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Agreements with County of Orange, Motorola Solutions, Inc. <br />May 5, 2015 <br />Page 4 <br />serviced solely by Motorola. Thus, only Motorola can supply the appropriate equipment and <br />expertise to integrate the replacement equipment into the existing City 800 Mhz radio operations. <br />Additionally Motorola, through an agreement with Orange County Communications, has agreed to <br />offer agencies discounted prices on radio equipment. And thus, it has been recommended to the <br />City that participating agencies should participate in a bulk purchase of mobile and portable <br />radios prior to fiscal year 2016 -17 to take advantage of the discount pricing offered directly from <br />Motorola, the manufacturer of the equipment. <br />Financing of Proiect <br />As noted, the 800 MHz project consists of Console and Portable Radio equipment along with Hot <br />Red Radio's. Recommendation is made for Motorola to finance the equipment portion costs for <br />the project as a result of providing the City flexible financing and competitive rate options. <br />Specifically, Motorola has deferred both the first annual debt service payment and interest for one <br />year (July 15, 2016). Additionally, Motorola has proposed financing the purchase of the <br />equipment lease for ten years beginning on July 1, 2016 for an annual interest rate of 3.12 <br />percent and total payments not to exceed $4,867,659 (principal and interest). The City also will <br />not incur any additional borrowing costs as a result of entering into a capital lease agreement with <br />Motorola. <br />A comparative analysis was conducted between financing options provided from both Motorola <br />and Holman Capital Corporation. The analysis disclosed Motorola proposed a lower interest rate <br />option (when calculating the interest free for one year) and flexibility in deferring payment on the <br />capital lease until July 2016. As a result, the financing option proposed by Motorola will result in <br />lower total payments (principal and interest) incurred by the City for the purpose of financing the <br />equipment related costs for the project (see Table A below). <br />Table A <br />55A -4 <br />Motorola <br />Principal (P) <br />Interest (I) <br />Total Cost (P &I) <br />Consoles <br />525,200 <br />75,282 <br />600,482 <br />Hot Reds <br />1,389,000 <br />199,099 <br />1,588,100 <br />PD Portables and Mobiles <br />1,919,111 <br />275,085 <br />2,194,196 <br />Public Works, Planning, <br />PRSCSA and FMSA <br />Portables and Mobiles <br />424,092 <br />60,789 <br />484,881 <br />Total - Principal (P) <br />_ 4,257,403 <br />- -- -- <br />Total - Interest (1) _ <br />610,255 <br />Total Cost (P & 1) <br />4,867,659 <br />55A -4 <br />