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TO: |
Board of Trustees |
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THROUGH: |
Jay Fox, Executive Director |
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FROM: |
William Greene, CFO |
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PRESENTER(S): |
Troy Bingham, Comptroller |
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Randall Larsen, Partner, Gilmore Bell |
TITLE:
title
R2022-12-01 - Resolution Authorizing the Financing of Transit Vehicles through a Master Equipment Lease-Purchase Agreements, and Related Matters
end
AGENDA ITEM TYPE:
Resolution
RECOMMENDATION:
Approve resolution R2022-12-01 authorizing the financing of eligible equipment through a Master Equipment Lease-Purchase Agreement (the “Master Lease”) that includes approving the bid of Banc of America Public Capital Corp, as lessor to the Master Lease, approving a 2022B Schedule to the Master Lease (the “2022B Schedule”), delegating to certain officers the authority to approve the final terms and provisions of the Master Lease and the 2022B Schedule and execution of the same
BACKGROUND:
Staff introduced the idea of a 5-Year contract for lease financing for all buses, cutaways, vanpool vans and non-revenue vehicle fleet at the September 14, 2022 Board of Trustee meeting as a pre-procurement item. UTA has been leasing buses, cutaways and vanpool vans since 2015.
Previously UTA entered into single year lease agreements for the purchases of vehicles but determined that a multi-year contract will be more advantageous to the Agency.
This 5-year Master Lease will allow UTA to mirror its 5-year replacement plan for buses and the 5-year Capital Plan by securing the lease rates based on an index plus an agreed to percentage for 2022-2026.
DISCUSSION:
Staff reviewed three proposers for the request for proposal (RFP). Banc of America’s escrow plans and rates were the most advantageous to UTA. Their proposal would allow the 5 individual yearly traunches of lease funds to be held in escrow held by Zions at current Public Treasurer Investment Fund rates as follows:
• 2022 - $49,268,154
• 2023 - $46,798,000
• 2024 - $46,942,000
• 2025 - $55,751,000
• 2026 - $39,219,000
Total - $237,978,154
Banc of America’s lease rate were based on 79 percent of the Tax Exempt Secured Overnight Financing Rate (SOFR) Swaps Based Index rate plus the following spread:
• 6-years .3621%
• 8-years .5324%
• 10-years .5347%
• 14-years .8521%
Through this resolution the Board is being asked to approve the Master Equipment Lease Purchase Agreement, and the 2022B Schedule to the Master Lease. We will return to the board annually for approval of future year traunches of lease funds.
CONTRACT SUMMARY:
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Contractor Name: |
Banc of America |
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Contract Number: |
22-03638CG |
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Base Contract Effective Dates: |
12/8/2022-12/31/2026 |
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Extended Contract Dates: |
N/A |
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Existing Contract Value: |
$0 |
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Amendment Amount: |
$0 |
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New/Total Contract Value: |
$298,765,203 |
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Procurement Method: |
RFP |
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Budget Authority: |
Amounts are consistent with UTA’s 2023-2027 Capital Plan and Debt Service Projections in the Agency’s Financial Plan |
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ALTERNATIVES:
Reject the RFP results and repropose. This would result in UTA losing the rate lock currently agreed upon. This could also drive the choice to not lease vehicles but instead paying cash for all purchases which would affect the 5-year transit financial plan.
FISCAL IMPACT:
The fiscal impact for 2022 Leases would be approximately $14,145,116 in interest expense over the life of the 6, 8 and 14-year leases. The approximate cost for interest on this contract over the full five-year period is $60,787,049.
ATTACHMENTS:
Resolution