A city council finance committee met recently to discuss ways to pay for a city fire truck — should the full council decide the $755,000 vehicle is necessary.
The news came Monday during a meeting of the Houston City Council, where members seemed torn on the path to take and whether a small sales tax might be necessary to provide a revenue stream for repayment. The next sales tax election day is April 2.
The city’s predicament is that one of two engines is out of service. The city has purchased a computer to diagnose the issues with one truck. It hasn’t arrived. It’s possible that the vehicle could be repaired and its pump pressure testing might meet standards. The next pump exam is set for late fall or early spring. City Councilman Donnie Wilson suggested waiting on the status of the truck and seeing if a new one is needed and develop a financing plan.
“If this would have been handled prior we wouldn’t have this issue,” said Jeremy St. John, a firefighter and city councilman.
Generally, it takes about eight months to manufacture a truck. By prepaying it, the city would save about $26,000. Additionally, it has identified a $30,000 USDA Rural Development grant it might qualify for. The fire truck estimate is expected to jump another 3-3.5 percent in February.
The last time the city bought a truck, voters approved an eighth-cent sales tax that paid back funds borrowed from the city. Other times, it has set money back during its annual budget deliberations. The finance committee recommended Monday dipping into its $3.3 million investment reserves — and pay itself back with interest — rather than borrow the funds from a bank and seeking a sales tax.
The city has $3.376 million in CD investments at different banks. These are also split between multiple funds (cemetery, general, water and electric). The electric fund currently has a balance of $1.7 million. If the General Fund was to borrow the $700,000 (after grants and reduction for cash upfront on the truck), it would leave about $1 million in the electric department CDs. The city operating funds are not in CDs.
It hasn’t been determined what the loan payment would be.
Others on the council wondered about the ability to repay the self-financed loan. Mayor Don Tottingham urged more study and looking at the 2019 budget on repayment ability. Additional financial figures are expected to be discussed Oct. 15.