Guelph-Eramosa will lease new road grader to lower expense

BRUCEDALE – Guelph-Eramosa township is leasing a new grader to maintain its gravel roads, at a cost of $5,509 per month.

Council made the decision March 18, rejecting the options of buying out the lease on its current five-year-old grader for $117,900 or buying a brand new grader for $468,000 plus borrowing costs.

Director of public works Harry Niemi recommended the new five-year lease option, noting  there is a high risk of drastically-increased maintenance costs on graders over five years old.

Leasing the 2019 John Deere 772 GP grader will cost $66,108 per year, totaling $330,540 over five years, in a contract with Nortrax Canada.

While the current grader has a purchase option of $117,900, its actual residual value has been evaluated at $164,000, so the township is expected to receive $46,100, to be used to increase equipment reserves.