Municipal Leasing

No two leasing programs are the same, and CCMI has extensive experience in tailoring lease-purchase acquisition programs for a wide variety of municipal and federal entities, such as:

• Government Entities
  • Federal Agencies
  • State Agencies
  • Counties
  • Cities
• Public and Private Universities
• School Districts
• Transportation Authorities
• Airports and Port Authorities
• Housing Authorities
• Public Power Agencies
• Water Districts
• Not-for-profit Hospitals
• Museums
  

CCMI is skilled in developing both single lease-purchase transactions, which are the most common financing mechanism for the acquisition of real or personal property, and master lease programs, which have proven especially beneficial for the acquisition of equipment or real property in a “not-to-exceed” amount or during a specific time period, and/or for the aggregation of multiple users into a single transaction.

Lease-purchase structures allow governmental agencies and other qualified participants the opportunity to acquire personal or real property, on a tax exempt or taxable basis, without voter approval and without creating tax-supported debt because the funds used to pay lease payments are derived from budgetary appropriation or other revenues, equipment, property, etc.

Important benefits of lease-purchase financing include:

• Provides 100 percent of acquisition cost and related services
• Preserves budgetary funds for critical needs
• Offers low interest rates fixed for the term of the lease
• Spreads costs over the economic or useful life of the acquisition
• Allows annual or biannual appropriation

Municipal leasing structures can be used effectively for a broad range of financings from conventional equipment such as school buses, computers, ambulances and fire trucks to the more specialty-tailored purchases such as energy management systems, textbooks and scoreboards for public school systems. See below for more lease-purchase financing options.

Single Lease-Purchase Transactions
Single lease-purchase transactions are the most common financing mechanism for municipal entities in the acquisition of real or personal property (see examples below). Funds for the purchase are available on the closing date. One of the advantages of a single lease-purchase is the flexibility it offers. Payments can be directed to the vendor on the closing date, or funds can remain on deposit until the lessee accepts the equipment and then formally requests payment to the vendor.

Single Lease-Purchase Transaction Structure:

• Escrow funded with Trustee/paying agent
• Certificates of Participation (“COP”) structure
  • Can be rated, securitized, publicly offered, or privately-placed
  • Trustee/paying agent
• Current market pricing

Master Lease Programs
While no two master lease programs are the same, they typically fall into two types:

• Escrow-Funded Master Lease
• Master Lease Line-of-Credit
  

Master leases have proven especially beneficial for municipal entities needing to acquire equipment or real property in a “not-to-exceed” amount or during a specific time period, and/or for the aggregation of multiple users into a single transaction.

In an escrow-funded master lease program the aggregate cost of the equipment is secured on the closing date and deposited into an escrow account. Funds that are not paid to vendors at closing are typically invested at the lessee’s direction, with investment earnings accruing to the benefit of the lessee. Upon acceptance of equipment, the lessee(s) then request payment be made to the vendor.

In a typical master lease line-of-credit, the contract enables a maximum dollar amount to be funded during a specific time period. For example, a school district may request periodic fundings up to the maximum dollar amount at any time within the fixed time frame. Regardless of the number of requests, each request is handled through the execution of supplementary documentation to the original line-of-credit.

Master Lease Transaction Structure:

• Multi-year lease programs with renewals
• Multiple Takedowns with specified minimums
• Certificates of Participation (“COP”) structure
  • Can be rated, securitized, publicly offered or privately-placed
  • Trustee/paying agent
• Current market pricing (tied to an index or bid at current market conditions)
  

Benefits of Master Lease Programs:

• Competitive interest rates and low financing costs for lease purchase transactions
• By aggregating lease purchase needs, transactions can be insured and/or rated, further reducing interest rates
• Standardized documentation
• Allows access to the public markets through insured and/or rated COPs
  

CCMI provides post closing support in the form of:

• Vendor payments
• Customized invoicing
• Extraordinary calls
• Early payoffs
• Call notices
• Disclosure notices
  

Examples of Property Eligible for Lease-Purchase Financing

Equipment:
Agricultural equipment
Telecommunication systems
Stadium seating
Fiber-optic cable systems
Stadium scoreboards and astroturf
Medical equipment
Scientific and research equipment
Portable classrooms
Voting machines
Office furniture and equipment
Audio-visual and multimedia equipment
Computer hardware, installation, upgrades, and maintenance
Scanners, digital cameras, copiers, printers, and servers
Software and software program development
Printing press equipment
Educational and laboratory equipment
Cafeteria equipment
Wastewater treatment plants
Rolling stock, including cars, buses, fire trucks, and railcars
Heavy construction equipment
Emergency services equipment
Band and orchestra equipment
Recreational equipment
Modular buildings
Energy efficiency equipment, including chillers, boilers, HVAC, solar energy systems, and turbine generators
Aircraft
Watercraft

Real Property:
Schools
Courthouses
Police and fire stations
Government office buildings
Not-for-profit hospitals
Museums
Research centers
Correctional facilities
Administrative offices
Parking garages
Roadways