Computers, office furniture, sheriffs' patrol cars, fire trucks, front-end loaders, motor-graders, telephone systems - those endless requirements of county governments. Large counties provide for these by creating a master lease financing vehicle. Smaller counties must depend upon a pay-as-you-go system, or borrow from the commercial marketplace. Too often, counties rely upon vendor financing schemes, which often carry high, taxable interest rates on the equipment.
The NACo Financial Services Center (FSC) developed a master lease financing program for all counties, which provides easy, economical, tax-exempt financing rates to qualified counties. The program is designed to provide financing from $10,000 to $10 million. All essential equipment, land, buildings or refinancing are qualified under the program.
Listed above is a small sample of counties that have taken advantage of this cost-saving program.
County Financed Amount Equipment Description
Genesee County, Mich. $475,914.00 Computer Hardware/ Software/Training
Union County, Ore. $175,766.87 Telephone System, IBM
De Soto County, Fla. $12,075.00 Mulching Machine
Lincoln County, Ore. $550,000.00 Swap Buildings and Renovation
Stanly County, N.C. $9,445.00 Sharp SF-2035 Copier System
Often, vendors will give counties additional reductions in costs if the county pays within 10 to 15 days. Under normal county procedures, quick payment is often difficult. However, under the FSC program, prequalified counties may receive their funds within 48 hours of the request for funds. To prequalify, the county need only fill out a one-page form and submit its audited financial statement to the program.
The FSC program also guarantees low, tax-exempt rates. Koch Financial Corporation and Norwest Bank provide competitive rates for all FSC lease financing. And the rates quoted to the county are inclusive of all fees, charges, servicing and reconveyance. The county simply establishes the length of the financing, the payment schedule and the delivery date. At the conclusion of the financing period, the county owns the equipment or building it financed.
Recently, the FSC qualified roads, bridges and asphalt materials for the program. Additionally, the program may be used to finance the county share-of-cost on federal or state road and bridge projects.
(For more information, contact Rich Trease, program manager, at the FSC Lease Finance hotline: 800/372-8008.)
(NACo Services News was written by Steve Swendiman, FSC managing director.)