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Morning Lineup – October 8

2 comments

Every once in a while we carry a story about a community that needs a new fire engine (or ladder truck) but the city council refuses to buy one because they “don’t have the money right now.”  Those communities never have the money to buy a new fire engine, so they plug along with some 30-yr.-old relic that needs constant maintenance while the fire chief shops around for a well-used truck for sale that isn’t as decrepit as the one he has now.

And yet, a very high percentage of towns are not having that problem, even during budget-squeezing times like we’re seeing now.  I have mentioned before about some small cities that always have modern equipment that is fully-staffed and maintain a larger FD than some cities twice their size.  The cause for these discrepancies always come down to one main thing:  responsible, competent government leaders.  You know, the people that you vote for to run the town’s treasury.

In too many places the town’s bank account is just a temporary stopover for tax collections before they’re doled out to the politician’s favorite recipients without any long-range planning for the town at all.  You get the government you vote for.

Let’s take a look for a moment at the Town of Meredith, New Hampshire.  This tiny town of 6,000 residents that sits on the shores of Lake Winnepesaukee held their weekly Board of Selectmen meeting this past Monday night.  At this week’s meeting the Selectmen present voted unanimously to spend $760,897 from the town’s truck replacement expendable trust fund for a new ladder truck.

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That’s right, this little hamlet with barely enough people to fill a high school football stadium has the cash on hand sitting in a special fund for just that purpose.  They also do this with police cars, by the way.  The truck was originally planned to be purchased four years ago, but the fire station needed a major renovation first.  Yep, they did that too.

These replacement trust funds are standing and at every annual town meeting the citizens vote to appropriate dedicated monies to these accounts.  When the need arrives, the cash is there.  Meredith is getting a bonus for their prudence, too.  By being able to plunk down a 50% deposit on their new Pierce 100-ft. platform, they enjoyed a discount of $45,506 from the bid price.  Next year they will take delivery of a fine piece of apparatus with no debt load whatsoever.  You get the government you vote for.

It’s time to get our own equipment checked out now.  It’s got a few more years left in it yet.  I’ll go start the coffee.

Note:  From the Meredith Fire Department website:
The Meredith Fire Department protects approximately 6,000 residents living in an area of 53.7 square miles. During the peak tourist season the population can more than triple. They operate out of 2 stations that protect a primarily residential area, and house a fire boat at the Y-Landing Marina on Powers Road. The department is a public department, whose members are on a paid on call status, providing the Town of Meredith with fire suppression, search and rescue, extrication, and Haz-Mat services. The department “Teams” include over 40 department members, the auxiliary, and the explorer post.
 

Posted by on October 8, 2008 • Filed under: morning lineup
  • Dal90

    I’ve mentioned before the importance of good fiscal leadership. My town isn’t much bigger then Meredith with 8,000 residents, but without the tourist jump. We remain below state averages in income and property valuations, although both have moved substantially closer to “average” in the last ten years.

    Although we don’t have a trust fund — we bond fire apparatus. And “bond” is an important word, since bonds are less expensive then leases or other financing terms. The town will usually carry highway trucks, fire apparatus, etc on short term loans and then wrap up some school construction or maintenance project with them into a single bond since $1M is the traditional minimum for it to be cost effective.

    How many places have you seen where leases are pushed as a way to get around requirements for indebtness to go before the voters, or having ordinances/laws restricting municipal debt? Yet they use a more expense lease to count it as an expense and not a capital investment creating a debt obligation.

    Our ambulances, which are fire company and not town funded, have been leased since we initiated the service in 1990. That is because the state rate setting process favors current expenses over long term savings — they allow you a higher rate to cover a leased ambulance, but will cut the rate if you had revenue to far in excess of expenses, even if you were saving that money for future capital purchases. They have since offered a program to accept a default, statewide rate and not go through the individual rate setting process; we have continued to finance our ambulances in a way that would be advantageous should we decide in the future we need to increase our rates above the state default level.

  • Dal90

    I’ve mentioned before the importance of good fiscal leadership. My town isn’t much bigger then Meredith with 8,000 residents, but without the tourist jump. We remain below state averages in income and property valuations, although both have moved substantially closer to “average” in the last ten years.

    Although we don’t have a trust fund — we bond fire apparatus. And “bond” is an important word, since bonds are less expensive then leases or other financing terms. The town will usually carry highway trucks, fire apparatus, etc on short term loans and then wrap up some school construction or maintenance project with them into a single bond since $1M is the traditional minimum for it to be cost effective.

    How many places have you seen where leases are pushed as a way to get around requirements for indebtness to go before the voters, or having ordinances/laws restricting municipal debt? Yet they use a more expense lease to count it as an expense and not a capital investment creating a debt obligation.

    Our ambulances, which are fire company and not town funded, have been leased since we initiated the service in 1990. That is because the state rate setting process favors current expenses over long term savings — they allow you a higher rate to cover a leased ambulance, but will cut the rate if you had revenue to far in excess of expenses, even if you were saving that money for future capital purchases. They have since offered a program to accept a default, statewide rate and not go through the individual rate setting process; we have continued to finance our ambulances in a way that would be advantageous should we decide in the future we need to increase our rates above the state default level.