Budget Friendly Technology Leasing Solutions

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

2. 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 Overview

3. Introduction of Leasing Presenters Jason Marquardt Director of Sales American Capital (630) 512 - 0066 x118 jmarquardt@americancapital1.com John Vonder V.P. of Business Development MMF Leasing (847) 412 - 0397 x161 jvonder@mmfleasing.com Moderated by: Alan McCloud Asst. Superintendent for Elementary Education & Supervisor of Technology Batavia Public School District 101 (630) 879-4600 x4018

4. 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. What is a lease?

5. What can be leased? • Computer Hardware • Software • Network Equipment • Printers & Copiers • Telephone Systems • And Much More!

6. 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

7. Lease A. Equipment = $300,000 Payment 1 = $100,000 Payment 2 = $100,000 Payment 3 = $100,000 B. Interest earned on $ not spent = $15,000 Interest Year 1 = $10,000 (5%) Interest Year 2 = $ 5,000 (5%) TOTAL COST (A-B) = $285,000 Purchase Equipment = $300,000 Year 1 Purchase = $300,000 Maintenance Beyond Warranty = $6,000 (est.2% for direct expense) 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 Lease vs. Purchase

8. 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.

9. 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

10. 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

11. 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

12. 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

13. Disposing End-of-LifeTechnology • Donate • Recycle • Storage • Sell to students, parents, faculty & community • Secure your data • Document your asset transfer • Investigate your partners

14. 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