Utility Boards

 

 

By entering into a lease-purchase agreement, public entities can obtain ownership of equipment without debt obligation. Payments are regarded as a current obligation, not a debt, and require only the approval of the governing body rather than a public referendum.

 

 

Lease-purchase agreements require that payments from government agencies are subject to annual appropriations. This means the agency must appropriate the necessary funds to meet debt service each and every year, until the obligation is paid in full.

 

Typical lease- purchase terms range from twelve months to ten years, depending on the type of equipment and its useful life. Payment terms can be set up monthly, quarterly, semi-annually or annually.

BENEFITS:

Solution to Your Capital Budget

  • Lease payments can be structured to meet budget constraints through flexible payment modes and lease terms.

Cash Conservation

  • Leasing provides 100% financing and structured payments conserve cash.

No Debt Created

  • Since the lease payments are subject to annual appropriations, no long term debt obligation is created.

No Voter Referendum

  • A properly structured lease purchase agreement does not constitute debt under most state constitutions; therefore, no voter referendum is required to enter into a lease contract.

Alternative Source for Funds

  • Leasing leaves other budget lines untouched and available for daily operations.

There Are No Surprises

  • Leasing offers competitive fixed rates with set payments structured to meet your capital budget needs with simple, straightforward documentation. No additional costs. No hidden fees.

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