Troup County is set to see a $134,000 reduction in the annual cost of leased equipment, county officials said Friday.
Troup County, five years ago, began leasing equipment for the landfill and road departments from Caterpillar instead of buying and maintaining County-owned equipment, said County Engineer James Emery. The county has been paying $317,000 annually for 14 pieces of equipment, eight for the road department and six for the landfill.
On Nov. 30, the county will enter a new lease, County Commissioners approved Friday, with an annual cost of $183,000 for leases on 14 new pieces of equipment. The county will save because of Caterpillar’s buyback program and because the county will return its current equipment with less use and in better condition than originally estimated.
“We were guaranteed ($1.085 million), but we’re actually going to receive much more than that in trade-in value now because some of the equipment has lower hours than we were allowed, and that equipment’s been well maintained,” Emery said. “Their trade-in values at this point total $1,520,000.”
That leaves $698,000 in equity that could come back to the county, but the county will apply that value for the buyback in its new lease. That will fetch a lower cost, and in return lower annual payments, and the county is guaranteed that Caterpillar will buy back the equipment at the end of the term for the final, “balloon” price.
“The guaranteed amount that they will buy back the equipment is identical to the balloon payment amount. So at the end of this five-year period, we won’t have any payment due,” Emery said. “… That would be a worst-case scenario, and, as we saw this time, we didn’t just get back the guaranteed amount, we got back much more than the guaranteed amount because of the use of equipment.”
Emery said the interest on the lease is 2 percent, lower than when the county made the previous lease agreement.
“The way we keep going, we’re going to get check from Caterpillar, won’t we,” said Commissioner Ken Smith, jokingly.
In other matters, the board:
•Approved replacing seven poll workers for elections. As part of the county’s requirements for its hiring freeze, commissioners have to approve any hiring.
•Signed off on an agreement with LaGrange, West Point and Hogansville for the distribution of local-option sales tax, or LOST, funds. Troup County and LaGrange each will receive 45 percent of funds and West Point and Hogansville each will receive 5 percent, which is unchanged since the agreement last was updated.
•Gave final approval to its required update of its capital improvement elements plan.
•Approved placement of a 157-foot cell phone tower at 236 New Hutchinson Mill Road.
•Approved rezoning 82 acres of land at Vulcan Materials Road that the company plans to use to store materials and eventually will create a vegetative berm. The rezoning came with conditions that the company not use the land for blasting and a periodic check of the berm by county officials to ensure it meets standards.
Matthew Strother can be reached at email@example.com or 706-884-7311, ext. 229.