A RESOLUTION AUTHORIZING THE TOWN MANAGER TO EXECUTE LEASE-PURCHASE CONTRACTS FOR VEHICLE REPLACEMENT PURCHASES FOR THE 2005-2006 FISCAL YEAR (2006-03-27/R-7)

WHEREAS, the Town of Chapel Hill solicited and received competitive proposals from financial institutions for the financing of a variety of vehicles for various departments; and

WHEREAS, Wachovia Bank offers the lowest total interest cost of 3.67 percent for the three-year term for the purchase of vehicles totaling $196,000; and

WHEREAS, Wachovia Bank offers the lowest total interest cost of 3.73 percent for the seven-year term for the purchase of vehicles totaling $1,599,500;

NOW, THEREFORE, BE IT RESOLVED by the Council of the Town of Chapel Hill that the Council authorizes the Town Manager to enter into a contract with Wachovia Bank on behalf of the Town for the financing of vehicles totaling $196,000 at a fixed interest cost of 3.67 percent for a three-year term with total principal, interest and fees cost of $208,172.70, and to enter into a contract with Wachovia Bank on behalf of the Town for the financing of additional vehicles totaling $1,599,500 with a fixed interest rate of 3.73 percent for a seven-year term with total principal and interest cost of $1,826,772.92.

BE IT FURTHER RESOLVED that the aforesaid contracts by and between the Town of Chapel Hill, various State contract and other vendors, and Wachovia Bank, together with the amounts to be paid thereunder, be designated as qualified tax-exempt obligations of the Town of Chapel Hill for purposes of Section 265(b)(3) of the Internal Revenue Code of 1986, as amended.

BE IT FURTHER RESOLVED that the Council does not reasonably expect that the Purchaser (and any subordinate entities) will issue more than $10,000,000 in qualified tax-exempt obligations pursuant to such Sections 265(b)(3)(ii) during the current calendar year.

This the 27^th day of March, 2006.