The Marshall County Highway Department is moving ahead with financing for the lease purchase of new trucks.
Earlier this year, the county was approached by Republic First National Bank to discuss lease financing for road maintenance equipment. The Marshall County Commissioners at the time stated they were used to purchasing equipment at the highway department outright.
Proposals were not finalized until relatively recently, but plans have been in the works since the possibility of financing was raised in July. Highway Department Administrator Laurie Baker told the commissioners they’re ready to move forward.
“We have everything in order,” says Baker. “They would close it by the end of this week if we sign it [Monday].”
Republic First National Bank works almost exclusively with government entities on similar lease purchases. Among the advantages the company offers is a non-appropriation clause in their contracts, which allows the county to have multiple, one-year lease periods as opposed to one, multi-year lease. The arrangement is simpler for the county government to budget.
On Monday, the Marshall County Commissioners approved a resolution for the lease purchases. County Attorney Jim Clevenger advised that when using a third party for financing, it may limit remedies for managing defaults with the truck.
“They’re going to get paid whether you have issues with the trucks or not,” says Clevenger. “That’s one thing you need to go into with your eyes open. It limits the consumer’s, the county’s, remedies of what might otherwise be the case given these arrangements.”
The Marshall County Highway Department has revisited the issue of addressing their aging equipment fleet numerous times during county commissioner meetings.
The county piggybacked off a purchase of Western Star Trucks out of Kosciusko County in July of this year in an attempt to partially remedy that situation. Those four single axle and two tandem axle trucks are expected to be delivered from Fort Wayne early next year.
On Monday, the commissioners approved a resolution entering into contract with the financing company to execute the purchase of the truck leases. Financing should be completed by this Friday, with money going into escrow. Marshall County will have an annual payment of $231-thousand over five years. The first payment comes due in 2018.
