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RESOLUTION NO. ,,- -"34
A RESOLUTION of the City of Port Angeles
authorizing the Port Angeles City
Manager to execute a Conditional Sales
Contract with Seattle First National
Bank.
WHEREAS, the City Council finds it necessary to finance
acquisition of replacement equipment for various Port Angeles
Departments;
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF
THE CITY OF PORT ANGELES, as follows:
Section 1. The City Manager is hereby authorized into
an executory Conditional Sales Contract with Seattle First
National Bank for the purchase of a garbage truck. The total
amount of this purchase is $67,403.
PASSED by the City Council of the City of Port Angeles
at a regular meeting of said Council held on the 3rd day of
April, 1984.
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MEMORANDUM
March 29, 1984
TO: Manager Flodstrom, Mayor Duncan and Members of the City Council
~ROM: Rob Orton, Director, Finance & Administrative Services
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RE: Conditional Sales Contract Financing
.SSUE: Adoption of Resolution authorizing Manager to sign executory
conditional sales financing for the purchase of a garbage truck.
BACKGROUND: For several years, it has been the policy of the City to
finance new equipment acquisitions and replacement acquisitions where
inadequate reserves were maintained by the use of conditional sales
contract financing. Last year, the City ordered a new garbage truck which
represented a new, not a replacement, vehicle. Due to manufacturing delays
the truck was just recently delivered. In accordance with our established
policy, we are presenting the attached Resolution for approval to allow the
Manager to sign the conditional sales contract negotiated with Seattle
First National Bank.
ANALYSIS: Staff has negotiated what we determine to be a reasonable
contract with Seattle First National Bank. Although there has been a
recent rise in market interest rates, we have been able to obtain three-
year financing at a rate of 9.75%. The sum will be amortized on a five-
year schedule and will allow the City to make a balloon payment at the end
of three years or have guaranteed financing at a market rate for two
additional years at the end of the three-year period.
The use of conditional sales contract financing for this type purchase
allows the City to build adequate reserves to replace all equipment in the
future. 1984 will be the first year that some equipment replacements will
be made directly out of the reserve. Since the particular truck covered
under this contract is not a direct replacement, we must find some form of
initial capitalization. Due to the financial position of the Solid Waste
Fund, it seems most reasonable that contract financing is our best choice.
RECOMMENDATION: We recommend that the attached Resolution be passed to
allow the Manager to sign the contract with Seattle First National Bank.
Attachment
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