City of Powell River Council has approved the purchase of two new photocopiers at a combined cost of $17,630.76.
At its Thursday, July 2, meeting, council was advised that purchasing was actually less expensive than leasing.
Councillor Russell Brewer said that traditionally, the city has leased photocopiers, but has the option of borrowing through the Municipal Finance Authority (MFA) for purchasing the equipment. The interest rates for purchase through MFA are much lower than the interest rates for leasing.
“It’s one and a half per cent versus about six per cent under the lease, which just makes good financial sense,” Brewer said.
Council unanimously passed motions for a 35-page-per-minute copier, at a cost of $8,470, inclusive of taxes, and a 45-page-per-minute copier, at a cost of $9,160.76, inclusive of taxes. Borrowing will be for a period not exceeding five years. The loans can be paid off early without penalty.
According to a report from Shehzad Somji, the city’s chief financial officer, savings under MFA financing over leasing amount to $1.031.21, and an interest rate differential of 4.71 per cent.
Somji stated that the city requires the use of larger electronic office equipment such as photocopiers, scanners and postage machine equipment for operational purposes. Historically, the city has procured these items through operational leases offered by the vendor, and the monthly lease payment is included as an operational expense in the city’s five-year financial plan.
One of the advantages of purchasing the equipment rather than leasing it is the equipment is a city asset. The city will have the ability to retain the equipment beyond the expiration of the loan if it chooses.
