Bergen Muni Banc

About the Program

Category: Financial Management (Best in Category)

Year: 2009

The Bergen Bond Banc Program provides tax-exempt lease financing for municipalities, school districts, sewerage authorities, and municipal and county utilities authorities to purchase capital equipment and other personal or real property. Under the program, the Bergen County Improvement Authority (BCIA) and a leasing company or banking institution, as lessor entered into a Master Purchase Lease Agreement. The Bergen County Improvement Authority as sublessor will then enter into a Sublease Agreement with a Governmental Entity pursuant to which the Sublesse makes its payments. The BCIA’s Sublease with a Sublesse is a tax-exempt lease obligation. As additional security for the Master Lease and Sublease and in order to provide for the lowest borrowing cost available, the County of Bergen enters into an agreement with the BCIA to provide payments to the BCIA if there are insufficient payments under the Sublease. The Program allows municipal government entities to waive the required 5% cash down payment normally required under New Jersey law. The program also provides a cost effective alternative to vendor financing which is taxable in most instances. And, in the midst of the national bank crisis, it assures each governmental entity access to the credit markets.