KITTANNING – What is the difference between a purchase and lease? About $1 – according to an ordinance approved by Kittanning Borough Council on Monday night for a 2018 garbage truck.
First National Bank gave approval in October to lease the full amount of $200,358 for a period of 84 months beginning in January 2018 and ending in December 2024. The monthly payment will be approximately $2,667. At 3.3% interest, the amount of the interest payments will total $23,688 by the end of the term.
The ordinance was drafted by Kittanning Borough Solicitor Ty Heller and approved by Council. The signed ordinance must now go to the Commonwealth of Pennsylvania for customary approval under the Local Government Unit Debt Act.
Heller said he didn’t foresee any problems obtaining state approval to obligate the Borough.
“You have sufficient borrowing base to make the loan based on the calculations we have done before for the interim financing that we have done, so many of them. It meets your obligations. (The process is) the adoption of the ordinance is advertised. Once we get the proof that it was advertised back from the paper, it gets assembled into a packet with the certification, the whole packet gets shipped to Harisburg. They bless that package that you have complied with the Act, and then you can close the loan,” Heller told Council.
According to the terms of the contract, the Borough will be responsible for paying a $550 Documentation Fee to First National.
The truck was ordered in June from the Tri County Mack Truck Center near Spaces Corners on Route 66 North. It is classified as a 2018 Mack MRU612 Rear Loader Garbage Truck. Delivery is expected by February 2018.
The price of the truck escalated approximately $7,000 because Council did not order the truck in the time specified on the proposal from Tri County Mack.
The lease includes a $1 buy-out at the end.