This page will have answers to common questions and provide additional information to financial services.
1) What can be financed on a Municipal Lease?
Both personal property as well as real property; however, we limit our transactions to personal property. Examples are Police /Sheriffs Cars, Ambulances, Cars and light trucks, Computer Systems/Software, Office Furniture and Fixtures, Modular Buildings, Street Sweepers, Garbage Trucks/Containers, Sewer Cleaners, Fire Trucks, Tractors and Lawn Equipment, Construction Equipment of all types.
2) Who owns the Leased Equipment?
Title to the leased property is held by the governmental entity, which purchased the equipment. In most cases a first lien position is held by the leasing company or the funder of the transaction. After the final payment, the lien is released. All guarantees and/or warrantees from the manufacturer or vendor are passed directly to the governmental entity.
3) Why does the Agreement contain a non-appropriation clause?
The clause is contained in the agreement so that it does not create debt. Usually, the voters must approve debt incurred by the entity. A Lease/Purchase does not require voter approval in that it creates expenses ((payments) only for the current appropriation period. (Usually the fiscal year). The payments due after the current year are an obligation subject to appropriation for each fiscal period. Our agreement requires that the entity to use its best effort to obtain the necessary appropriation each fiscal year for the lease payments.
4) What is the Maximum Lease/Purchase Term?
We usually restrict our term to the average useful life expectancy of the equipment. For example-major city police cars for a two year period. A Sheriffs car in a rural county we limit to four years. A fire truck may be as long as eight or more years. It depends on the type and use of the property.5) Who pays the Insurance Costs?
The entity which owns the equipment is required to maintain insurance both property damage and liability coverage. We require that we be listed as the additional insured and loss payee on a Certificate of Insurance.