What type of lease allows a jurisdiction to return an asset to a vendor at the end of the lease period?

A true lease, often referred to as an operating lease, allows a jurisdiction to return an asset to the vendor at the end of the lease period. This type of lease does not involve a purchase agreement for the asset at the end of its term and typically includes options for renewal or return without acquiring the asset's ownership.

The structure of a true lease provides flexibility for jurisdictions, particularly for assets that may need to be updated frequently or that do not need to be owned long-term. At the end of the lease, the jurisdiction can simply return the asset to the vendor and may have the option to lease a newer model or different asset as per operational needs.

In contrast, a capital lease typically requires the lessee to assume ownership of the asset at the lease's end, meaning it involves obligations similar to that of purchasing the asset and does not offer the flexibility of simply returning it. The debt service reserve fund and tax increment financing bonds relate to financing mechanisms rather than lease agreements and do not pertain to the leasing and returning of physical assets.