FULLMER CONTRACT FURNITURE AND SERVICES

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Purchase Agreement for New Modular Furniture Systems and Related Financing Page 2 A key element of the agreement with Griffin Realty was the assessment of all of the furniture in use by the two agencies to determine its adaptability to the new facility. This assessment concluded that, to a large extent, the existing furniture is both inefficient and impractical to reuse given the floor plan of the new facility. In order to maximize efficiency and cost effectiveness, therefore, the project combines the reuse of a portion of the existing furniture, including the desks, chairs, credenzas and filing cabinets in the management offices, with the installation of modular furniture systems in the general office, counter and public areas. This modular furniture system, which was competitively bid, maximizes the flexibility of the interior space design by enabling the departments to use an open floor plan. To accomplish this, the modular system provides a mechanism for integrating the City"s computer and telephone systems wiring directly into the furniture. The financing plan identified for the acquisition of the modular furniture system employs a lease purchase arrangement with a five to seven-year term. The plan funds the annual lease payments with the savings provided by relocating PWA and PBA back to the City Hall complex. In implementing the plan, the Finance & Management Services explored several alternatives and determined that a lease purchase agreement through a commercial leasing firm is the most cost-effective strategy. AS such, the City solicited proposals from several of these firms for the $1,400,000 lease purchase agreement. The following five responses were received: Leasing Firm Rate Banc One 4.53890 Pitney Bowes 4.60% G.E. Capital 4.7$6 Koch Financial 4.90% ABN AMRO 5.05% The proposal from Banc One Leasing Corporation provides the lowest interest rates and annual payments over a seven-year term. This approach produces significant savings, as financing the purchases through the furniture vendors would have resulted in annual interest rates of 6.72 percent for the same seven-year term. joining the City staff on the financing team is PMG Financial Consulting as Financial Advisors and Quint and Thimmig LLP as Bond Counsel. These firms have previously worked for the City as advisors on the 800 MHz Communication System and the City Hall Expansion Project bond financing as well as the Computer Master Lease Purchase Agreement.