Farmington may tap into Water Board fund for fire truck purchase
City levy would rise to repay five-year loan
by Laura Adelmann
Farmington intends to tap into an estimated $550,000 to $600,000 from its Water Board to buy a new fire truck.
Internal borrowing saves money and keeps repayments within city coffers while allowing the city to receive a cash discount for a more versatile fire truck that Fire Chief Tim Pietsch said can carry rescue and firefighting equipment.
“If we get a car crash, we can take that one truck on the crash, and can extricate (crash victims) and have water on hand in case anything starts on fire,” Pietsch said.
The new truck that Pietsch hopes will arrive by year-end, replaces a 1984 truck plagued with frequent breakdowns, several that have caused problems during fire events.
None of the problems resulted in a death or injury.
With a truck purchased through the Houston-Galveston Consortium, kind of a discount club for municipalities, the city saves time, cuts red tape and gets a bargain price on a new truck equipped for Farmington’s needs.
Joining the consortium costs $1,000 for a five-year membership, but saves the city from legal expenses for reviewing bid specifications and responses between 30-day waiting periods, Pietsch said.
Other city purchases can be made through the consortium.
Internal financing saves the city about $40,000 in fees for bonding with outside financiers, City Administrator David McKnight said.
Council members indicated support for a five-year loan at 2 percent interest at a March 12 workshop, instead of the 3 percent rate recommended by Finance Director Teresa Walters or the 1.6 percent rate suggested by Council Member Jason Bartholomay, who said he wanted to save taxpayers money.
Under the 2 percent financing proposal, if the truck cost between $550,000 to $600,000, it would add between $116,687 to $127,295 to the levy annually to repay the entire loan within five years, according to Walters.
As a result, taxes would rise between $17.60 and $19.20 per year on the average value home of $200,000, Walters said.
The Water Board has approved of the loan, using a portion of funds it has saved for a water treatment plant, because it would earn more interest from the city than it has on recent investments.
“It’s a win-win on both sides,” said McKnight.
The loan must be formalized through a City Council resolution and an approved agreement with the Water Board.
Laura Adelmann is at firstname.lastname@example.org.