Custer County approves lease-to-purchase for grader after debate over cash versus financing

Custer County commissioners voted April 29 to acquire a used grader through a lease-to-purchase option after weeks of workshops and debate over financing.

The board moved to buy a grader available from another county and to structure the purchase as a lease-to-purchase with roughly $50,000 annual payments under the proposed financing terms. Bill Kanda, chairman of the board, said the county will front the purchase and later reimburse the capital-improvement fund with proceeds from planned asset sales: "I move that we pay it outright, the $215,000, and then knowing that we will reimburse the capital improvement fund with the sale of the where you're gonna sell," Kanda said during the meeting.

Why it matters: commissioners said older equipment costs more to maintain and that a newer machine would reduce maintenance demands and free funds for materials such as asphalt. Road boss Richie described the tradeoffs: "The reason the pinches this newer grader is anybody's been around equipment knows after a certain amount of years, they get age on them, and it's it gets costlier more and more to keep them populated on a yearly and monthly basis," he said, arguing a more reliable grader would reduce recurring repair costs.

The board considered several payment approaches. Staff presented an option from UBB Bank at 4.75 percent that would produce payments of roughly $50,000 a year on a five-year schedule; staff described that as a lease-to-purchase pathway. A finance-option description at the meeting said the county could pay cash now and borrow short-term to cover immediate outlays, then repay funds when asset sales and refinancing are completed. As staff framed it: "I've got, leased to purchase from UBB Bank at 4.75% which gives us roughly a payment of just under 50,000 a year," the staff member said.

Board members expressed concern about draining the capital fund and urged conservative cash retention for contingencies. Several commissioners said selling older graders and other equipment would replenish funds.

The decision and next steps: the motion to approve the lease-to-purchase and related payment plan was made, seconded and approved by the board. The county will finalize financing paperwork and move forward with the acquisition, while staff pursues sale of surplus equipment and continues work on refinancing an existing balloon payment that factors into the county’s longer-term equipment-financing strategy.

The purchase discussion came with deadlines: staff noted an equipment offer required action by May 7. Road staff said the used grader is a 2021 John Deere with about 2,700 hours and that it had been maintained and inspected by county mechanics.

What’s next: staff will complete financing paperwork, pursue asset sales to reimburse capital funds, and return to commissioners if signatures or additional approvals are needed. The board indicated flexibility to pay cash or use the proposed lease-purchase depending on the final refinance terms and proceeds from the planned sales.