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09- Af ORANGE COUNTY _ <br /> BOARD OF 020USSIONETS Action Agenda f C� <br /> A0 ON AGENDA TEEM ABSTRACT Item <br /> HE=ZIG DATE January 4, 1983 . <br /> Subject: Financing of Front End Loading Refuse Truck and Computer Equipment <br /> Department: 'urc acing .7nance I Public Heara:ng_' _-- yes no <br /> Attar t s nfor etion. Contact: <br /> Yes. Mark H. Rees, ext. 497 - <br /> Pho Nter: Wallace Harding, ext. 496 <br /> PEE: To consid"er two alternatives for financing Front End" Loading Refuse Truck and <br /> Computer Equipment. . <br /> Alternative 1 : Award lease purchase agreement to Municipal Leasing Corooratio1 <br /> / as being the lowest responsible bidder (see attached bid summarl <br /> 13_1% interest rate. <br /> Alternative 2: Purchase equipment outright by using: $45,000 of the water and <br /> sewer" extension appropriation in the CIP fund. This will leave <br /> $10,000 in that project for this year and is all that is expect: <br /> to: be spent; $10,000 from old courthouse restoration project" <br /> which will leave $55,000 in this project and will be enough to <br /> match grants of $29,000; $32,000 from the Commissioners contin- <br /> gency account which will leave $40,900 for the remainder of the <br /> year,- 352,000 from current years Local Option Sales Tax which <br /> is coming in approximately 215.%" above- budget. <br /> NEED: Previous Board action authorized purchase of this equipment subject to financing <br /> arrangement. <br /> T PACTr At the lease purchase rate of interest of 13.1% and the current investment rate <br /> of 9% the County would benefit materially by buying the equipment outright. <br /> Interest expense (13.1%) 28,074 <br /> Interest earnings (9%) (18,793) <br /> 5,281 <br /> Assuming a 5% annual inflation rate the $9,281 loss would be $8,375. <br /> RECOMMENDATION(S) :. <br /> Purchase equipment outright (see proposed budget amendment.) <br />