Equipment replacement financing? -Kansas Cancel The title field is required!

1. Kelley Storch

   

   1 posts
   
   4/29/2013 2:04 PM

   First off, here is the situation…
   
   We are a municipal golf course in Kansas.
   Years ago when the economy was in better shape, we would replace equipment on 5-7 year rotation depending on the type of equipment. This was budgeted through Capital Improvement Program funds and varied each year depending on what equipment was scheduled to be replaced that year. However, due to the down turn in the economy and revenue at the golf course being down, the CIP line items for equipment haven't been funded for almost 10 years now.
   
   Now we are left with equipment that is past its realistic service life and has a proportionately low trade in value. Currently we are looking at what options we have to replace our aging equipment. Currently being discussed is the lease vs. buy debate and I can see advantages to either one. More than likely either one would have to be financed through bonds.
   
   Are we missing another option somewhere, what are all you other guys in similar situations looking at (or have done)?
   
   Thanks,
   
   Kelley Storch
   Superintendent
   Emporia Municipal Golf Course
   620-343-5616 Office
   kstorch@emporia-kansas.gov

   
   
   
   
2. Melvin Waldron

   

   43 posts
   
   4/29/2013 4:04 PM

   Kelley,
   
   We are a municipal park system and have been slow at getting new equipment. The last two pieces we have purchased have been through a lease deal as I have been told. The percentage of financing have been under 2% for us. After the lease is done, the equipment is ours. I don't know how that differs from purchasing things and making payments. We don't get tax benefits from leasing expenses or from depreciating equipment as far as I know.
   
   We have been working through a local bank branch to get the money to buy and then make I think a yearly lease payment back. I'm not 100% sure on that.
   
   We received a triplex greensmower 4 years ago that we just finished paying off, and two years ago picked up large area rough mowers. This has been done in other areas of our parks department.
   
   Any talks that deal with bonds in our department have been more do to with possible facility upgrades and construction talk, but we haven't moved any farther then talk.
   
   Mel

   
   Melvin H. Waldron III, CGCS, Horton Smith Golf Course, City of Springfield/Greene County MO
   
   
3. Timothy Johansen

   

   0 posts
   
   4/29/2013 8:04 PM

   Kelley- When I took over 3 years ago, we had not replaced any mowers for at least 10 years and were mowing fairways with a 1990,1996 and a 1998 fairway mower. Most of the time only 2 were running and frequently it was the 90 that was taking care of half the fairways. Money was put into the CIP because it was becoming very difficult to get anything done. We bought quite a few used mowers that came off lease. They had relatively low hours on them and in 2 years replaced everything and a little more. Our used equipment has been sold on Gov Deals online auction. It has been our best avenue for getting rid of everything within the city. Good luck with getting some new equipment !

   
   
   
   
4. Melvin Waldron

   

   43 posts
   
   4/30/2013 7:04 AM

   Tim,
   
   Interesting that your city was willing to buy some used equipment. Our city is somewhat reluctant to purchase used. We have really only done some carts since they are under $2,000 and we don't have to send it out to bid.
   
   Would be curious how you guys were able to do that. Only reason I have heard about not buying used is, the worry about liability if safety switches and the like are not working properly? And I don't know how true that is.
   
   Thanks!
   
   Mel

   
   Melvin H. Waldron III, CGCS, Horton Smith Golf Course, City of Springfield/Greene County MO
   
   
5. James Smith

   

   112 posts
   
   12/27/2013 10:12 AM

   We always purchase our equipment on a $1 buyout lease. the only issue we get is the yearly property tax that is generally equal to one months note on each piece we lease. it is always due in January, our slowest time of the year. I generally get 10 plus years on my equipment though, still using a 1999 Jac LF3400 fairway mower.