Agenda

Return

C.32

To:	Board of Supervisors
From:	Michael J. Lango, General Services Director
Date:	February 15, 2011

Contra

Costa

County

Subject:

Lease-Purchase Agreement with PNC Equipment Financing, Inc. for Purchase of Mainframe Computer System Components

APPROVE	OTHER
RECOMMENDATION OF CNTY ADMINISTRATOR	RECOMMENDATION OF BOARD COMMITTEE

Action of Board On: 02/15/2011

APPROVED AS RECOMMENDED

OTHER

Clerks Notes:

VOTE OF SUPERVISORS

AYE:

John Gioia, District I Supervisor
Gayle B. Uilkema, District II Supervisor
Karen Mitchoff, District IV Supervisor
Federal D. Glover, District V Supervisor

ABSENT:

Mary N. Piepho, District III Supervisor

Contact:	Steve Silveira 925-313-7120
cc:	GSD Administration GSD Accounting GSD Purchasing Auditor Controller County Administrator GSD Purchasing

I hereby certify that this is a true and correct copy of an action taken and entered on the minutes of the Board of Supervisors on the date shown.
ATTESTED: February 15, 2011
David Twa,

BY:	, Deputy

RECOMMENDATION(S):

AMEND Board action of September 28, 2010 (Item C.55), which approved and authorized the Purchasing Agent or designee to execute, on behalf of the Chief Information Officer, a purchase order with Sirius Computer Solutions, in an amount not to exceed $751,000 for purchase and replacement of mainframe components, to APPROVE and AUTHORIZE the Purchasing Agent or designee to execute a third party lease agreement with PNC Equipment Financing, Inc., for the period March 1, 2011 through September 1, 2015, increase the lease purchase amount by $48,000 to an amount not to exceed $799,000, as recommended by the Deputy General Services Director.

FISCAL IMPACT:

The increase in the total lease purchase price is due to the cost of borrowing money. The lease purchase cost not to exceed $799,000 is budgeted in the FY 2010/2011 Department of Information Technology (DoIT) budget and charged back to user departments through the DoIT billing process.

BACKGROUND:

On September 28, 2010, the Board of Supervisors approved execution of a purchase order on behalf of the Chief Information Officer, with Sirius Computer Solutions in an amount not to exceed $751,000, for the purchase and replacement of mainframe computer system components for DoIT.

To finance the purchase, the Purchasing Agent negotiated a lease-purchase agreement with PNC Equipment Financing, Inc., which amends the September 28, 2010 Board Order (C.55) in accordance with the following terms:

$750,910.27 Principal
2.625% annual percentage rate compounded semi-annually
10 semi-annual payments of $79,829.68 with first payment due at funding.

In order to finance the purchase of the equipment and pay for subsequent implementation, service, and support costs, PNC will place funds in escrow with U.S. Bank’s Corporate Trust Services Escrow Group. The U.S. Bank Money Market account is a U.S. Bank National Association (“U.S. Bank”) interest-bearing time deposit account. Execution of this agreement includes authorization to place funds on deposit with U.S. Bank.

CONSEQUENCE OF NEGATIVE ACTION:

If the PNC financing agreement is not approved, replacement and implementation of the mainframe computer system components will require payment from operating funds or cancellation of the project. Full payment from operating funds will create a hardship for the department and negatively impact support of County information technology systems. The mainframe computer system is vital to the continued operation of the County's financial software systems.

CHILDREN'S IMPACT STATEMENT:

Not Applicable.