HomeMy WebLinkAboutSummary Formc t" . AGENDA ITEM SUMMARY FORM
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FILE ID• 15-01127
i Cp Irl
Date: 09/04/ 2015 Requesting Department: Office of Management and Budget
Commission Meeting Date: 09/2_4/ 2015 District Impacted: All Law Department
Type: Z Resolution ❑ Ordinance ❑ Emergency Ordinance ❑ Discussion Item Matter ID No.
❑ Other
Subject: Financing to fund fleet and police vehicles
Purpose of Item:
It is respectfully requested that the City Commission approve the selection of Santander Bank, N.A. to provide
capital in an estimated amount of $32,000,000.00 for the lease/purchase of approximately 1,000 fleet and police
vehicles, approval to pay the costs of financing, and authorize the City Manager, after consultation with the City
Attorney, to negotiate and execute a Lease Agreement in substantially the attached form.
Background Information:
See attached,
Budget Impact Analysis
NO Is this item related to revenue?
YES Is this item an expenditure? If so, please identify funding source below.
General Account No.-
Special
o:
Special Revenue Account No: N/A
CIP Project No: N/A
NO Is this item funded by Homeland Defense/Neighborhood Improvement Bonds?
Start Up Capital Cost: N/A
Maintenance Cost: N/A
Total Fiscal Impact: $32,000,000.00
Final Approvals
(SIGN AND DATE)
CIP N/A Budg
If using or receiving capital funds
Grants N/A Risk .
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Procurement � � Dept.
Chief 1� 1 "C ty l
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Background Information:
On April 14, 2005, the Miami City Commission approved Resolution R-05-0215 for the Accessing of the
Florida Sheriffs Association (FSA) contract for the purchasing of vehicles, trucks, vans and other
equipment for the City. The City has an immediate need to purchase approximately three hundred (300)
fleet and police vehicles in the new fiscal year beginning October 1, 2015. Thereafter, the City estimates
that within the next several years, the City will need to purchase approximately seven hundred (700)
additional fleet and police vehicles.
On August 3, 2015, the City's Financial Advisor, Public Financial Management, Inc. (PFM), issued a
Request for Proposals to the banking and financial industry consistent with the City's needs to obtain a
means of financing the purchase of approximately 1,000 fleet and police vehicles from FSA, with the
lowest cost of funds based on the current market at the most favorable terms. PFM's solicitation process
resulted in seven (7) responses from various banking and financial institutions. After careful review and
analysis of the bank offers by the City and PFM, it is recommended that Santander Bank, N.A. (Santander)
be approved by the City Commission, as this financial institution provided the most favorable terms and
overall conditions. Upon credit approval, Santander will provide the City of Miami with a committed
credit facility for a period of twelve (12) months subject to annual credit review and approval until the
$32,000,000 is fully utilized.
The differentiating factors presented in Santander's proposal included a combination of the bank's
prepayment language, flexibility in draw schedule, and attractive rates. Santander's prepayment language
allows prepayment on any payment date after the first anniversary with no premium, while most of the
other proposing banks required a premium to be paid if the loan were to be terminated early. Santander's
draw schedule allows for the City to draw down funds at any point in the calendar year, with no minimum
or maximum draws imposed, and no non -usage fees that would penalize the City for having undrawn
balances. Finally, Santander's proposed interest rates were the second -lowest amongst the proposing
banks, with only Chase Equipment providing lower rates. It is important to note that Chase Equipment
only provided for a two-year draw period, wherein the interest rate formula would then reset for an
additional two years, exposing the City to additional risk if the municipal market environment was
unfavorable at that point in the future.
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