It is the policy of the BOCC for the County to plan issuance of lease obligations and other long-term financing agreements according to the following guidelines:

1. Lease financing is appropriate in the following situations:
   1. Whenever the introduction of leased equipment or a capital improvement results in verifiable operating savings that, properly discounted, outweigh the lease financing costs.
   2. To purchase important capital equipment or finance improvement projects for which lease financing costs can be paid for by:
      1. existing non-general fund revenues; or
      2. new, earmarked revenues approved by the voters; or
      3. incremental general fund revenues that can be specifically attributed to the introduction of the capital project.
   3. To finance projects deemed important enough (for safety, legal requirements, efficiency, or other reasons) to justify a reallocation of existing revenues.
2. The Budget and Financial Planning Department and Treasury and Financial Management will determine and document the justification for each proposed lease transaction. The justification should include the following:
   1. detailed explanation of the factors listed in the capital improvement guidelines;
   2. reasons for not recommending a “current payment” alternative;
   3. explanation for not recommending financing through general obligation or other non-lease revenue option or non-lease revenue bond issuance.

The Budget and Financial Planning Department will advise the respective department with the appropriate financing mechanism using short-term general obligation bonds/notes as the first financing option and lease-purchase option as a subsequent option. The analysis shall be conducted using appropriate analytical tools to make such evaluations.

1. The project lease payments and a cash flow statement over the life of the transaction are required for every proposed lease agreement.
2. The scheduled maturity should be less than the expected useful life of the capital project or asset(s) financed.
3. An analysis of various financing strategies should be performed to allow for the lowest possible costs to the County.