DASNY Helps Health Care, Higher Education and Non-profit Organizations Fund a Record $219.6 Million in TELP Equipment Leases in 2008
In 2008 the Dormitory Authority of the State of New York (DASNY) structured a record $219.6 million in low-cost loans that enabled two dozen hospitals and higher-education institutions to acquire critical high-tech equipment.
DASNY was able to accomplish this thanks to its 15-year old Tax-Exempt Equipment Leasing Program (TELP), a landmark initiative in which the Authority uses its tax-exempt status to create a low-cost equipment lease program that benefits a host of private not-for-profit institutions across New York State.
“TELP is the key that unlocks the door for institutions to sophisticated cutting-edge, front-line equipment and technology on a cost-competitive basis,” said DASNY Executive Director Paul T. Williams, Jr. “Over the life of our TELP program these financings have allowed scores of institutions to access the latest equipment and technology to help them provide the best services possible to New Yorkers.”
“We at Memorial Sloan-Kettering Cancer Center find the TELP process to be an extremely cost-effective and efficient tool for financing capital equipment purchases,” said Mark Svenningson, Corporate Controller at the New York City medical center. “By using TELP financing, we effectively lower borrowing costs, match the useful life of equipment purchases to the life of the financing and strategically manage our mid-term capital needs via this disciplined programmatic approach.”
Since the inception of TELP in 1994, DASNY has structured 349 leases valued at $1.9 billion for higher education, health care and other eligible not-for-profits across New York State. Over the life of the program, 131 different hospitals, nursing homes, colleges and universities and have participated in the TELP program, many of them multiple times.
Equipment acquired through TELP includes telecommunications, information technology and computer systems, CT scanners and other imaging systems, angiographic equipment, MRI systems, lab analysis equipment, and energy efficiency equipment.
For more information about the Dormitory Authority’s TELP initiative please contact Art Ware at 518-257-3373, aware@dasny.org, or go to www.dasny.org/telp.
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Tax-Exempt Equipment Leasing Program
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Health care, higher education and other authorized non-profit facilities across the state have been paying lower rates on equipment by taking advantage of the Dormitory Authoritys Tax-Exempt Equipment Leasing Program (TELP). More than 300 leases for equipment like CT scanners, MRI equipment and computer and information systems have been arranged through the Authoritys program, with a total value of more than $1.5 billion. Those who lease through this program get the benefit of the best interest rate available, simplified documentation and the ease of payment to a single source for multiple equipment purchases.
Many Authority clients use TELP to improve their computer systems, including John T. Mather Memorial Hospital in Port Jefferson, Suffolk County.
How does TELP work?
TELP converts a two-party lease structure into a tri-party lease and sublease structure. Your facility makes payments to the Authority, but the payments are assigned to your lease financing organization. Because the lease financing organization does not pay federal, state or local taxes on the interest portion of the lease payments, the interest component of the lease is generally reduced by about a third.
How much can be saved?
On average, you can save approximately $100,000 on each $1 million leased. Dormitory Authority TELP lease fundings average $4.5 million, and range from $386,000 up to $44 million. Savings vary according to the interest rate. For example, a hospital participating in TELP closed a lease of $5 million to fund various radiology, MIS and other hospital/medical equipment at a rate of 3.86 percent. Commercial lease payments at the time averaged 8.5 percent. By using the Authoritys TELP program, this customer saved $500,000 on its equipment over the term of the lease. Whats more, several recent TELP leases are at or below the 2 percentage point level.
Pluta Family Cancer Center, a Rochester area cancer center, used TELP to obtain a linear accelerator, which allows the facility to deliver new, complex treatments such as intensity-modulated radiotherapy (IMRT). Since the equipment was installed, the Center has accepted more than 600 new patients.
What types of facilities and equipment are eligible?
Any Dormitory Authority client can use TELP, including any higher education institution, non-profit hospital, residential health care facility, diagnostic and treatment center, or other authorized non-profit organization. Some of the equipment leased to date includes:
- Computer equipment
- Campuswide network systems
- Radiology equipment
- Angiographic systems
- CT scanners and other imaging systems
- MRI systems
- Laboratory/clinical analysis equipment
- Telecommunications equipment
- Energy management equipment
What is the application process?
Documentation for TELP involves only one master lease and standardized paperwork to save time on subsequent requests. Many of our clients have come back multiple times for equipment leases. Once the initial master lease is set, additional equipment can be acquired by amending the master lease agreement.
Our staff can take you through each step of the process. It includes a simplified two-part application, required Certificate of Need for the State Health Department (for health care leases only), required public notice of the lease, and approval by the Public Authorities Control Board. The Authority works with the borrower and lessor to complete documentation and close the lease. Authority staff can also assist in recommending several lease funding sources that have the lowest borrowing rates. On average, the process takes six to eight weeks.
Where can I get more information?
Contact Art Ware, TELP General Manager at the Dormitory Authority of the State of New York, 515 Broadway, Albany, NY 12207, telephone 518-257-3373 or aware@dasny.org.
Power of Two
Since January 2000, the Authority has partnered with the NYS Energy Research and Development Authority to help clients realize efficiencies with facility energy management. Through this program, NYSERDA offers financial incentives and technical assistance, while DASNY offers financing solutions. For more information on NYSERDA Energy Project Development incentives, contact the DASNY representative above or Matt Brown at 518-862-1090 ext. 3336 or www.nyserda.org.
Lake Shore Health Care Center used TELP to lease natural gas-fired cogeneration equipment to reduce its electricity and thermal energy costs. The savings will be used to pay the $800,000 costs of the five-year equipment lease.
Testimonials
“DASNYs TELP program beat all of the competition for our equipment leasing needs this year. It is the most cost-effective program around, and it is simple, straightforward and the easiest financing weve ever done.”
Kathryn Mullaney
Vice President for Finance and Treasurer
St. Lawrence University
“The Hospital has utilized the TELP program three times and found it to be the best source of funds for equipment financing.”
Edward A. Zaidberg
Sr. Vice President, Finance
New York Methodist Hospital
Brooklyn, New York