HomeMy WebLinkAboutminutes.council.19740612 STUDY SES.SION .. " AS~E'N"'C"~TY COUNCIL JUNE i~'2, 1974
Present: Councilmembers Jack Walls, Jenifer Pe .ersen, James Breasted, Michael Behrendt,
Ramona Markalunas and city Manager Dr. Philip Mahoney and City Attorney Sandra Stuller.
EQUI.pMEN~..LEAS.E..PACKAGE
Manager stated he needed direction from Council on this subject. The main reason for makin¢
this request is that the budget is balanced down to the penny. In reading the market and
hearing about projects that are not going to go because of the squeeze on financing and the
economic situation, feel the City must address the problem and be ready for the slow down.
There is no provision in the budget for cash flow management. Also feel the costs should
be related to the same year in which they occur. Feel that the Charter does give the City
the right to lease under Section 9.13.
Manager submitted memo to Council outlining his position. Memo included also the in-house
construction programs and proposed lease schedule. Reported the Vacu-Sweep cannot be in-
cluded in this package.
Construction progress and budget related to the Marolt line was reviewed. Cost comparison
sheet was submitted showing the savings to the City by the utilization of city machinery
and management of the project. (Savings - $26,058).
Councilman Behrendt stated he would like to see a list of the payments over the next three
years - not just one project. Manager stated projects have been budgeted over the next
three years that would justify this equipment under consideration for the lease package.
Equipment listed in the lease package -backhoe, wheel loader, power grader and mini buses.
Manager stated equipment offered and equipment availability are the reasons for not leasing
for duration of projects. Further stated it is estimated the City will have $100,000 to
$150,000 surplus at the end of this year.
Mr. George Carvel explained the mechanics of the lease with the First National Bank of
Denver and outlined the alternatives to the City as relates to financing. Those alterna-
tives as follows: (1) pay cash; (2) borrow funds from the Bank of Aspen at 5-3/4% which
would not have to be paid by year end but the Bank would be willing to accept a check from
the City which they would not cash but would let it float; (3) lease with option to buy at
the end of a year, interest rate approximately 7 to 8% and the City could invest the
amount appropriated for purchase in 90 day treasury bills at perhaps 7-3/4% or (4) straight
lease.
Council questioned why the legal problem with leasing had not come before Council prior to
this time when other equipment has been leased for years. City Attorney submitted legal
opinion on the leasong of equipment. Charter change was suggested.
Council request an opinion from the auditors on this request.
Meeting adjourned to the Ptarmigan Lodge to discuss the lease with the Dan Wiegner group.
Adjourned 6:25 p.m.
~I~orraine Graves, C~ty Clerk