July 18, 2012Selectmen approved the warrant article schedule for the special town meeting during a work session Monday, July 16, officially starting the countdown to the town-wide vote on a lease for a new fire engine to replace Fire Engine Four.
The article would authorize Selectmen to enter into a long term lease purchase agreement for about $442,000, or about $51,000 in annual payments over ten years.
If approved, the first payment would be due in 2013, and the truck would be deviled around May or June.
Selectmen discussed making payments for the fire engine using the undesignated fund balance, which is usually used to offset the tax rate. Selectmen said they favored this route because they would be borrowing money from themselves, with essentially no interest.
Town Administrator Scott Dunn said the selectmen did not have to add anything to the article to use undesignated funds to pay for the fire engine because they decide how to budget funds in the annual proposed budget. He explained that, unless they wanted to specifically require that payments be taken from the undesignated fund balance or any specific area, they could make amendments at the Deliberative Session.
According to Dunn, the entire purchase could be paid with undesignated funds, and he would "do that in a heartbeat" because it would be much easier than negotiating a lease agreement or bond.
Dunn added that Financial Director Geoff Ruggles was against using undesignated funds because it would affect cash flow and leave the selectmen unable to use the funds to offset the tax rate.
Selectman Kevin Hayes suggested that they request Ruggles make a schedule for 2013 with estimated payments for the new fire engine.
Selectman John O'Brien mentioned that many towns do not have an undesignated fund balance. They said they were unsure if they would pay off the entire purchase in one payment or make the proposed yearly payments until they heard back from Ruggles.
According to O'Brien, they would most likely pay more than the minimum yearly payments.
O'Brien also said he still favored purchasing a demonstration or used piece of equipment, instead of a new fire engine.
Hayes said that Budget Committee member Kevin Leandro found two used fire engines which Hayes suggested Fire Chief Steve Carrier consider.
Selectmen said they would need a recommendation from the Board of Fire Engineers to consider the purchase of any equipment.
According to the selectmen, they paid the final annual payment for breathing apparatus in the 2012 budget so that would help offset payments for a new fire engine in the 2013 budget.
Selectmen held a public hearing to discuss the lease financing of a new fire engine during their last meeting, but had no comments.
On Monday July 9, Presiding Justice Kenneth McHugh granted the town's petition for a special town meeting after a hearing Friday, July 6, finding a need and the urgency to vote on whether or not they should purchase a new fire engine.
"The annual town meeting is over six months away, and if the voters approve the purchase of a new fire engine it will take nearly one year to have it constructed and put in service. Therefore time is of the essence," stated McHugh. "It is unreasonable and unfair to depend on neighboring fire departments to shoulder the burden through the use of their vehicles for what is and should be the responsibility of the Town of Gilford."
The Special Town Meeting Deliberative Session is scheduled Tuesday, Aug. 7 at 7 p.m. in the Gilford High School Auditorium. The vote will take place on Sept. 11 to coincide with the New Hampshire Primary.