This document discusses the advantages of municipal lease-purchase agreements and certificates of participation (COPs) compared to municipal bonds for financing municipal projects. Municipal lease-purchase agreements for projects under $2 million are placed with a single investor and have a maturity of around 5 years. COPs are better for larger projects over $2 million, with terms of 10-25 years. Key advantages of these alternatives over bonds include not requiring voter approval, providing 100% financing including taxes, having lower costs than bonds, and having a faster and simpler documentation process.

1. July 2013
20 Division St., Coldwater, MI 49036 d: 248-238-7214 f: 888-548-9213
cmac@curtisfunding.com www.curtisfunding.com
Municipal Financing
Made Easy
Lease-Purchase vs. Bonds
Many municipalities over the past few years have ignored municipal tax-exempt finance
and how easy it is to solve their equipment needs. They all know about the cash they
don’t have in this year’s budget, or that they’ll have to commit to a major process to
obtain a municipal bond. Municipal Lease Purchase agreements for single purpose
needs and Certificates of Participation for larger, multi-purpose financed projects by
contrast, are faster, less costly, easier to acquire and are debt-free facilities when
compared to municipal bonds.
Municipal Lease Purchase transactions of less than $2.0MM are placed with a single
investor and carry a maturity of about 5 years. Transaction size starts at around
$10,000 and ramps up to under $2.0MM depending on the useful life of the asset,
project scope, and the type of collateral or equipment. Vehicles, artificial turf and office
equipment are typical items that qualify for Municipal Lease Purchase agreements.
More demanding, larger-scope projects, i.e., multi-use requirements where equipment
and real estate or leasehold improvements are needed, and where the expense totals
$2.0MM or more, Certificates of Participation are the low-cost, effective non-debt
alternative that can be amortized over 10, 15, 20 and 25 years.
Below, and in the table that follows, you can read about other advantages that
Municipal Lease Purchase and Certificates of Participation agreements have over bonds:
Voter approval not required
100% Financing is available including delivery,
installation and sales tax (where applicable)
Cost effective – nominal origination costs compared to
Bonds
Equipment and Real Property qualify
Flexible payments: Monthly, Quarterly, Semi-Annual,
Annual or Delayed Payments are available
Reserve Accounts are not required
Documentation is Uncomplicated and FAST!

2. July 2013
20 Division St., Coldwater, MI 49036 d: 248-238-7214 f: 888-548-9213
cmac@curtisfunding.com www.curtisfunding.com
Municipal Lease-Purchase vs. Bonds
*The COP process is similar to a Bond, but simpler and there is no voter approval necessary, an
expensive proposition in itself. COP’s are basically sold to the same investors as Bond’s because they
are sold in the Public Marketplace, and because the entities’ buying the Certificates is a very broad
marketplace, demand is robust. COP’s are also more flexible in dollar size, structure and term than is
usually available from the Private Placement sources.
Financing
Characteristics
and/or
Requirements
Public
Bond
Offering
Single
Source
Financing
Certificates
Of
Participation
Why “NO” to Bonds
is the Better Answer
Compliance with
SEC
YES
NOT
REQUIRED
YES*
Disclosure rules do not apply to
Single Source
Voter approval
required
YES NO NO Voter approval not required
for Single Source or COPs
Exact rates are
unknown prior to
closing
YES NO YES*
Rates quoted before funding; rate
lock option available; COP not-to-
exceed rate provided at contract
Underwriter’s
Fees YES NO YES*
No additional fees for Single
Source; COPs fees are disclosed
and nominal
Rating Agency
fees
YES NO YES*
No additional fees for Single
Source; COP fees are nominal vs.
bonds
Printing Costs YES NO NO No additional fees
Reserve Fund YES NO NO Not required
Prepayments only
on call dates
YES NO NO
Prepayment options throughout
term; not available with bonds
Multiple Investors YES NO YES*
Private Placements; COPs are
simpler than bonds and benefit
from a robust demand vs. bonds
Semi-Annually
Only YES NO YES*
Payment schedule determined by
municipal entity
Time Consuming
Documentation
Process
YES NO NO
One simple process for both
Single Source and COPs