Chelsea State Bank was chosen as the lender for the Washtenaw County Road Commission’s purchase of three new CAT motor graders.
The Road Commission put out a request for proposals to finance the $600,000 purchase over five years and sent it to four local banks.
Three of the four banks offered interest rates that ranged from 2-2.75 percent.
Chelsea State Bank offered a 2-percent interest rate and the three-member board approved a loan agreement resolution, 2-1, Tuesday afternoon, Feb. 5 during its regular board meeting.
Road Commissioner Fred Veigel voted against the resolution saying he did not believe in financing any purchases.
“When I get a bill, I pay it,” he said, adding he’d rather see the money spent on interest used “to fix potholes or something.”
Veigel previously suggested that the Road Commission use a portion of its reserve fund to pay for the motor grader purchase.
The Road Commission’s interest payments are about $6,000 per year for a total of $32,000 over the course of the loan.
“I’m certainly pleased to see a local bank take the lead on this,” said Road Commission Chairman Doug Fuller.
Road Commissioner Ken Schwartz said financing the purchase was “the right way to go,” based on inflation and the low cost of the loan. “In real dollars, it’s cheaper and we’re working with a local bank,” he said.
“We are proud to be the low bidder on the Washtenaw County Road Commission project,” said John Mann, president and CEO of Chelsea State Bank who added, “It’s what community banks do. We take deposits locally, and lend it locally.”
Mann credited Steve Saules, Mary Lee Penney, and Dave Schaible for the legwork for the bid.
The Road Commission expects to take delivery of the new motor graders next month and it’s expected that they will be in service for at least 12 years.