08.c. Purchase of a Sewer Vactor TruckMEMORANDUM
TO: CITYCOUNCIL
FROM: ANGELA KRAETSCH, DIRECTOR OF ADMINISTRATIVE SERVICE
SUBJECT: CONSIDERATION OF A RESOLUTION APPROVING A GOVERNMENT
OBLIGATION CONTRACT BETWEEN THE CITY OF ARROYO GRANDE
AND KANSAS STATE BANK OF MANHATTAN FOR THE LEASE
PURCHASE OF A SEWER VACTOR 'TRUCK
DATE: JUNE 12,2012
RECOMMENDA'I'ION:
It is recommended the City Council adopt a Resolution approving a Government Obligation
Contract between the City of Arroyo Grande and Kansas State Bank of Manhattan for the
lease purchase of a Sewer Vactor truck.
IMPACT ON FINANCIAL AND PERSONNEL RESOURCES:
The total cost of the Sewer Vactor truck is $294,077. However, the City received $225,000
from the City's property insurance company as a result of damage sustained in a accident
last year caused by a third party. The remaining balance of $69,077 is to be financed over
five years. The interest rate is 3.942% with the annual payment beginning July 31, 2012 of
$1 5,002.
The staff time for the administration of the lease is minimal.
BACKGROUND:
On September 12, 201 1, the City's Sewer Vactor truck was involved in a traffic accident in
which it was hit by a semi-truck and totaled. The truck was insured with the California Joint
Powers Insurance Authority (CJPIA) for $225,000. On December 13, 201 1, Council
approved the lease purchase of a new replacement Sewer Vactor truck.
ANALYSIS OF ISSUES:
As part of the lease purchase of the Sewer Vactor truck the leasing company requires that
the Council approve a Resolution determining the need for the equipment, approving the
contract with Kansas State Bank of Manhattan and designating a representative authorized
to execute the contract on behalf of the City.
Agenda Item 8.c.
Page 1
CITY COUNCIL
CONSIDERATION OF A RESOLUTION APPROVING A LEASE PURCHASE
AGREEMENT
JUNE 12,2012
PAGE 2
ALTERNATIVES:
The following alternatives are provided for the Council's consideration:
- Approve staffs recommendation to adopt a resolution approving a Government
Obligation Contract between the City of Arroyo Grande and Kansas State Bank
of Manhattan;
- Do not approve staff recommendation and request further information;
- Modify staff recommendation and approve;
- Provide direction to staff.
ADVANTAGES:
The recommended action will allow the City to enter into a lease purchase agreement that will
spread the costs over five years at a low interest rate in order to avoid reducing the Sewer
Fund Balance all at once.
DISADVANTAGES:
The lease purchase will cost the Sewer Fund $75,010 over five years with annual lease
payments of $1 5,002, which is a fund currently with a low fund.
ENVIROMENTAL REVIEW:
No environmental review is required for this item
PUBLIC NOTIFICATION AND COMMENTS:
The Agenda was posted in front of City Hall on Thursday, June 7, 2012. 'The Agenda and
report were posted on the City's website on Friday, June 8, 2012. No public comments
were received.
Agenda Item 8.c.
Page 2
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF ARROYO GRANDE APPROVING A GOVERNMENT
OBLIGATION CONTRACT BETWEEN THE CITY OF
ARROYO GRANDE AND KANSAS STATE BANK OF
MANHATTAN FOR THE LEASE PURCHASE OF A
SEWER VACTOR TRUCK
WHEREAS, the City Council has determined that a true and very real need exists for
the acquisition of the equipment described on Exhibit A of the Government Obligation
Contract ("Contract") dated as of May 16, 2012, between the City of Arroyo Grande,
California (Obligor) and Kansas State Bank of Manhattan (Obligee); and
WHEREAS, the City Council has determined that the Contract, s~~bstantially in the form
presented at this meeting, is in the best interests of the City for the acquisition of such
equipment, and the City Council hereby approves the entering into of the Contract by
the Obligor and hereby designates and authorizes the person specified below to
execute and deliver the Contract on the Obligor's behalf with such changes thereto as
such person deems appropriate, and any related documents, including any Escrow
Contract, necessary to the consummation of the transaction contemplated by the
Contract.
NOW, THEREFORE BE IT RESOLVED that the City Council of the City of Arroyo
Grande does hereby determine that a true and very real need exists for the acquisition
of the equipment described in Exhibit A of the Government Obligation Contract dated as
of May 16, 2012, between the City of Arroyo Grande, California and Kansas State Bank
of Manhattan and has determined that the Contract, substantially in the form presented
at this meeting, is in the best interests of the City for the acquisition of such equipment,
and the City Council hereby approves the entering into of the Contract by the City.
BE IT FURTHER RESOLVED that the City Council hereby designates and authorizes
Steven Adams, City Manager, to execute the Contract and other all relevant documents
in this matter.
On motion of Council Member , seconded by Council Member
the following roll call vote, to wit:
AYES:
NOES:
ABSENT:
, and on
the foregoing Resolution was passed and adopted this day of , 2012.
Agenda Item 8.c.
Page 3
RESOLU'TION NO.
PAGE 2
TONY FERRARA, MAYOR
ATTEST:
KELLY WETMORE, CITY CLERK
APPROVED AS TO CONTENT:
STEVEN ADAMS, CITY MANAGER
APPROVED AS TO FORM:
TIMOTHY J. CARMEL, CITY ATTORNEY
Agenda Item 8.c.
Page 4
CA Standard 051612
GOVERNMENT OBLIGATION CONTRACT
Obligor
City of Arroyo Grande, California
300 E. Branch Street
Arroyo Grande, California 93420
Obligee
Kansas State Bank of Manhattan
1010 Westloop, P.O.Box 69
Manhattan, Kansas 66505-0069
Dated as of May 16,201 2
This Govemment Obligation Contract dated as of the date listed above is between Obligee and Obllgor listed directly above. Obligee desires to finance the purchase of the
Equ~pment described in Exhibit "A" to Obl~gor and Obligor desires to finance the purchase of the Equipment fmm Obligee subject to the terms and conditions of th~s Contract
which are set forlh below.
1. DeflnlUons:
Seaion 1.01. Dem. The following terms will have the meanings ~ndlcated below unless the context dearly requires otherwise:
'Add~tional Schedule' refers to the proper execution of additional Schedules to Exhibit A. Exhib~t B. Exhibit C and Exhibit D as well as other exhibits or documents that may be
requ~red by the Obl~gee all of which relate to a Rnandng of add~tional Equipment.
"Budget Year means the Obl~gor's fiscal year.
'Commencement Date" is the date when Obligoi's obligation to pay Contract Payments begins.
'Contract" means this Government Obligation Contract, all Exhibits, and all documents rel~ed upon by Obl~gee prior to execution of this Contrad
"Contract Payments" means the payments Obligor Is required to make under this Contract as set forlh on Exhibit "6.
"Contract Term" means the Original Term and all Renewal Terms.
"Equipmenl' means all of the items of Equipment l~sted on Exhibit "A" and all replacements, restorations, modifications and Improvements.
'Govemmenr as used in the title hereof means a State or a polibcal subdivision of the State wlthin the meaning of Section 103(a) of the Internal Revenue Code of 1986, as
amended rCode'), or a constituted authority or disbict authorized to issue obligations of on behalf of the State or political subdivision of the State within the meaning of
Treasury Regulation 1,103-l(b), or a qualified volunteer fire company within the meaning of section 150(e)(l) of the Code.
"Obllgee" means the entity originally llsted above as Obllgee or any of its assignees.
"Obligor" means the entity listed above as Obl~gor and which is financing the Equipment from Obligee under the provisions of this Contract.
"Onginal Term" means the period from the Commencement Date until the end of the Budget Year of Obligor.
"Renewal Term" means the annual term which begins at the end of the Original Term and which is simultaneous with Obligor's Budget Year.
"State" means the state in which Obl~gor is located.
II. Oblloar Wananties - - "- - ---
Section 2.01. Oblioor represents. warrants and covenants as follows for the benetit of Obliaee or its assianees:
lab Oblioor is an "issuer of tax exemot oblioations" because Oblloor is the State or a political subdivision of the State within the meanlna of Section 103ta) of the Internal ,-, ---- ----- ~- -- ---- -
Revenue Code of 1986, as amen&. (the 'Code") or because-obligor is a constituted authority or district authorized to issue obllgatio& on behalf of the state or political
subdivision of the State within the meaning of Treasury Regulation 1 103-l(b).
(b) Obligor is authorized under the Constitution and laws of the State to enter into this Contract, and has used such authority to properly execute and del~ver this Contract.
Obligor has followed all proper procedures of its governing body in executing this Contract. The Officer of Obllgor executing this Contract has the authority to execute and
deliver th~s ContracL Th~s Contract constitutes a legal, valid, binding and enforceable obilgation of the Obligor in accordance with its terms.
(c) Obligor has amplied with all statutory laws and regulations that may be epplicable to the execution of this Contract.
(d) Obligor shall use the Equipment only for essential, traditional government purposes.
(e) Should the IRS disallow the tax%xempt status of the Interest Porhon of the Contract Payments as a result of the failure of the Obligor to use the Equipment for
governmental purposes, then Obligor shall be required to pay additional sums to the Obl~gee or its assignees so as to bring the after tax yield to the same level as the
Obligee or its assignees would attain d the transaction continued to be tax-exempt.
(f) Should the Obligor cease to be an issuer of tax exempt obligations or if the obligation of Obllgor created under this Contract ceases to be a tax exempt obligation for any
reason. then Obligor shall be required to pay additional sums to the Obligee or its assignees so as to bring the after tax yield on this Contract to the same level as the
Obligee or its assignees would attain 8 the transaction anbnued to be tax-exempt
(g) Obligor has never non-appropriated funds under an Contract similar to this Contrad
(h) Obligor will submit to the Secretary of the Treasury an ~nformation reporbng statement as required by the Code.
(i) Upon request by Obligee. Obllgor wiil provide Obl~gee with current flnandal statements, reports, budgets or other relevant fiscal information.
(j) Obligor shall retain the Equipment free of any hazardous substances as defined in the Comprehensive Environmental Response. Compensabon and Liability Act. 42
U.S.C. 9601 et. seq. as amended and supplemented.
(k) Obl~gor presently intends to continue this Contract for the Original Term and all Renewal Terms as set fotth on Exh~brt 'B' hereto. The oftidal of Obligor respons~ble for
budget preparation will include in the budget request for each Budget Year the Contract Payments to become due in such Budget year, and wiil use all reasonable and
lawful means ava~lable to secure the appropriation of money for such Budget Year suffiuent to pay the Contract Payments coming due therein. Obligor reasonably
believes that moneys can and will lawfully be appropnated and made ava~lable for this purpose
Section 2 02. Escrow Cot-Itract. In the event both Obligee and Obligor mutually agree to utilize an Escrow Account, then Immediately following the execution and delivery of
this Contract. Obligee and Obligor agree to execute and deliver and to cause Escrow Agent to execute and deliver the Escrow Contract. This Contract shall take effect only
upon execution and delivery of the Escmw Contract by the parties thereto. Obligee shall deposlt or cause to be deposited with the ESMW agent for cred~t to tha Equipment
Acquisition Fund the sum of $m, which shall be held, invested and disbursed in accordance with the Escrow Contract
111. Acqulsltlon of Equipment, Contact Payments and the Purchase Optlon Prtce
Section 3.01. Acquisition and Acce~tance. Obligor shall be solely responsible for the ordering of the Equipment and for the dellvery and installation of the Equipment.
Execution of the Acceptance Certificate by an employee, offidal or agent of the Obligor hawng managerial, supervisory or procurement authority with respect to the Equipment
shall constitute acceptance of the Equipment on behalf of the Obligor.
Section 3.02. Conbsct Pavments. Obligor shall pay Contract Payments exclusively to Obllgee or its assignees in lawful, legally available money of the Unlted States of
America. The Contract Payments shall be sent to the location specified by the Obligee or its asslgnees. The Contract Payments shall constitute a current expense of the
Obligor and shall not constitute en Indebtedness of the Obligor. The Contract Payments are due as setforlh on Exhibit B. Obligee shall have the option to charge interest at
the highest lawful rate on any Contract Payment received later than the due date for the number of days that the Contract Payment(s) were late, plus any additional accrual on
the outstanding balance for the number of days that the Contract Payment(s) were late. Obligee shall also have the option, on monthly payments only, to charge a late fee of
up to 10% of the monthly Contract Payment that Is past due. The Contract Payments will be payable w~thout notice or demand. Furlhermore. Obligor agrees to pay any
additional feedcosts incurred by Obligee relating to Obligoi's requirement that a certain payment mechanism be utilized.
Section 3.03. Contract Pavments Unconditional. Except as provided under Section 4.01. THE OBLIGATIONS OF OBLIGOR TO MAKE CONTRACT PAYMENTS AND TO
PERFORM AND OBSERVE THE OTHER COVENANTS CONTAINED IN THIS CONTRACT SHALL BE ABSOLUTE AND UNCONDITIONAL IN ALL EVENTS WlTHOUT
ABATEMENT. DIMINUTION. DEDUCTION. SET-OFF OR DEFENSE
Sectlon 3.04. Purchase Option Price. Upon thirty (30) days written notice. Obligor shall have the option to pay. in addition to the Contract Payment, the corresponding
Purchase Option Price which is listed on the same line on Exhibit B. This option is only available to the Obligor on the Contract Payment date and no partial prepayments are
allowed. If Obligor chooses this option and pays the Purchase Option Price to Obligee then Obllgee will transfer any and all of its rights, title and interest in the Equipment to
Obligor.
~e&on 3 05. Contract Ten, The Contract Term of the Contract shall be the Original Term and all Renewal Terms unhl all the Contract Payments are paid as set forth on
Exh~b~t B except as provided under Section 4.01 and Section 9 01 below. If, after the end of the budgeting process which occurs at the end of the Onginal Term or any
Renewal Term. Obligor has not non-appropneted as prowded for in this Contract then the Contract Term shall be extended into the next Renewal Term and the Obligor shall be
obligated to make all the Contract Payments that come due during such Renewal Term.
Sealon 3.06. D~sdalmer of Warranties. OBLIGEE MAKES NO WARRANTY OR REPRESENTATION. EITHER EXPRESS OR IMPLIED. AS TO THE VALUE. DESIGN.
CONDITION. MERCHANTABILITY. FITNESS FOR PARTICULAR PURPOSE OR ANY OTHER WARRANTY WlTH RESPECT TO THE EQUIPMENT. OBLIGEE SHALL NOT
Agenda Item 8.c.
Page 5
BE LIABLE FOR ANY INCIDENTAL. INDIRECT. SPECIAL OR CONSEQUENTIAL DAMAGE ARISING OUT OF THE INSTALLATION, OPERATION, POSSESSION.
STORAGE OR USE OF THE EQUIPMENT BY OBLIGOR.
IV. Non-Appropriatlon
Section 4.01. Non-A~~moriatio~. If insufficient funds are available in Obligots budget for the next Budget Year to make the Contract Payments for the next Renewal Term and
the funds to make such Contract Payments are otherwise unavailable by any lawful means whatsoever, then Obligor shall have the option to non-appropriate the funds to pay
the Contract Payments for the next Renewal Term. Lack of a sufficient appropriation shall be evidenced by the passage of an ordinance or resolution by the governing body of
Obligor specifically pmhibibng Obligor from performing 16 obligations under this Contract and from using any moneys to pay the Contract Payments due under this Contract for
a designated Budget Year and all subsequent Budget Years. If Obligor chooses thls option. then all obllgatlons of the Obligor under thls Contract regarding Contract Payments
for all remalnlng Renewal Terms shall be terminated at the end of the then current Original Term or Renewal Term without penalty or l~ability to the Obligor of any kind provided
that if Obligor has not delivered possession of the Equipment to Obligee as prov~ded herein and conveyed to Obligee or released Its interest in the Equipment by the end of the
last Budget Year for which Contract Payments were paid, the termination shall nevertheless be effective but Obligor shall be responsible for the payment of damages in an
amount equal to the amount of the Contract Payments thereafter coming due under Exhibit 'B' which are atinbutable to the number of days after such Budget Year dunng
which Obligor fails to take such actions and for any other loss suffered by Obligee as a result of Obligoh failure to take such actions as required. Obl~gor shall immedlately
nobfy the Obligee as soon as the decision to non-appropriate is made. If such non-appropriation occurs. then Obligor shall deliver the Equipment to Obligee as provided below
in Section 9.04. Obligor shall be liable for all damage to the Equipment other than normal wear and tear. If Obligor fails to deliver the Equipment to Obligee. then Obllgee may
enter the premises where the Equipment is located and take possesslon of the Equipment and charge Obligor for costs incurred.
V. Insurance, Damage, lnsufficlency of Procaeds
Section 5.01. Insurance. Obligor shall maintain both casualty Insurance and liabil~ty insurance at its own expense with respect to the Equ~pment Obligor shall be solely
responsible for selecting the insurer(s) and for making all premium payments and ensuring that all policies are continuously kept in effect during the period when Obligor is
required to make Contract Payments. Obligor shall provide Obligee with a Certificate of Insurance which lists the Obllgee andlor assigns as a loss payee and an additional
Insured on the policies with respect to the Equipment
(a) Obligor shall insure the Equipment agalnst any loss or damage by fire and all other risks covered by the standard extended coverage endorsement then in use in the
State and any other risks reasonably required by Obligee In an amount at least equal to the then applicable Purchase Option Price of tha Equipment Alternatively.
Obligor may insure the Equipment under a blanket insurence policy or policies.
(b) The liability insurance shall insure Obligee from liability and property damage in any form and amount satisfactoly to Obligee.
(C) Obligor may self-insure against the casualty risks and liability risks described above. If Obligor chooses thls option. Obligor must furnish Obligee with a certificate
andlor other documents which evidences such coverage.
(dl All Insurance policies issued or affected by thts Section shall be so written or endorsed such that the Obligee and its assignees are named additional insureds and
loss payees and that all losses are payable to Obligor and Obligee or its assignees as thelr interests may appear. Each pollcy issued or affected by this Section
shall contain a provision that the insurance company shall not cancel or materially modify the policy without first giving thirty (30) days advance notice to Obligee or
its assignees. Obligor shall furnish to Obligee certificates evidencing such coverage throughout the Contract Term.
Section 5.02. Damaae to or Destruction of Faul~mea. Obllgor assumes the risk of loss or damage to the Equipment. If the Equipment or any portion thereof is lost. stolen.
damaged, or destroyed by fire or other casualty. Obligor will immed~ately report all such losses to all possible Insurers and take the proper procedures to attain all insurance
proceeds. At the option of Obligee. Obligor shall either (1) apply the Net Proceeds to replace, repair or restore the Equipment or (2) apply the Net Proceeds to the applicable
Purchase Optnn Price. For purposes of this Secbon and Section 5.03, the term Net Proceeds shall mean the amount of insurance proceeds collected from all applicable
insurance policies after deducting all expenses incurred in the collection thereof.
Section 5.03. lnsufficiencv of Net Proceeds. If there are no Net Proceeds for whatever reason or if the Net Proceeds are insufficient to pay In full the cost of any replacement.
repalr, restoration, modfflcation or improvement of the Equipment, then Obligor shall, at the option of Obligee, either (1) complete such replacement. repair, restoration.
modification or improvement and pay any costs thereof in excess of the amount of the Net Pmceeds or (2) apply the Net Pmceeds to the Purchase Option Pnce and pay the
deficiency, if any, to the Obligee.
Section 5.04. Obliaor Nealiaence. Obligor assumes all risks and liabilities, whether or not covered by insurance, for loss or damage to the Equipment and for injury to or death
of any person or damage to any property whether such injury or death be with respect to agents or employees of Obligor or of third pahes, and whether such property damage
be to Obligot's property or the property of others (including, wlthout limitation, liabilities for loss or damage related to the release or threatened release of hazardous substances
under the Comprehensive Environmental Response. Compensation and Liability Act, the Resource Conservation and Recnvely Act or similar or successor law or any State or
local equivalent now existing or hereinafter enacted which in any manner arise out of or are incident to any possesslon, use, operation, condition or storage of any Equipment
by Obligor) which is proximately caused by the negligent conduct of Obligor, its officers, employees and agents. Obligor hereby assumes responsibility for and agrees to
reimburse Obligee for all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including reasonable attorneys' fees) of whatsoever kind and
nature, imposed on, incurred by or asserted against Obllgee that in any way relate to or arise out of a claim, suit or proceeding, based in whole or in parl upon the negligent
conduct of Obligor, its officers, employees and agents, to the maximum extent permitted by law
vl. Tltle and Security Interest
Section 6.01. TiUe. Title to the Equipment shall vest in Obligor when Obligor aqulres and accepts the Equipment Tie to the Equipment will automatically transfer to the
Obllgee in the event Obligor non-appropriates under Section 4.01 or in the event Obligor defaults under Section 9.01. In either of such events. Obligor shall execute and deliver
to Obligee such documents as Obligee may request to evldence the passage of legal title to the Equipment to Obligee.
Section 6.02. Securitv Interest To secure the payment of all Obligot's obllgabons under this Contract, as well as all other obligations, debts and liabilities, whether now
exisbng or subsequent& created, Obligor hereby grants to Obligee a security interest under the Uniform Commercial Code consbtuting a first lien on the Equipment described
more fully on Exhibit'A'. Furlhermore. Obligor agrees that any and all Equlpment listed on any other Exhibit A, whether prior to or subsequent hereto, secures all obligations.
debts and l~abil~ties of evely kind and character, plus interest thereon, whether now existing or hereafter arislng. Obligor agrees that any Equipment llsted on Exhib~t 'A' will
remain personal property and will not become a fixture even if attached to real property. The security interest established by this section includes not only additions,
attachments, repairs and replacements, to the Equipment but also all proceeds therefrom. Obllgor authorizes Obligee to prepare and record any Financing Statement required
under the Uniform Commercial Code to perfect the security interest created hereunder.
vll. Asalgnment
Section 7 01. Assignment bv Obllaee. All of Obligee's rights, title andlor interest in and to this Contract may be assigned and reassigned in whole or in parl to one or more
assignees or sub-assignees (Including a Registered Owner for Participation Certificates) by Obligee at any time without the consent of Obligor. No such assignment shall be
effective as against Obligor unbl the assignor shall have filed with Obligor written notice of assignment identifying the assignee Obligor shall pay all Contract Payments due
' hereunder relating to such Equipment to or at the direct~on of Obl~gee or the assignee named in the notice of assignment. Obllgor shall keep a complete and accurate record of
all such assignments.
Section 7.02. Assianment bv Obliao~. None of Obligots right. title and interest under this Contrect and In the Equipment may be assigned by Obligor unless Obligee approves
of such assignment in writing before such assignment occurs and only after Obl~gor first obtains an opinion from nationally recognized counsel stating that such assignment will
not jeopardize the tax-exempt status of the obligation.
WII. Maintenance of Equlpment
Semen 8.01. Obligor shall keep the Equipment in good repair and worklng order. Obligee shall have no obligation to inspect, test, senrice, maintain, repair or make
Improvements or additions to the Equipment under any circumstances. Obligor w~ll be liable for all damage to the Equipment, other than normal wear and tear, caused by
Obligor, its employees or its agents. Obligor shall pay for and obtain all permits, licenses and taxes necessaly for the ~nstallation, operation, possession, storege or use of the
Equipment. If the Equipment includes any titied vehicle(s), then Obligor is responsible for obtalning such title(s) from the State and also for ensuring that Obligee is listed as
First Lienholder on all of the title(s). If any fees are requlred to be paid by the Calllomia Debt 8 Investment Advisoly Commission then such fees shall be paid directiy from the
Obligor to the California Debt 8 Investment Advisoly Commission. Obl~gor shall not during the term of thls Contract create, incur or assume any levies, liens or encumbrances
of any kind with respect to the Equipment except those created by thls Contract. Obligor agrees that Obligee or ~ts Assignee may execute any add~tional documents Including
financing statements, affidavits, notices, and similar instruments, for and on behalf of Obligor whlch Obligee deems necessary or appropriate to protect Obligee's interest in the
Equipment and in this Contract. The Equipment is and shall at all times be and remain personal property. Obligor shall allow Obl~gee to examine and inspect the Equipment at
all reasonable times.
IX. Default
Sectron 9.01. Events of Default defines. The following events shall constitute an "Event of Defaulr' under this Contract:
(a) Failure by Obligor to pay any Contract Payment listed on Exhibit "B" for fifteen (15) days after such payment is due according to the Payment Date listed on Exhibit
"B" Agenda Item 8.c.
Page 6
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Agenda Item 8.c.
Page 7
Schedule (01
EXHIBIT A
DESCRIPTION OF EQUIPMENT
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee) and Citv of Arrovo Grande. California (Obligor)
Below is a detailed description of all the items of Equipment including quantity, model number and serial number where
applicable:
One (1) 2012 Freightliner Vactor 2110 with Jet Rodder, VINISN:
Location of Equipment: 1375 Ash Street. Arrovo Grande, CA 93420
Schedule (01 1
EXHIBIT B
PAYMENT SCHEDULE
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee) and Citv of Arrovo Grande. California (Obligor)
Date of First Payment:
Original Balance:
Total Number of Payments:
Number of Payments Per Year:
July 31, 2012
$69,076.68
Five (5)
One (1)
Pmt Due Contract Applied to Applied to *Purchase
No. Date Payment Interest Principal Option Price
1 31-Jul-12 $15,001.63 $453.83 $14,547.80 $56,496.98
2 31-Jul-13 $15,001.63 $2,149.52 $12,852.1 1 $42,882.35
3 31-Jul-14 $15,001.63 $1,642.89 $1 3,358.74 $28,933.48
4 31-Jul-15 $15,001.63 $1,116.29 $13,885.34 $14,642.17
5 31-Jul-16 $15,001.63 $568.94 $14,432.69 $0.00
Citv of Arrovo Grande, California
Signature
Typed Name and Title
.Assumes all Contract Payments due to date are paid
Agenda Item 8.c.
Page 8
Schedule (01 1
EXHIBIT C
CERTIFICATE OF ACCEPTANCE
RE: Government Obligation Contract dated as of Mav 16, 2012, between Kansas State Bank of Manhattan
(Obligee) and Citv of Arrovo Grande. California (Obligor)
I, the undersigned, hereby certify that I am a duly qualified representative of Obligor and that I have been given the
authority by the Governing Body of Obligor to sign this Certificate of Acceptance with respect to the above referenced
Contract. I hereby certify that:
1. The Equipment described on Exhibit A has been delivered and installed in accordance with Obligor's specifications.
2. Obligor has conducted such inspection andlor testing of the Equipment as it deems necessary and appropriate and
hereby acknowledges that it accepts the Equipment for all purposes.
3. Obligor has appropriated andlor taken other lawful actions necessary to provide moneys sufficient to pay all
Contract Payments required to be paid under the Contract during the current Budget Year of Obligor, and such
moneys will be applied in payment of all Contract Payments due and payable during such current Budget Year.
4. Obligor has obtained insurance coverage as required under the Contract from an insurer qualified to do business in
the State.
5. No event or condition that constitutes or would constitute an Event of Default exists as of the date hereof.
6. The governing body of Obligor has approved the authorization, execution and delivery of this Contract on its behalf
by the authorized representative of Obligor who signed the Contract.
7. Please list the Source of Funds (Fund Item in Budget) for the Contract Payments that come due under Exhibit B of
this Contract.
Citv Sewer Fund
If the above Source of Funds is solely a grant type fund, then the Obligor, by signing below, hereby authorizes the
General Fund of the Obligor as a backup source of funds from which the Contract Payments can be made.
Citv of Arrovo Grande. California
Signature
Typed Name and Title
Agenda Item 8.c.
Page 9
Schedule (01 1
EXHIBIT D
OBLIGOR RESOLUTION
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee) and Citv of Arrovo Grande, California (Obligor)
At a duly called meeting of the Governing Body of the Obligor (as defined in the Contract) held on
the following resolution was introduced and adopted:
BE IT RESOLVED by the Governing Body of Obligor as follows:
1. Determination of Need. The Governing Body of Obligor has determined that a true and very real need exists for the
acquisition of the Equipment described on Exhibit A of the Government Obligation Contract dated as of May 16, 2012,
between Citv of Arrovo Grande. California (Obligor) and Kansas State Bank of Manhattan (Obligee).
2. Approval and Authorization. The Governing Body of Obligor has determined that the Contract, substantially in the
form presented to this meeting, is in the best interests of the Obligor for the acquisition of such Equipment, and the
Governing Body hereby approves the entering into of the Contract by the Obligor and hereby designates and
authorizes the following person(s) to execute and deliver the Contract on Obligor's behalf with such changes thereto as
such person@) deem@) appropriate, and any related documents, including any Escrow Contract, necessary to the
consummation of the transaction contemplated by the Contract.
Authorized Indlvldual(s):
(Printed or Typed Name and Title of individual@) authorized to execute the Contract)
3. Adoption of Resolution. The signatures below from the designated individuals from the Governing Body of the
Obligor evidence the adoption by the Governing Body of this Resolution.
Signature:
(Signature of Secretary, Board Chairman or other member of the Governing Body)
Typed Name 8 Title
(Typed Name and Title of individual who signed directly above)
Attested By:
(Signature of one addlional person who can witness the passage of this Resolution)
Typed Name 8 Title:
(Typed name of individual who signed directly above)
Agenda Item 8.c.
Page 10
Schedule (01)
EXHIBIT E
BANK QUALIFIED CERTIFICATE
RE: Government Obligation Contract dated as of May 16, 2012, between Kansas State Bank of Manhattan
(Obligee) and Citv of Arrovo Grande, California (Obligor)
Whereas, Obligor hereby represents that it is a "Bank Qualified" Issuer for the calendar year in which this Contract is
executed by making the following designations with respect to Section 265 of the Internal Revenue Code. (A "Bank
Qualified Issuer" is an issuer that issues less than ten million ($10,000,000) dollars of tax-exempt obligations during the
calendar year).
Now, therefor, Obligor hereby designates this Contract as follows:
1. Designation as Qualified Tax-Exempt Obligation. Pursuant to Section 265(b)(3)(B)(i) of the Internal Revenue Code
of 1986 as amended (the 'Code"), the Obligor hereby specifically designates the Contract as a 'qualified tax-exempt
obligation" for purposes of Section 265(b)(3) of the Code. In compliance with Section 265(b)(3)(D) of the Code, the
Obligor hereby represents that the Obligor will not designate more than $10,000,000 of obligations issued by the
Obligor in the calendar year during which the Contract is executed and delivered as such 'qualified tax-exempt
obligations".
2. Issuance Limitation. In compliance with the requirements of Section 265(b)(3)(C) of the Code, the Obligor hereby
represents that the Obligor (including all subordinate entities of the Obligor within the meaning of Section 265(b)(3)(E)
of the Code) reasonably anticipates not to issue in the calendar year during which the Contract is executed and
delivered, obligations bearing interest exempt from federal income taxation under Section 103 of the Code (other than
"private activity bonds" as defined in Section 141 of the Code) in an amount greater than $10,000,000.
Citv of Arrovo Grande, California
Signature
Typed Name and Title
Agenda Item 8.c.
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Agenda Item 8.c.
Page 12