By Jeremy Burnham
Reporter 

Adams County adds three new graders via seven-year lease

 

Last updated 6/27/2019 at 9:30am

Contributed photo

A John Deere grader in action. Adams County recently leased three new John Deere 770 G Motor Graders to add to its fleet. The graders are used by the county for jobs such as grading gravel roads and plowing snow.

Adams County has leased three new John Deere 770 G Motor Graders.

Adams County Public Works Director Todd O'Brien informed the county commissioners at their meeting on June 24 that the graders had been delivered.

Graders are used by the county for several jobs, such as grading gravel roads and plowing snow. The county keeps a fleet of 11 graders in operation. The three new machines replace three old ones that were aging.

"The three that got replaced were from 2006, 2006 and 2003," O'Brien said in an interview with The Journal. "One of them have almost 12,000 miles on it. [Another] needs an engine replaced."

The county is leasing the graders for seven years, with 5,000 hours of use for each grader over the seven years. There is an option for the county to own them outright at the end of the lease. Should the county opt for ownership, all payments through the life of the lease would total just over $910,000. However, that number isn't as large as it seems.

The first payment is larger than the rest of the yearly payments, however, the county will not be spending any new money on it. The first payment is $183,000 and is being paid entirely with the trade-in value of the three graders being replaced. The county will pay cash for the next six yearly payments of $33,681.

The final payment is $525,000 at the end for ownership. The county can opt out of that final payment and continue leasing the machines at $33,681 a year instead.

The decision of whether or not to make the final payment and own the machines outright doesn't have to be made until the end of the lease. So, the only cash the county is committed to spending is the six yearly payments of $33,681. O'Brien says this is a good deal.

The $33,681 yearly payment gives the county a combined 2,143 hours a year out of the three graders. That breaks down to a little less than $16 an hour.

"The thing we want to say is we think this gives us the best bang for our buck for operating new equipment that is fully under warranty at a low hourly rate," O'Brien said. "It doesn't include an operator or fuel, but having brand new equipment at the dollar value we're getting it for, we think is a good deal."

O'Brien said the graders will be put into operation in the coming weeks.

 

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