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By entering into a lease-purchase agreement, public entities can obtain ownership of equipment without debt obligation. Payments are regarded as a current obligation, not a debt, and require only the approval of the governing body rather than a public referendum.

Lease-purchase agreements require that payments from government agencies are subject to annual appropriations. This means the agency must appropriate the necessary funds to meet debt service each and every year, until the obligation is paid in full.

Typical lease- purchase terms range from twelve months to ten years, depending on the type of equipment and its useful life. Payment terms can be set up monthly, quarterly, semi-annually or annually.  
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