Municipal / Tax-Exempt Leases:
Kensington serves a variety of state, local and other quasi-governmental, tax exempt entities to acquire equipment and services that is essential to their mission.
Our Tax-Exempt Lease Agreement was developed as a tool for this market segment to finance capital equipment in a manner that meets the basic objective of debt (spreading the cost of financing over the life of an asset) while not violating constitutional or statutory limitations on the issuance of public debt. Most state constitutions require a voter referendum to allow the issuance of bonded indebtedness. The Tax-Exempt Lease does not constitute debt, since the lessee's payment obligation is appropriated on an annual basis. Thus, the contract might last for years, but each fiscal year's rental payments are made out of the government entity's current budget and thus, no voter referendum is required.