Mayor Daniel M. Knapik presented his budget to the City Council at its May 17 session, which included nearly $3.7 million in cuts from the requested departmental funding level, cuts needed to balance the 2013 fiscal year budget which goes into effect on July 1, 2012.
Knapik said that many of the capital purchases cut to balance the 2013 budget will be added as a priority to his supplemental funding appropriation request, which he will submit to the City Council next January after the state Department of Revenue certifies the level of the city’s free cash.
Free cash consists of unencumbered funds remaining in the current 2012 budget, which cannot be appropriated until the DOR certifies that the city has no outstanding obligations from the 2012 fiscal year and revenue from the previous year which was not received until after June 30, the last day of the fiscal year.
Knapik said that his first free cash funding priority will be the initial payment for a platform truck, funding that Fire Chief Mary Regan has included in her 2013 budget proposal.
Regan said Wednesday that she established a committee to assess the department’s capital equipment needs and to determine specifications for the platform truck, which will be purchased through a seven-year lease-to-own agreement. The total financial commitment for that lease to own purchase is about $1.4 million.
Knapik said that lease-to-own agreements, also being used to replace the Department of Public Works’ fleet of solid waste and recycling trucks, make sense for several reasons. One reason is that the current interest rates on the capital equipment replacements are equivalent to the interest for bonds, a financial vehicle used in the past to purchase that equipment.
“These agreements keep these costs off our bond schedule which is important because we’re in the process of selling a number of bonds and the last thing we want to do is add to that number,” he said.
Knapik said that he plans to use the same model for the Fire Department equipment replacement as he is currently using for the DPW where the initial year of a lease-to-own agreement is paid with free cash and then that funding is added to the departmental budget for the subsequent years of the agreement.
“So we’ll roll that $199,545 into the 2014 fiscal year budget,” Knapik said. “When that is paid off, we’ll roll that spending level into another lease for an engine. We’ll keep that funding level in that capital purchase line item and not let it fall back into the operational budget.”
Knapik said that he has worked with Regan to develop a capital equipment replacement plan to replace fire apparatus on a regular interval.
“In the past we weren’t replacing that equipment, so we’re in the process of clearing that backlog of equipment purchases through (an initial payment of) free cash,” Knapik said. “I gave the free cash priority to the (City) Council as part of my presentation so they know what to expect.”
Regan said the present platform truck is 24 years old and has become costly to keep in service.
“Over the past five to six years we’ve had major mechanical problems each year, costing from $10,000 to $25,000 to keep it in service,” Regan said. “The NFPA guidelines establish a 25 year life for this type of equipment.”
The specification committee has selected a truck that has the same dimensions and capabilities, but a center-mount platform boom that will provide greater deployment flexibility, Regan said.
“The new platform has about the same reach, but the mid mount would be more maneuverable to get in between buildings, easier to get it into tight spots,” she said.
Regan said the price for the vehicle may differ in January. “The price we have now is based on (proposed funding included) this budget, so going forward there may have to be a slight adjustment.”
