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Council OKs two master leases: $40.5M for vehicles and $41.5M for refuse/recycling bins; votes split on bins
Summary
Council approved two master lease ordinances to finance city vehicles ($40.5M) and replacement refuse/recycling containers ($41.5M). The vehicle financing passed 8-1; the bins financing passed 6-3 after debate over scale, procurement and local labor.
The City Council voted Nov. 3 to approve two separate master lease ordinances with Bank of America Public Capital Corporation to finance city vehicles and refuse/recycling containers.
Debt Management staff said the first agreement (subitem A) will provide up to $40,500,000 to finance approximately 313 add-on and replacement vehicles across the general fund, with projected semiannual payments and terms ranging from three to ten years. Fleet purchases will be cash-funded for outfitting and sales tax, with reimbursement from lease proceeds following acquisition.
The second agreement (subitem B) would provide up to $41,500,000 to finance an estimated 750,000 refuse and recycling containers for the Solid Waste Management Fund, with an anticipated 10-year repayment term and estimated total debt service in the roughly $50 million range. Staff said the City leveraged a cooperative procurement vehicle (revver/RevRec contract) as the most cost-effective option after reviewing other vendors.
Public speakers questioned the timing and scale of replacement bins and vehicle costs given the city's budget deficit, asked whether delivery crews are local, and raised concerns about local hiring and procurement transparency. Several speakers also asked about RFID or technology embedded in new containers and how data would be handled.
Council discussion focused on procurement choices, the number of containers (225,000 customers served, with each receiving at least one trash and one recycling container), the reuse/recycling of returned containers, and whether the city should replace all containers now. Councilmembers split on the bins item: Subitem A (vehicles) passed 8-1 (Councilmember Moreno voted no), while Subitem B (refuse/recycling containers) passed 6-3 with Councilmembers Campillo, Von Wilpert and Foster voting no.
Councilmembers who opposed subitem B said they supported necessary vehicle purchases but questioned the need to finance all containers at once and expressed a preference for more limited replacement and local contracting. Staff said recycling of returned containers will be handled and that cooperative procurement yielded the most cost-effective vendor for scale.
The ordinances authorize financing authority; the city is not obligated to draw the full amounts and the fixed rate will be set at time of financing. Execution was expected after second reading in mid-November.
