The Morris County Improvement Authority has announced that it will offer even better rates to towns, school and fire districts, and authorities for its county guaranteed leasing program, or CGLP, which offers low cost and tax-exempt financing for the purchase of capital equipment.
At its meeting this week, the Authority accepted revised rates offered by its lessor bank, TD Equipment Finance, which further reduced the floor rates for equipment leases that are in excess of $250,000 as follows:
- 3-year lease: 1.53 percent (previous floor rate was 1.85)
- 5-year lease: 1.75 percent (previous floor rate was 2.10)
- 10-year lease: 2.25 percent (previous floor rate was 2.75)
Leases in excess of $750,000 will receive a further reduced rate to be determined by the lessor bank.
Since 2004 the CGLP has financed $49 million in capital equipment through 155 separate lease transactions. The strength of the program lies in the county’s top-ranked Triple A credit strength, which allow borrowing entities to use the county’s most favorable interest rates for the leasing of equipment.
“The Improvement Authority offers reduced costs and future savings to participants in its capital equipment leasing program, which allows them to take advantage of the county’s top-ranked Triple A bond rating for the best rates possible,’’ said Freeholder Deborah Smith, who is a liaison to the MCIA.
“The new, lower rates will be an even greater benefit to the taxpayers of this county,’’ she added.
The Improvement Authority, which was established in 2002 by the Morris County Board of Freeholders, provides municipalities, school districts and the county with innovative and cost effective methods of funding projects and saving tax dollars at the same time.
By using the MCIA and the county’s AAA Bond rating to finance such projects as equipment and vehicle purchases or leasing, school and municipal construction projects, and capital programs, local officials can spend fewer dollars and thereby reduce the property tax burden on their residents.
Since its inception, the Improvement Authority transacted more than $300 million worth of construction and refinancing loans for the county, school districts, and local governments, saving them $17.5 million in debt service as a result of pooling transactions.
Of that, one-third, or $5.5 million was directly attributed to leveraging Morris County’s AAA bond rating to enhance the savings.