1. MASTER LEASE PROGRAM
April 2017

2. What Is Master Lease?
Capital Lease/Lease-Purchase Agreement for Capitalized Assets
Not an Operating Lease
Centralized Lease Program
Administered by Department of Administration Capital Finance Office
Available to ALL State Agencies
Created in 1992; Has Financed Nearly $730 million of Leased Items

3. Examples of Capitalized Assets
Ordinary Capitalized Assets
Personal Computers
Mobile Computers
Systems Furniture
Info Tech Infrastructure (Servers)
Agriculture Research Equipment (UW)
Medical Research Equipment (UW)
Trucks
Golf Course Maintenance Equipment (UW)
IPADS/Tablets
Airplane Engines

4. Examples of Capitalized Assets
Unusual Capitalized Assets
Systems Development - Costs of Contractor Developing a “System” for Agency
Agency Accountants Need to be Involved - Is System Going to Be Capitalized Asset?
Examples – STAR Project, Vital Records, Call Center
Pre-paid Service Contracts
Energy Performance Contracts - WEI-3 Program

5. Master Lease Cannot Be Used For
Operating and Maintenance Expenses
Real Estate/Buildings Occupied By State
Cash Management
Items Presenting Challenges to Master Lease (Need Case-by-Case Review)
Reimbursement of Costs Previously Paid
Procurement of Equipment from State Agency (BSI)
Wages/Fringe Benefits of State Workers Developing a System

6. Why Lease?
Spread Acquisition Costs Over Expected Useful Life. Maximum of Seven Years (Long Term Will Be On a Case by Case Review).
Unanticipated or Large One-Time Purchases
Match Financing Costs to Depreciation or Replacement Cycle

7. If Lease, Master Lease Required?
NO! Encourage “Shopping” For Other Options
Vendor Financing

8. Benefits of Master Lease
Centralized Program – Minimal Paperwork!
Nearly 18 Months to Resolve Third-Party Lease Agreement.
Use Agency’s Procurement Procedures
Large Lease Program; Competitive Rates
July 2016 Financing; 1.426% (TIC) for Seven-Year Financing.
Current Variable Interest Rate is based upon 1-month LIBOR.
Prepayments At Anytime/No Penalty

9. Approval Process
Agency Makes Decision to Use Master Lease Program
Agency Submits “Master Lease Request for Use and Approval Form” to DOA Capital Finance
DOA Capital Finance, State Budget Office, and (for IT Items) Division of Enterprise Technology Review/Approve Master Lease Request
PRELIMINARY APPROVAL; Deputy Secretary of Administration
Agency Completes Procurement Process
Agency Accepts Equipment; Forwards Invoice and “Master Lease Notice of Equipment Acceptance Form” to DOA Capital Finance Office
Acceptance Form Signed by DOA Capital Finance, Legal Opinion Signed by DOA Legal Counsel, and Lease Schedule signed by Lessor and Agency
FINAL APPROVAL; DOA Capital Finance Signs Lease Schedule

10. Master Lease Repayments
Semi-Annually on September and March 1
Agency Agrees to Payments Being “Automatically” Withdrawn by State Controller’s Office

11. Master Lease Prepayments
Prepayments Allowed Any Time; No Penalty.
Requested Prepayments Approved by State Budget Office.
Sources; Budgeted Funds, Unexpected Federal Grants, Other.

12. State of Wisconsin Master Lease Program
State of Wisconsin Department of Administration (Lessee)
Third Amended
And Restated Master Lease #1992-1
Firstar Bank, National
Association (Lessor)
Master Indenture
Firstar Trust Company (Trustee)
Cross-Collateralized Pool of Leased Items
Supplemental
Indenture
Supplemental
Indenture
Supplemental
Indenture
Supplemental
Indenture
COPs- Revolving Facility
COPs
COPs
COPs
Note: U.S. Bank National Association is currently successor to Firstar Bank, National Association and Firstar Trust Company