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"The Municipal Lease"

(II) "The MUNICIPAL Lease". This lease option is used to acquire more expensive equipment. CSURF administers the transaction but is not a party to it. This year to year cancelable lease agreement is between CSU as lessee and a bank, leasing company or underwriter as lessor. The lessor is chosen by competitive bids submitted by interested parties. The lease agreement is signed between CSU and the successful bidder and upon full payment of the lease, title passes to the University. The interest rate on a Municipal Lease is reflective of market conditions and is usually around 75-80% of the prime lending rate. An administrative fee is paid to CSURF between 1 1/2% to 3% of the total amount financed, depending upon the size of the transaction. In the Municipal Lease, the University makes clearly defined payments of principal and interest and the lessor is allowed to treat the interest portion of the lease payments as tax exempt income. The municipal lease term, as with the CSURF lease, is on a fiscal year to year basis with renewal options to assure the University's liability is limited to the present lease term and thereby complies with Colorado law.

Features of a municipal lease are:

Available for equipment valued over $50,000.
Payments are made semi-annually.
The 1.5% to 3% administrative fee is based upon the size of the lease and is paid at time of closing.
Payback period is generally 10 years or less.
The lease is put out for bid to obtain the lowest competitive interest rate.

The leasing process (CSURF or Municipal) begins when an interested department determines a need for a specific piece of equipment and submits a lease request to the University Representative or the CSURF office. The lease/purchase request form is signed and verified by the Request Originator, Department Head, and Dean of the College to indicate the awareness of all individuals and entities of the financial obligation of the lease arrangement. Requests for computer equipment must also receive the approval of the Director of Academic Computer and Network Services (ACNS) or the University's Computer Center. If indication is given on the lease request that payments will be made from research contracts and/or grants, approval of the proper contract and grant administrator is also required to determine that 1) adequate funds are available, 2) the lease payments are allowable charges to the contract or grant. The request is then reviewed by the CSURF lease officer, the University Representative, and University Administrators to develop a needs assessment and an analysis of the department's ability to make the lease payments, based upon the projected sources of repayment.

Municipal Lease Application

 

Colorado State University
Colorado State University - Pueblo

Contact Information

Julie H. Birdsall
Chief Financial Officer, Corporate Secretary/Treasurer
Phone: (970) 491-2933
Fax: 970.484.0354

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This page was last updated January 22, 2009.
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