In
many instances, individual energy projects will be part of
a Master Energy Plan that involves many departments, and
includes equipment and machinery with different dollar thresholds,
and different acquisition and implementation dates.
Rather than entering into a new lease agreement every time
an asset is acquired, an organization can consolidate the financing
of all equipment acquisitions under a single, comprehensive
arrangement. This arrangement, a Master Lease Agreement, establishes
the principal terms and conditions that will apply to all financed
acquisitions, yet allow for new equipment or groups of assets
to be added to the agreement via lease schedules which pertain
to the specific assets being financed. (Periodic payments under
each lease schedule are structured in a manner that reflects
the useful life of the asset, as in the case of a capital lease
that is employed within a capital acquisitions program that
extends over a multi-year period, or an asset’s intended
service period, as in the case of an operating lease that is
employed as a means for acquiring equipment that is to be upgraded
or replaced at a pre-determined time in the future.)
The full utility of a Master Lease Agreement is twofold. One,
it has the functional ability to capitalize an energy project
and coordinate the procurement of several assets from numerous
suppliers at varying frequencies through a centralized process.
Two, individual disbursements can be implemented through lease
schedules; each with a unique identification number which enhances
the timely collection of a project’s recurring spend
data – whether it be relative to an asset procured for
a single user agency, or an open-ended funding vehicle that
can track the aggregate spend for equipment acquisitions by
multiple departments.
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