City Council Agenda and Packet 2011 05 03

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any of the businesses for granted. He stated the proposed building formerly housed Promotech. MOTION: Councilor Sackett moved to approve Resolution No. 23, Series 2011, seconded by Councilor Dalton. Roll call vote was taken. The motion carried by a vote of 7 -0. RESOLUTION No. 22, SERIES 2011 — A RESOLUTION APPROVING A FIRST AMENDMENT TO THE EXISTING EQUIPMENT LEASE AGREEMENT BETWEEN THE CITY OF LOUISVILLE, COLORADO, AND ZIONS CREDIT CORPORATION, SALT LAKE CITY, UTAH FOR LEASING OF A PHOTOVOLTAIC (PV) POWER SYSTEM IN THE CITY City Manager Fleming explained since the City entered into a lease agreement with Zion, their legal counsel has taken a more cautious interpretation of the IRS Code provisions under which Zions is eligible for a tax credit on the transaction. They wanted to increase the buyout amounts to make sure that they reflect the likely appraised value of the equipment when the City acquires it. The City would agree to the change if it did not increase the City's expense over the life of the agreement. They responded by reducing the monthly least payment. City Manager Fleming presented an overview of the amendment through graphs and tables. In net present value terms, going with the revised lease payment and 5 -year buyout will save the City $3,000, while the revised lease payment and 10 -year buyout would cost the City about $2,000. The net present value savings depends on what discount rate (reflecting the time value of money) one uses in the calculation. The $3,000 savings is based on a 4% discount rate. However, the revised buyout is still positive even at a discount rate of 1 %. Consequently, if the City continues to get a low rate of return (in the 1`)/0 range) on the City's investments, and the savings are invested, the revised lease agreement with the 5 -year buy -out term will net the City about $300. COUNCIL COMMENTS Council discussion centered on a 5 -year buyout opposed to a 10 -year buyout. 16 City Council Meeting Minutes April 26, 2011 Page 4 of 6 MOTION: Mayor Pro Tem Marsella moved to approve Resolution No. 22, Series 2011, seconded by Councilor Clabots. Roll call vote was taken. The motion carried by a vote of 7 -0. Mayor Sisk reported local businessmen Brad Emrick of B.E. Clean and Dan Souders of Western Disposal will be inducted into the Boulder County Business Hall of Fame on April 27. He complimented City Manager Fleming on his April 21 State of the City Address, which was held at the Louisville Marriot Courtyard Hotel. CITY MANAGER'S PERFORMANCE GOALS /QUARTERLY STATUS REPORT