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The Library Corporation Proposal for Cabarrus County Public Library Leasing The Library Corporation is proud to provide a lease purchase program to help you get the library automation solution that you need Right Now! The Library Corporation in cooperation with Government Leasing Company has developed a program just for you. It is called Municipal Leasing. Municipal Lease Purchase Financing for government agencies takes advantage of Internal Revenue Service rules declaring interest income derived from lease purchase financing to be exempt from Federal, and sometimes State, income tax. Because of this tax exemption, interest rates are significantly lower than commercial finance rates. The library will own the equipment at the end of the term with a $1.00 Buyout; there is no residual such as Future Market Value or 10 %. In most jurisdictions, the authority of a library administrator to enter into debt or obligation of future funds is severely limited. For this reason, the Municipal Lease Purchase program includes a Non - Appropriation clause which specifies that the lease may be terminated in the event funds are not available in subsequent fiscal years. This allows funds to be used from the operating budget to purchase equipment through a lease purchase finance program without having to go through the lengthy and costly process of issuing bonds and getting voter approval. Government Leasing Company provides governmental financing exclusively. As a specialist, GLC provides documents to satisfy the IRS rules and any other State requirements. The whole process of receiving a Lease Rate quote, issuing documents and signature requirements on the Lease Purchase Agreement can happen in less than One Week! Why Lease Purchase? • Low Interest Rates: libraries qualify for interest rates as much as 30 to 40 percent lower than commercial financing. • Municipal lease purchase is an ownership plan - -not a rental. After completing the payment schedule, you will own the equipment. • Municipal leases have no balloon or residual payment at completion. • Municipal leases include a non - appropriation clause which means you are only obligating funds for the current fiscal year. • If funds become available, you may buy out at any time after the completion of the 1 st fiscal year. A detailed amortization schedule is provided for every transaction. • Lease terms are flexible to meet your budgetary needs. Choose length of contract, payment interval, and advance or arrears payment as necessary. • Finance equipment as low as $5,000. Avoid the lengthy and costly process of issuing bonds or waiting for grants for equipment that is needed. • Annual support costs can be included in the lease, if desired. The process to begin a Lease Purchase Program is FAST and SIMPLE! The Library Corporation is ready to make this transaction as quick and easy as possible for you. TLC Proprietary/Confidential July 13, 2010 Page 10 Attachment number 5 F -12 Page 332