subparagraph 4(b) of this Agreement. The new payment obligation will be determined based on the
amount financed for the Equipment delivered to the Lessee, and based on the interest rate in effect as of
the date of Lease commencement.
6. If Supplier makes the payments described in paragraph 5 above for the Delayed Equipment under
the circumstances set forth above and if Lessee has otherwise paid and performed its obligations under
the Lease Schedule as of such payment date for the Delayed Equipment, then Lessee and Lessor agree
that the Lease Schedule shall terminate as of the date of such payments by Supplier as to the Delayed
Equipment only. Lessee’s obligations shall continue unabated for the Equipment that was delivered
pursuant to subparagraph 4(b) of this Agreement.
7. Supplier agrees that a Performance Bond will be issued which names the Supplier as Principal, the
Lessee as Obligee and the Lessor as Additional Obligee. This Performance Bond will apply solely to the
terms and conditions of the purchase order/purchase agreement, including related equipment
specifications and warranties, as issued by the lessee and accepted by the Supplier. The “Contract
Date” referred to in the Performance Bond shall be the date of the Three Party Agreement. Except as
expressly set forth herein, the Lease Schedule and the terms and conditions of the purchase
order/purchase agreement for the equipment remain unchanged and in full force and effect.
8. Except as expressly set forth herein, the Lease Schedule and terms and conditions of the purchase
order/purchase agreement for the Equipment remain unchanged and in full force and effect.
IN WITNESS WHEREOF, the duly authorized officers of the parties set forth below hereby
execute and deliver this Agreement as of the date first written above.
City of San Luis Obispo Oshkosh Capital
(“Lessee”) (“Lessor”)
By: By:
Title: Title:
Pierce Manufacturing Inc.
(“Supplier”)
By:
Title:
Attachment 1
C7 - 26
E28
Exhibit A
DELIVERY & ACCEPTANCE CERTIFICATE
Lease Schedule No. 177998000
Reference is made to the above Lease Schedule (“Schedule”), which has been executed and
delivered by the undersigned Lessee (“Lessee”) and Oshkosh Capital (“Lessor”). This Certificate amends
and supplements the terms and conditions of the Lease Schedule and is hereby made a part of the Lease
Schedule. Unless otherwise defined herein, capitalized terms defined in the Master Lease-Purchase
Agreement and the Lease Schedule shall have the same meaning when used herein; provided, that
“Equipment” shall mean the Equipment described in the Schedule A-1 and in any attachment or exhibit to
this Certificate.
Notwithstanding anything to the contrary, expressed or implied, in the Lease Schedule or its
Schedule A-1, Lessee agrees as follows:
1. ACCEPTANCE OF EQUIPMENT. As of the Acceptance Date stated below and as between Lessee
and Lessor, Lessee hereby agrees that: (a) Lessee has received and inspected all Equipment; (b) all
Equipment is in good working order and complies with all purchase orders, contracts and
specifications; (c) Lessee accepts all Equipment for purposes of the Lease “as-is, where-is”; and (d)
Lessee waives any right to revoke such acceptance.
ACCEPTANCE DATE:
2. RENT PAYMENTS. Lessee hereby agrees that Lessee will pay the Rent Payments for the
Equipment in the amounts and on the dates specified in Schedule A-1 to the Lease Schedule.
City of San Luis Obispo
(“Lessee”)
By: __________________________________
Title: __________________________________
Attachment 1
C7 - 27
E28
OSHKOSH CAPITAL
INFORMATION REQUEST
LESSEE NAME: City of San Luis Obispo _________________________
FEDERAL TAX I.D. # ___________________________________________
BILLING ADDRESS:
________________________________________________________________________
Billing Contact
________________________________________________________________________
Street Address or Post Office Box
________________________________________________________________________
City, State and Zip
_____________________________________________________________________________________
Phone Number Fax Number
PHYSICAL ADDRESS (IF DIFFERENT):
________________________________________________________________________
Street Address or Post Office Box
________________________________________________________________________
City, State and Zip
Require Board Approval for Payments? _______ Yes _______ No
Board Meeting Date? ___________________
Require signed vouchers for payments? _______ Yes _______ No
We typically mail our invoices 30 days in advance. Taking into account a 7-day mail period, do you foresee any problem
that would prevent the payment from being received on or before the due date?
______ Yes _______ No
Please list any special instructions below:
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
Attachment 1
C7 - 28
SOUTH COAST FIRE EQUIPMENT
2020 SOUTH BAKER AVENUE
ONTARIO CA 91761
10/24/13
CARY ECKARD
Send copy to vendor with any attachments
City of San Luis Obispo
Date
VENDOR
ADDRESS
AmountDescriptionDateNumber
Quote
Account #
X
Vendor #PURCHASE ORDER
PURCHASE ORDER NO.
Bus: 661-399-3132
Fax: - -
Do not send to vendor
CITY OF SAN LUIS OBISPO
SAN LUIS OBISPO, CA 93401
SHIP TO
ADDRESS
Bus:
Fax:
Purchase of a Fire Engine, per consultant's quote
dated DATE, 2013, Specification No. 91277.
548,351.00 / /09/11/2013 91277
548,351.00TOTAL
Requesting Department Prepared By Dept Approval
RBETZ
Finance/Administration Approval
Verified By
Instructions:
Department: Complete form and obtain departmental approval. Attach quotes, bid summaries,
or CAO report as required by purchasing guidelines). Route to Finance or Admin for approval.
Finance: After final approval, assign PO number and return copy to department. Process encumbrance.
ACCOUNTING USE ONLY
Attachment 2
C7 - 29
Attachment 3
RESOLUTION NO.
RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN
LUIS OBISPO APPROVING THE LEASE PURCHASE OF A FIRE
ENGINE FROM OSHKOSH CAPITAL AND APPROVING THE
FINAL FORM OF FINANCING DOCUMENTS AND OFFICIAL
ACTIONS
WHEREAS, the City of San Luis Obispo (the “City”) is a political subdivision of
the State of California and is duly organized and existing pursuant to the Constitution
and laws of the State; and
WHEREAS, the City of San Luis Obispo (the “City”) maintains a fire protection
service which includes rolling stock equipment which must be replaced from time to time;
and
WHEREAS, pursuant to applicable law, the City of San Luis Obispo may
acquire, dispose of 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; and
WHEREAS, the City Council has considered a Lease Purchase Financing
proposal offered by Oshkosh Capital and desires to authorize the execution of the lease
in the amount of $548,351.00; and
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 City Council of the City of San
Luis Obispo as follows:
SECTION 1. Approval of Lease Purchase Financing Proposal. The City Council
hereby approves the Lease Purchase of a 2014 Pierce Arrow PUC XT fire engine from
Oshkosh Capital in the not to exceed amount of $548,351.00 in accordance with the
Lender Financing Proposal in the form on file with the City Clerk.
SECTION 2. The City’s obligations under the Lease shall be subject to annual
appropriation or renewal by the City Council as set forth in the Lease and the
Municipality’s obligations under the Lease shall not constitute general obligations of the
Municipality or indebtedness under the Constitution or laws of the State.
SECTION 3. Master Lease Purchase Agreement. The City Council hereby
approves the Master Lease Purchase Agreement relating to the financing of the fire
engine, between the City and Oshkosh Capital in the form thereof on file with the City
Clerk together with any changes therein or additions thereto deemed advisable by an
Authorized Officer; provided that the execution thereof by an Authorized Officer shall be
conclusive evidence of the approval of any such changes or additions. An Authorized
C7 - 30
Attachment 3
Officer is hereby authorized and directed for and in the name and on behalf of the City to
execute, and the City Clerk is hereby authorized and directed to attest, the final form of
the Installment Sale Agreement.
SECTION 4. Official Actions. The Mayor, the City Manager, the Director of
Finance and Information Technology, the City Clerk and all other officers of the City 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 is authorized to execute or countersign any document
or take any 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.
SECTION 5. As to the Lease Agreement, the City reasonably anticipates to issue
not more than $10,000,000 of tax-exempt obligations (other than “private activity bonds”
which are not “qualified 501(c)(3) bonds”) during the current calendar year in which the
Lease is issued and hereby designates this Lease as a qualified tax-exempt obligation
for purposes of Section 265(b) of the Internal Revenue Code of 1986, as amended.
SECTION 4. Effective Date. This Resolution shall take effect immediately upon
its passage and adoption.
*********************
C7 - 31
Attachment 3
On motion of ____________________, seconded by ___________________,
and on the following roll call vote:
AYES:
NOES:
ABSENT:
the foregoing Resolution was passed and adopted this 5th day of November, 2013.
Mayor
ATTEST:
City Clerk
APPROVED:
City Manager
APPROVED AS TO FORM:
____________________________________
City Attorney
C7 - 32