During the January 12 meeting of the Fayetteville Board of Mayor and Aldermen, the board voted on the decision to purchase a new knuckle boom truck, a truck used for the hoisting of jobsite materials.
Public Works Director and Interim Building Inspector Eddie Plunkett requested permission to purchase a new Knuckle Boom Truck at cost up to $152, 831 during the January 7 Board of Mayor and Aldermen Work Session stating that currently the city has three knuckle boom trucks, two of which are described as “really old.” Plunkett described the oldest, a 1989 model, as “the most dependable.” The one in need of replacement is a ‘98 model.
Alderman Jeff Alder asked Plunkett if he had trouble getting repair parts, to which he answered, “Yes.”
Discussion went back and forth between Plunkett, Vice Mayor Danny Bryant, Alder and Alderman Roger Martinez about the feasibility of a lease/purchase or taking money from Capital Funds to buy the truck, which would eliminate paying interest if the city borrowed the money for three years.
Martinez said with a lease/purchase there is no payment until the end of the year, at which time the truck could be turned back in for a fee if there were problems with the truck. He said leases come with a guaranteed residual or a residual value guarantee, which is defined as a guarantee made to the lessor that the value (or part of the value) of an underlying asset will be at least a specified amount at the end of the lease. This guarantee is made by a party unrelated to the lessor.
“You can lease this year with no payment until the end of the year. Then, if there’s any problem, you can take the truck back for a disposable fee,” Martinez said, adding that the cost of the first year’s lease would be approximately $40,000.
Vice Mayor Bryant, another member of the Finance Committee, asked Martinez if there would be a disposal fee with the lease/purchase program. He said that leasing isn’t a bad idea but lease companies “will always be ahead of you to recoup their costs.”
Alder, who is manager of the Fayetteville branch of First National Bank and serves on the Finance Committee, suggested buying the truck outright rather than borrowing the money. “Why give anyone interest?”
“What does this do to the Capital Fund?” asked Bryant, adding that the board is fortunate to have Alder and Martinez, who know about finances and lease/purchase programs. He then recommended buying the truck “so we can move on.”
Alderman Dorothy Small, who also sits on the finance committee, said she agrees to take the money out of Capital Funds to purchase the truck.
Alderman Donna Hartman also reminded the board that going through the bid process is lengthy and takes longer to actually get the truck in service. She then asked if the boom could be removed and if the truck could still be used. To which Plunkett said Public Works could still use the truck in a different capacity.
Plunkett said he would be “game for finding a 2020 model demo. I will look at all options. I just need a truck!”
A motion was made by Bryant, seconded by Alder, to move the purchase of the Knuckle Boom truck at a cost not to exceed $152,831 to the Tuesday night BMA meeting.
The consideration of the knuckle boom Truck replacement was the first order of new business to be considered at the January 12 meeting, with Mayor Whisenant introducing it by briefly recapping the above described work session. Alderman Danny Bryant then made a motion to purchase a new truck for a price not exceeding $152,852.31, Bryant’s recommendation being that the city make a one-time payment. The motion was then seconded by Alderman Dorothy Small and no further discussion was had. The item passed by unanimous decision.