Tax Exempt School and Municipal Lease Financing

Transcription

1 Tax Exempt School ad Muicipal Lease Fiacig For Schools ad Muicipalities Equipmet Fiaced: Vehicles-Computers-Eergy Maagemet Systems-Furiture ad Fixtures Commuicatios Systems-Audio Visual Equipmet-Portable Buildigs-Ay Equipmet for Essetial Use

2 What is a Muicipal Lease? Similar to a loa Lessee keeps the asset a/k/a: Lease/Purchase, Coditioal Sale, Istallmet Sale, Dollar Out Lease Fiacig for Essetial Use Equipmet Tax Exempt Rates Leder does ot pay federal icome tax o the eared iterest = lower iterest rate to borrower

3 What is a Muicipal Lease? Lease Term: Typical is 2 years to 7 years (up to 10 years i some cases) Typical Size: Up to $5K to $50MM Paymets structured to meet budgetary eeds of school or muicipality Lower Cost of Issuace tha traditioal Bod fiacig. Less Complex tha a Bod = Faster turaroud time.

4 What is a Muicipal Lease? Subject to aual appropriatio - No-Appropriatio risk offset by the fact that leased assets are essetial use Lease paymet is cosidered a curret expese Not cosidered debt for purposes of calculatig costitutioal debt limit

5 What ca be leased? Virtually ay type of Essetial Use Equipmet Here are just a few examples

6 What ca be leased? School Buses Modular Classroom Buildigs Furiture

7 What ca be leased? All Office Equipmet (examples) Scaers Copiers Faxes Folders Iserters Mailig Machies Labelig LCD Projectors Cameras ad Other Audio Visual Equipmet Law Maiteace

8 What ca be leased? Computers & Related Equipmet Commuicatios Computers, Servers Telecom Systems Networkig Software Two-Way Radio Priters Accoutig Software Wireless Data Products Scaers Tape Drives Back-Up Drives Routers UPS Scaers

9 What ca be leased? Sports & Activities For the health ad well-beig of all your studets, it's importat to offer sports ad activities. With the help of leasig, you ca cotiue to periodically upgrade ad expad your equipmet ad facilities: Sports equipmet ad athletic facilities Bad uiforms ad istrumets Gym floorig ad courts Turf, sythetic fields, ad tracks Bleachers ad stadium seatig Lightig ad scoreboards

10 Leasig historically has bee for traditioal equipmet as collateral. But Leasig is becomig more commo for fiacig soft costs, itagibles, istallatio, etire projects 100% Fiacig

11 Whe Does Leasig Make Sese? For expeses that are too large for a sigle fiscal year s budget To match the cost of a asset with the useful life of a asset Ay eergy performace or efficiecy improvemet cotract Whe a Bod offerig is ot the right optio timig is a issue, size does ot warrat fees, simpler documetatio To fix iterest costs i times of risig rates

12 Whe Does Leasig Make Sese? Emergecy, o-budgeted equipmet eeds Eergy Performace Projects: match lease paymets with eergy savigs Fiace Maagemet maage cash flow / coserve workig capital Refiace older, higher rate leases Cost overrus o boded projects

13 Pitfalls to Avoid Focusig solely o Rate: Fees, timig ad closig costs ca iflate the effective rate of a bod, loa or lease. Make sure you factor all of these i. Opiio of Cousel: make sure your Cousel kows that you will eed a tax opiio. If possible, provide them with a sample versio to reduce costs ad time. May small schedules: Whe possible, budle several items together ito oe lease. This allows for fewer ivoices. You ca fud ito a Escrow accout to lock your rate o may items to be acquired throughout the year.

14 School Districts, Couties, ad Cities face uprecedeted demad for services at a time whe reveue shortfalls ad budget cutbacks are the orm rather tha the exceptio. How ca you stretch your budget to meet the requiremets of your missio? TFMS, Ic. ca help you structure ad complete a lease that will maximize the use of your fuds, ad provide you with the equipmet you eed ow.. QUESTIONS? Cotact Iformatio Charles Freelad CFO, Secretary/Treasurer Direct Phoe: Charles@tfmsic.com Corporate Office Phoe: (405) Fax: Ifo@tfmsic.com Web Site: