Recently Omaha, Nebraska decided to replace about half their aging police car fleet with something newer. Which is all well and good. However the financing has me befuddled. Apparently the city is going to lease the vehicles for three years with an option to buy at the end of the lease. But from whom is the city leasing the vehicles?
Here's where it gets confusing. The city is setting up a non-profit government entity to purchase the police cruisers using funds raised by the issuance of bonds guaranteed by the city. What did I just say? Essentially the city is buying the vehicles and then leasing the vehicles to itself.
Why doesn't Omaha just buy the vehicles outright with the money they are using to lease the vehicles? Why does Omaha want to issue bonds to purchase the vehicles? Why is Omaha saying they are leasing the vehicles when they are in fact buying them?
As an aside, why didn't Omaha have an ongoing program to replace obsolete and unrepairable vehicles when they wear out? Seems like something a competent manager of a fleet of vehicles would do.
No comments:
Post a Comment