budget friendly technology leasing solutions service associate member of illinois asbo

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Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

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Page 1: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Budget Friendly Technology Leasing Solutions

Service Associate Member of Illinois ASBO

Page 2: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Overview

Introduction

Leasing Basics

Leasing Benefits

Leasing Programs

Leasing Partners

Steps to Implement a Refresh Program

Disposing End-of-Life Technology

Case Study: Batavia School Dist. 101

Page 3: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Introduction of Leasing Presenters

Jason Marquardt

Director of Sales

American Capital

(630) 512 - 0066 x118

[email protected]

John Vonder

V.P. of Business Development

MMF Leasing

(847) 412 - 0397 x161

[email protected]

Moderated by: Alan McCloud

Asst. Superintendent for Elementary Education & Supervisor of Technology

Batavia Public School District 101

(630) 879-4600 x4018

Page 4: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

What is a lease?

• By definition, a lease is a contract by which one acquires equipment for a specified period of time for a specified rent paid to the lessor.

• For Schools, a lease is a way to acquire and/or finance equipment without voter approval.

• Leasing does not constitute public debt.

Page 5: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

What can be leased?

• Computer Hardware• Software• Network Equipment• Printers & Copiers• Telephone Systems• And Much More!

Page 6: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

What are the benefits?

• Financial– Conservation of Capital (100% Financing)– Consistent Budget– Lowest Cost of Funds– Disposal issues eliminated

• Improve User & Administrator Satisfaction– Avoid Technology Obsolescence

• Minimizes break/fix time• Reduces user/teacher frustration

– Asset Management/Tracking

Page 7: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Lease vs. Purchase

LeaseA. Equipment = $300,000

Payment 1 = $100,000Payment 2 = $100,000Payment 3 = $100,000

B. Interest earned on $ not spent = $15,000Interest Year 1 = $10,000 (5%)Interest Year 2 = $ 5,000 (5%)

TOTAL COST (A-B) = $285,000

PurchaseA. Equipment = $300,000

Year 1 Purchase = $300,000B. Maintenance Beyond Warranty =

$6,000 (est.2% for direct expense)C. Disposal = $3,000

TOTAL COST (A+B+C) = $309,000

*Indirect Costs Not Included = IT labor to manage/fix old equipment, Curriculum opportunity costs, Efficiency costs of slower/under performing equipment

Page 8: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

What type of leaseprograms are available?

Fair Market Value

•Lowest Cost of Funds

•Flexible end of lease options

•Ideal in setting up an equipment replacement program

$1 Purchase Option

•Often a tax-exempt lease

•Fixed ownership at the end of the lease

•Ideal for infrastructure or software projects.

Page 9: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Lease Partners - Banks

• Strengths– Competitive pricing for a tax-exempt lease– Often a local trusted partner

• Weaknesses– Limited leasing expertise– Rarely participate in FMV/Refresh leases

Page 10: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Lease Partners – Vendor Financing

• Strengths– Simplified process– Occasional vendor discounts to offer below

market rates

• Weaknesses– Rates are often higher– Limit a district’s flexibility on brands to lease

Page 11: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Lease Partners – Independent Lessor• Strengths

– Niche expertise– Diversity in structures available to district– Flexibility to combine multiple brands– Competitive pricing

• Weaknesses– Reliance on funding partners– Unknown brokers often use unfavorable

contracts

Page 12: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Steps to Implement a Refresh Program

• Evaluate & chart present inventory• Obtain planning costs (equipment & lease)• Select equipment supplier & lessor (bid?)• Board approval• Documentation• Equipment ordering & delivery• Acceptance and Lease Commencement

Page 13: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Disposing End-of-LifeTechnology

• Donate• Recycle• Storage• Sell to students, parents, faculty & community• Secure your data• Document your asset transfer• Investigate your partners

Page 14: Budget Friendly Technology Leasing Solutions Service Associate Member of Illinois ASBO

Success Stories:Batavia School District 101

• Situation before 2000• Steps taken to evaluate process• Implementing the refresh program• Feedback from students, parents, faculty, & board• End-of-lease sales process• Things to avoid• Things that worked well