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Glenwood City Council approves purchase of new John Deere loader

GLENWOOD CITY — New it is!

After months of deliberation and discussions, Glenwood City’s Common Council approved the purchase a new John Deere Model 544 Loader from Nortrax of Chippewa Falls during its regular monthly meeting held Monday, December 8.

The council voted 4-0 (councilpersons Ken Peterson and Nancy Hover were not in attendance) to purchase the new loader for a final cost of $129,670 and have it financed through Hiawatha National Bank at 3.70 percent over the next five years.

The new loader’s original purchase price of $154,670 was discounted after the city received $25,000 in trade-in credits on its old loader.

Mayor John Larson presented a pair of financing proposals to the council – the one from Hiawatha National Bank and the other through John Deere Credit at 2.75 percent for the same time period.

“These are the two financing options for the loader,” Larson began bringing members’ attention to a pair of single sheet hand outs.

“The first one is for 2.75 percent through John Deere Credit and if you look at the other one (sheet) it says 3.70 and that is what Hiawatha is offering us (for financing),” stated Larson.

“We will be looking at five annual payments with either option,” added Larson.

Each annual payment through John Deere Credit would be for $28,222.81 with the exception of  the final year’s payment which would be $8.59 more. The interest portion of the payment for the first year would be $3,579.95 and would decrease each successive year.

The yearly payment to Hiawatha National Bank would be $28,995.96 with a final year payment of $29,007.92. Interest payments would start at $4,1816.66 in year one and decline to a fifth-year amount of $1,035.00.

“The total interest paid over the five years and the difference (between the two entities) comes out to about $3,869,” the mayor told the council.

““Personally I still lean toward Hiawatha,” Larson continued. “It comes out to about $65 per month difference.”

“And maybe they won’t up our rent on this place if we get it through them,” Larson said jokingly.

The City currently leases the city hall building from Hiawatha National Bank.

“But $3,800 is $3,800,” noted Larson.

“That is what Nancy (Hover) was talking about at the last meeting,” interjected council member Terrance Klinger. “If  we keep it in town, if possible, and then when you really need the bank they are there to help you.”

But Klinger did echo the mayor’s statement that $3,800, however, is $3,800 in savings.

When Klinger asked about early pay-off, Larson said that there was no early pay-off penalty with either financing option.

Larson told the council that he did have John Deere figure out what the cost of a straight lease would be. He reported that a five-year lease would run $10,731 per year instead of the $28,000 to $29,000 per year for five years to purchase.

Larson did ask for the council’s thoughts on leasing saying there is something to be said about having something new every year.

“My opinion is that we own it,” said Klinger. “If we maintain it properly it will last for 25 years and be in good shape. I know it will be a burden for five years to pay for it but then we are in good shape again.”

“I have heard some comments, because it is my job to listen to the taxpayers in town, because we have upgraded our equipment so much the last couple of years,” Klinger added.

“But you can’t be airing the tire up every day, the pin is worn and tires are $2,000 a piece,” not Klinger of the city’s old loader.

“That is just it,” councilperson Ben DeGross said. “Our equipment is being maintained better.”

“I know we have a tight budget and it is a concern,” Klinger said but pointed out that it is priority need.

After some more discussion, councilperson DeGross made the motion to purchase with financing through Hiawatha National Bank.

Members Klinger, DeGross, Steve Lee and Crystal Booth all voted in favor of the motion.

Doug Doornink, Director of Public Works, noted that the new unit does have a 7-year warranty and will come with a three-yard bucket but that a special frame will have to be purchase to attached the snow blower.

In other business, the Common Council:

• Approved an operator’s license for Lisa M. Lovgren

• Learned that payment was received from the Glenwood City School District for its share of this past summer’s swimming lessons  held at the city pool. Mayor Larson also told councilpersons that the Town of Forest had also submitted payment for its residence use of the city’s recycling center. He also said that there was no indication from Forest Township officials that they would not be using the garbage and recycling center in 2015.

• Approved a request by Glenwood City Police Chief Robert Darwin to attend the Wisconsin Chiefs of Police Association Conference in Wisconsin Dells February 9-11 of next year. Darwin reported that the cost of the 3-day conference was $135 plus approximately $240 for the hotel stay ($80 per night reduced rate as part of the conference registration.) The chief did note that the cost for the conference was covered by his training budget.

• Will review its personnel and drug and alcohol policies beginning in January.