Vice President for
Finance & Operations
Twamley Hall, Room 314
264 Centennial Drive Stop 8378
Grand Forks, ND 58202-8378
Phone: 701.777.3511
Fax: 701.777.4082
UND.edu/finance-operations
To:
Alice Brekke, Vice President for Finance and Operations
From:
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Date:
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RE:
Lease Agreement
Brief summary of lease agreement: Click here to enter text.
The attached lease agreement has been reviewed and meets the following criteria (check all that apply):
☐ Lease meets policy criteria under SBHE policy
804: Equipment and Personal Property Leases.i
☐ Lease meets policy criteria under SBHE policy
909: Real Property Leases.ii
NDCC chapter 53-01. (if applicable, statement
required in agreement)
☐ Lease requiring expenditure of public funds by
UND is limited to the current biennium for which
funds have been appropriated or includes a
termination clause permitting termination at the end
of the biennium if appropriated or other available
funds are insufficient to continue the lease
payments. (if applicable, statement required in
agreement)
Lease is categorized as:
☐ Capitaliii or ☐ Operatingiv
☐ Lease or rental is for a term of more than one
year, and the real property is owned by UND.v
☐ Lease includes a restriction prohibiting the lessee
from making material alterations or improvements
on or to the leased property without prior written
authorization of the institution. (statement required
in agreement)
☐ Lease does not exceed ten years for leases of
agriculture land which reserve rent or service and
leases of revenue producing buildings.
☐ Under SBHE 909, lease term is five years or
more.iv (pages 2-4 of this document must also be
completed)
☐ Lease is limited to a term of not more than ten
years and includes a clause permitting termination
by the institution upon sixty days’ written notice for
cafes, restaurants or other concessions contracts. (if
applicable, statement required in agreement)
☐ Lease is not for the purpose of sparring or
wrestling exhibitions except in compliance with
☐ Lease entered into by UND provides for total
payments by the institution, including lease, or
rental, interest and all other payments over the
lease/rental term, of $500,000 or more.iv (pages 2-4
of this document must also be completed)
☐ Lease has been submitted to and reviewed by
UND’s General Counsel, and document has been
revised as directed by General Counsel. (required
prior to submitting to VPFO; attach documentation
from General Council the agreement has been
reviewed)
Page 1 of 5
Complete this page if the total lease payment paid by UND is $500,000 or more, or as identified under
SBHE 909, has a lease term of five or more years.
University of North Dakota
June 29, 2016
For use with SBHE policies 804, Equipment and Personal Property Leases, and 909, Real Property Leases: Institution
as Lessee – Lease entered into by UND provides for total payments by the institution, including lease, or rental,
interest and all other payments over the lease/rental term, of $500,000 or more, and/or lease term is five years or
more (policy 909 only).
REQUEST FOR CHANCELLOR APPROVAL
1a. CLASSIFICATION (select one):
1b. CLASSIFICATION (select one):
☐ Capital
☐ New lease
☐ Operating
☐ Renewal
2. LEASE TERM:
Beginning date (M/D/Y)
End date (M/D/Y)
If renewal, what is existing lease term?
Option to renew?
If yes, renewal terms
Click here to enter a date.
Click here to enter a date.
Click here to enter text.
☐ Yes ☐ No
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3. PAYMENTS:
Rate of interest
Payment
Each payment includes
For total payment of
Total number of payments to be made during lease term
Total sum to be paid during lease term
Administrative or other costs
Describe
Source of funds
*Click here to enter text.
Click here to enter text.%
☐ Fixed ☐ Variable
$Click here to enter text.
principle
$Click here to enter text. Interest
OR
☐ See attached exhibit for
payment breakdown
$Click here to enter text. made
Click here to enter text.
Click here to enter text.
$Click here to enter text.
$Click here to enter text.
Click here to enter text.
Click here to enter text.*
4. SUBJECT PROPERTY:
Vendor Name
Address
Contact Information
Description of property (include model or
Click here to enter text.
Click here to enter text.
Page 2 of 5
Complete this page if the total lease payment paid by UND is $500,000 or more, or as identified under
SBHE 909, has a lease term of five or more years.
serial number and manufacturer)
Location of property
Estimated value of property at start of lease
Intended use of property
Click here to enter text.
$Click here to enter text.
Click here to enter text.
5. OTHER COSTS (estimated operating, utilities, maintenance, etc.) and SOURCES OF FUNDING:
Click here to enter text.
6. Other project related debt, if any:
Click here to enter text.
7. EXPLANATION OF NEED FOR LEASED EQUIPMENT OR PERSONAL PROPERTY, including discussion
about consistency with Campus Strategic Plan and Budget:
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8. IF CAPITAL LEASE:
a) Description of property to be transferred to state or institution:
Click here to enter text.
b) Date of transfer and projected future use:
Click here to enter text.
c) If applicable, description of improvements to be paid for with public funds and explanation
regarding necessity of improvements:
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d) If applicable, estimated project timeline and completion date for capital lease improvements:
Click here to enter text.
9. INSTITUTION CONTACT INFORMATION: contact name, phone number and email address:
Click here to enter text.
10. Provide written analysis per 804, #6 (lease vs. buy), as appropriate (Prior to acquisition of an asset
as the result of a lease agreement or other debt financing arrangement, the responsible institution
Page 3 of 5
Complete this page if the total lease payment paid by UND is $500,000 or more, or as identified under
SBHE 909, has a lease term of five or more years.
official shall, unless the decision is dictated by funding limitations, prepare a written analysis
documenting the decision to acquire the use of the asset, which shall be filed with the lease
agreement or other document setting forth the terms of the agreement. If the decision is dictated by
funding limitations, the official shall document those limitations. Consistent with NDCC section 5444.1-06, each institution shall provide to the office of management and budget as part of the biennial
budget process a list of every individual leased asset, excluding real estate, with a value of at least
fifty thousand dollars and every group of leased assets comprising a single system with a combined
value of at least fifty thousand dollars acquired through a capital or operating lease arrangement.)
Attach NDUS Lease/Purchase Analysis Worksheet or Click here to enter text.
11. Attach current list of institutional operating and capital lease debt.
Page 4 of 5
i
SBHE 804: Equipment and Personal Property
1. Defined as equipment and personal property (property that is movable and is not affixed to or associated
with the land).
2. Requires chancellor approval if lease/rental by UND provides for total payments by UND of $500,000 or
more. There is no stipulation on lease duration.
3. For more information see SBHE policy 804 and NDUS procedure 804.
ii
SBHE 909: Real Property
1. Defined as land and buildings or other structures attached or affixed to the land, including attached and
integrated equipment, anything growing on the land, including crops, and mineral interests.
2. Requires chancellor approval if lease/rental is for a term of more than one year and the real property is
owned by SBHE or UND.
3. Requires chancellor approval if lease/rental by UND provides for total payments by UND of $500,000 or
more.
4. Requires chancellor approval if lease/rental term is five years or more.
5. For more information see SBHE policy 909.
iii
Capital – If at its inception a lease meets one or more of the following criteria:
1. A list lease transfers or permits transfer of ownership of the property to the lessee by the end of the lease
term;
2. The lease contains a bargain purchase option;
3. The lease term is equal to 75 percent or more of the estimated economic life of the leased property.
However, if the beginning of the lease term falls within the last 25 percent of the total estimated
economic life of the leased property, including earlier years of use, this criteria shall not be used for
purposes of classifying the lease; or
4. The present value at the beginning of the lease term of the minimum lease payments, excluding that
portion of the payments representing executor costs, such as insurance, maintenance, and taxes to be
paid by the lessor, including any profit, equals or exceeds 90 percent of the excess of the fair value of the
leased property to the lessor at the inception of the lease over any related investment tax credit retained
by the lessor and expected to be realized by him. However, if the beginning of the lease term falls within
the last 25 percent of the total estimated economic life of the leased property, including earlier years of
us, this criterion shall not be used for purposes of classifying the lease. A lessor shall compute the present
value of the minimum lease payments using his incremental borrowing rate, unless (i) it is practicable to
learn the implicit rate computed by the lessor and (ii) the implicit rate computed by the lessor is less than
the lessee's incremental borrowing rate. If both of those conditions are met, the lessee shall use the
implicit rate
iv
Operating – If none of the above (within Capital) apply.
v
Requires chancellor approval. The chancellor may, in the chancellor's discretion, submit a lease to the Board for
Board consideration and approval in lieu of chancellor approval.
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