Are you ready to offer the benefits
of e-government to your constituents, but are delayed due to budget
restraints? One of the most common objections to moving forward
with procuring new technologies is lack of funding.
Accela Financial Services™ (AFS) is a tax-exempt municipal
lease program for agencies that want an easy and affordable way
to fund their e-government projects. Accela Financial Services is
offered in partnership with Government Capital Corporation, a public
finance investment bank providing professional financing services
to governmental entities.
What is a Tax-Exempt Lease?
A tax-exempt municipal lease is an installment purchase or lease
with an option to purchase for nominal value (municipal lease).
Interest earned by the lender is exempt from federal income tax
so borrowing rates are lower than commercial bank rates.
Tax-exempt municipal leases are fully authorized by federal and
state codes, and are structured as a series of one-year renewable
obligations subject to the agency’s ability to appropriate
funds for the continuation of lease payments. Payments constitute
a current expense of the agency. In the event that sufficient funds
are not available for payment (non-appropriation), the agreement
is terminated with no further obligation or penalty.
Who Qualifies?
States or political subdivisions of states—cities, towns,
counties, school districts, special purpose districts (fire, parks,
utility, water, etc.), hospitals, authorities, boards, and commissions—all
qualify for tax-exempt municipal leases.
The Municipal Lease Process
Step 1: Once a decision has been made to present a project recommendation
to the agency’s board/council, AFS prepares a resolution for
consideration.
Step 2: After the resolution has been adopted, AFS prepares documents
for signature and review by the lender.
Step 3: Upon receipt of the fully executed document set, AFS creates
an escrow account from which proceeds are disbursed.
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