§ 1:711. Lease of equipment.

(a)

A comparative costs analysis shall be conducted when the purchasing agent determines that a lease or lease-purchase procurement option to be in the best interest of the city-parish.

(1)

At a minimum, the following shall be considered:

a.

Estimated time period the equipment is to be used and the frequency of use within that period.

b.

Financial and operating advantages or alternate types and makes of equipment.

c.

Cumulative rental payments for the estimated period of use.

d.

Gross purchase price.

e.

Transportation and installation costs.

f.

Maintenance and other services costs.

g.

Potential insurance coverage.

h.

Availability of funds and cost of capital.

i.

Potential obsolescence of the equipment because of technological improvements.

(2)

The following should be considered, as appropriate, based upon the type, cost, complexity, and estimated period of use of the equipment:

a.

Availability of purchase options.

b.

Potential utilization of the equipment by others after its initial useful purpose has ended.

c.

Trade-in or salvage value at the end of the lease term.

d.

Imputed interest.

e.

Availability and cost of servicing the equipment.

(b)

A competitive bidding process shall be utilized and shall conform to the following requirements:

(1)

Specifications for equipment and related services shall be prepared in advance and shall designate the specific class or classes of equipment desired and may include all features associated with such class or classes of equipment. The specifications may also include requirements for the maintenance of the equipment if desired.

(2)

If a lease-purchase procurement is contemplated, the specifications shall require that the proposal contain the following:

a.

The principal amount of any proposed lease.

b.

The interest rate factor to be computed in the lease payments.

c.

The right of the lessee to purchase the equipment at the termination of payments for such equipment as set forth in the lease-purchase contract for a sum not to exceed one dollar ($1.00).

(c)

Any equipment leased or with lease-purchase option entered into shall contain an annual appropriation dependence requirement to the effect that the renewal and continuation of such contract is contingent on the appropriation of funds to fulfill the requirements of the contract. If a diligent and good-faith effort there isn't sufficient monies to provide for payments under the contract, the obligation to make payments under the contract shall terminate in accordance with the terms of the contract on the last day of the fiscal year for which funds were appropriated, provided the equipment is returned to the lessor or his agent as provided in the equipment lease or lease-purchase contract. In addition, in the equipment lease or lease-purchase contract, the lessor shall covenant and agree to indemnify and hold the lessee harmless against any loss, damage, liability, cost, penalty or expense, including attorneys' fees, which is not otherwise agreed to by lessee in the equipment lease-purchase contract and which is incurred and arises upon a failure to appropriate funds in the manner described herein for a continuation of the contract or exercise of the option to purchase the equipment.

(d)

Any equipment leased or with lease-purchase contract entered into pursuant to this section shall be treated as a lease for all legal purposes without regard to the rights and obligations of the lessee at lease termination or to any interest factor payment, and without necessity of filing a chattel mortgage. The lessor shall be deemed owner of the equipment during the term of the lease. In addition, the equipment shall be deemed to be movable property for all purposes and shall not become a component part of any immovable property, notwithstanding any provisions of law to the contrary, including but not limited to Civil Code Articles 465, 466, 467, 493.1, or 495.

(e)

All lease or lease-purchase contracts entered into pursuant to this section shall provide that whatever interests, claims and rights, including warranties of the equipment, which the lessor may have against the selected vendor of the equipment which is the subject of such lease-purchase contract, shall be assigned to the lessee, and the lessee shall have full right to pursue any and all remedies available to the lessor for breach of any warranty against the vendor. In addition, the lease-purchase contract shall provide that the lessor shall join the lessee as a party plaintiff in any cause, if required under state law, for successful pursuit of such action. Upon termination of the lease-purchase contract, unless the option to purchase is exercised, all such interests, claims, and rights assigned to the lessee under this section shall revert to the lessor. In addition, the lease-purchase contract shall provide that lessee has no right to alienate or encumber the equipment during the term of the lease.

(Ord. No. 16935, § 1, 11-28-18)