When asked why the lease/purchase agreement for 14 Cat® M Series Motor Graders makes good economic sense for Madison County, Ark., Judge Wes Fowler is quick with his reply. "It's simple," said Fowler. "The deal must meet four requirements: price, quality, service and buyback. When I determined that Riggs Cat and Caterpillar met the criteria better than others, the rest was easy."

Fowler, a 22-year veteran of public office, is no stranger to fleet acquisition. He has learned to look carefully at the overall cost for the length of the lease, not simply the cost of acquisition. The lease/purchase of the motor graders is based on the basic principles of Life Cycle Costing (LCC)-acquisition cost, repurchase value and maintenance and repair costs.

A closer look at how the lease/purchase met the county's criteria provides insight into Fowler's analytical approach:

Price
Knowing the monthly cost of equipment lease/ownership is the top priority for the county when considering an equipment purchase. "Knowing the total cost up front, with no unplanned expenses, is very important to a county such as Madison. The cost per hour of owning and operating these machines was a top priority for the judge. We worked closely with Cat Financial to make sure we could satisfy those requirements," said Riggs sales representative Steve Smith.

Quality
Fowler has high praise for the M Series Motor Graders. "They're simply one of the best." He said an overwhelming majority of county operators would hate to go back to the traditional controls. Even senior operators praise the ease of operation of the new graders, and have learned to operate the joystick controls in relatively short order. The ergonomically friendly cockpit and the new controls result in less arm and body strain at the end of the workday.

Service
Predetermined operating costs are important when running any business-including the business of county government. A full-machine, extended warranty, through Caterpillar, covers all of the machines. Service-and uptime-are guaranteed during the lease agreement. The Riggs Cat service team will handle all factory recommended service as well as any additional needs-if and when they arise.

Buyback
A key component to Life Cycle Costing is the guaranteed buyback. It provides the county with the benefits of full ownership, yet also provides protection from future market fluctuations. Madison County, at the end of the lease, will have three choices concerning its fleet of graders:

1. Buy and keep
2. Buy and sell
3. Return to the dealership at the guaranteed price

When price, quality, service and buyback requirements were considered, the Caterpillar package provided the lowest owning and operating costs over the term of the agreement, plus an excellent financial upside upon conclusion.

Visit GovBidSpec.com to learn more about applying Life Cycle Costing to your equipment leasing and/or purchase needs.

The Facts
Madison County is located in the northwest quadrant of Arkansas, and has a population of 14,683.
The county employs 17 motor grader operators.
The fleet of 17 motor graders includes 14 Cat 140M Motor Graders.
The Madison County infrastructure crews maintain approximately 1,600 miles of unpaved roads and are responsible for the upkeep of 125 miles of paved roads.
Lanny McConnell is the county's road supervisor.