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Board committee backs $34.18M lease financing for city radio system; annual debt service capped at $3.73M
Summary
Committee approved an ordinance appropriating $34.18 million in lease financing to the Department of Emergency Management for the public safety radio system; presenters said equipment will secure financing and city can prepay without penalty.
The Budget and Finance Committee on Jan. 31 approved an ordinance appropriating $34,184,136 in lease‑financing proceeds to the Department of Emergency Management to fund part of a city public safety radio system.
Jamie Karubin of the Controller’s Office said the financing closes with Bank of America Public Capital Corp at a 1.699% interest rate over a 10‑year term, producing a maximum annual debt service of $3,728,872 and total interest costs of about $3,104,585. The radios and supporting infrastructure will secure the financing until the debt is retired; the city can prepay the loan at any time without penalty.
Supervisor Norman Yee asked why the city chose leasing rather than outright purchase. Melissa Whitehouse, the Mayor’s Budget Director, said lease financing allowed the project to move forward without an immediate cash outlay and matches the useful life of equipment. Controller’s office staff explained the financing is structured as a lease‑to‑own arrangement timed to the asset life (about 10–11 years), after which the city owns the equipment.
Severn Campbell (Budget Analyst) noted the total city share of project costs and prior appropriations; the committee recommended approval. The ordinance advances to the full board with a positive recommendation.
