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Lindenhurst to lease its heavy equipment to save on costs

A Village of Lindenhurst Department of Public Works

A Village of Lindenhurst Department of Public Works truck plows slushy snow on Broadway in Lindenhurst on Feb. 2, 2015. Credit: Newsday / Steve Pfost

The Village of Lindenhurst will begin leasing heavy equipment vehicles, instead of buying them outright, as a cost-saving measure, officials said.

The move is intended to help the village obtain more equipment without impacting the annual budget, said Mayor Mike Lavorata. The village devotes about $100,000 to its budget line for Department of Public Works equipment replacement each year, he said. The heavy equipment trucks have an average life span of 7 to 10 years before they typically start to require expensive repairs, Lavorata said. By leasing, he said, the village can replace equipment more regularly and avoid costly repairs.

The village recently entered into two lease-purchase agreements with Government Capital Corporation, a Southlake, Texas-based public financing firm. The village will lease a 2014 and 2016 payloader/road grader for five years, with total annual payments of $39,256. The second five-year lease is for two 2018 dump trucks and a 2018 garbage truck, with annual payments of $109,391. By contrast, said Lindenhurst Superintendent of Public Works Rick Sorrentino, buying a new dump truck would cost about $150,000.

The interest rate on the leases is 3.5 percent, Sorrentino said. With both lease agreements, after five years the village has the option to buy the equipment for $1 each.

Lindenhurst appears to be unique on Long Island in choosing leasing for heavy equipment. Many towns said they use capital funds to purchase their equipment. Officials in municipalities similar in size to Lindenhurst said they do short-term leasing on snow or other equipment needed in emergencies. Several municipalities use leasing only on vehicles less heavily-used, such as those for code enforcement.

Sorrentino said the village’s fleet has several vehicles that are 18 to 20 years old and that one manufacturer is out of business, making it difficult to acquire parts. He said the village will see savings from repairs since the leased vehicles come with “almost bumper to bumper” warranties.

“The value of the vehicles, especially with the warranty, will be a lot higher than running it down into the ground,” as the village has previously done, Sorrentino said.

“I have a garbage truck that needs a hopper fixed, so you’re talking about $5,000 for that because we’ve run it down and had no money to replace it,” he said. “Now with this new system with leasing, we can start replacing things sooner and make them last longer.”

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