Municipal Lease FAQ

Q: What if the City Commission or Council doesn’t appropriate funds for the next year’s payment?
: All governmental leases contain a “non-appropriations” clause. This basically says that the finance company agrees to allow the government agency to return the equipment without further recourse or cost to that agency if the governing body doesn’t allocate the necessary funds.

Q: Is the “Full Faith and Credit” of the governing agency affected by a municipal lease?
In most cases, no. This would be subject, of course, to any local charter or state statutes to the contrary.

Q: Can we make annual payments to coincide with our fiscal year revenue stream?
Yes. We can assist you in structuring practically any payment system – monthly, quarterly, yearly – whichever best suits the needs of your governing agency.

Q: Is a voter approval needed as on a bond issue?
Generally no, but this requirement can vary state to state.

Q: Will leasing equipment affect our debt limit?
A Government Lease Purchase Plan is NOT considered debt because the agreement can be canceled if future funds aren’t available (non-appropriations clause). However, this can vary – therefore state statutes as well as the government agency’s charter should be researched to see that no conflict exists.

Q: What if we have a tight budget and need the lease to keep scheduled payments as low as possible?
Many of the lease companies we work with are willing to structure skip payments.

Q: Can payments be structured in such a way that the equipment will be paid off at the end of the lease?
Yes. Government leases can be structured to provide a $1.00 payoff at the end of the lease if that is the wish of the city, county or township.

Q: Are there any other charges?
A: Generally yes. There is usually a nominal fee charged to cover paperwork cost.

Q: Does Morbark do the financing?
No, Morbark works with several finance companies. We will do everything possible to tailor a finance package to meet your needs.

Q: Where can I get more information on bid specs?
Call your local Morbark representative or call our in-house specialist.