AGENDA #4c

MEMORANDUM

TO:	Roger L. Stancil, Town Manager
FROM:	Kay Johnson, Finance Director
SUBJECT:	Award of Bid for Financing of Vehicle Replacement for the 2006-07 Fiscal Year
DATE:	April 23, 2007

PURPOSE

The purpose of this memorandum is to authorize acceptance of the low bid from SunTrust Bank of 3.6% for financing over seven years of the Town’s proposed $1,870,800 vehicle replacement purchases for 2006-07. 

BACKGROUND

On February 12, 2007 the Council received a proposal to seek financing for $1,870,800 for the planned 2006-07 vehicle replacement purchases.  The Council forwarded the list of proposed vehicle purchases for Sustainability, Energy and Environment (SEE) Committee approval.  The SEE Committee approved the list of purchases on March 5, 2007. 

Requests for proposals for financing the purchases of vehicles were sent to seven financial institutions on April 5, 2007.  Responses were requested on April 16, 2007.  The proposals specified quotes for seven-year fixed rate installment payments on $1,870,800 for vehicles with an expected useful life averaging seven years.  

Responses received from financial institutions on April 16 were as follows:

The bids received were competitive and reflect the interest rate environment in the current economy.  Based on the proposals received, we recommend accepting the low bid from SunTrust Bank of 3.6% for the seven-year financing with total interest and fees of $262,298. 

The majority of vehicles included in this purchase are available through the Town's participation in State purchasing contracts.  Some individual items will require formal bids in accord with normal bidding requirements and will be presented to the Council for approval.

RECOMMENDATION

We recommend that the Council adopt the attached resolution authorizing the execution of a financing contract with SunTrust Bank for $1,870,800 in vehicles to be repaid over seven-years.