by Robert Lynch; March 6, 2024
An already-tight Enfield Fire District budget got a whole lot tighter Tuesday, as Chairman Greg Stevenson advised the Enfield Board of Fire Commissioners of some self-described “bad news.” He said the $830,000 in bonding that voters approved last Halloween to finance the cost of a new pumper engine will not be enough in cover the interest payments that have accrued between when the truck was bought last year and when its bonding will likely kick-in next month.
“It was clearly an error,” Stevenson told the Board. “We will have to figure out where the rest will come from.”
Whoever stands to blame—whether it was the Fire District’s former counsel, Brad Pinsky; or the group of former Commissioners appointed by the Town Board last August, but now largely replaced—Stevenson would not say. After the meeting, the chairman made clear he’s not blaming anyone. It’s more important, he said, to fix the problem.
“Take our budget out and try to find out where you can find $37,000,” Stevenson instructed the Commission’s four other members. Commissioners will reconvene March 19th and try to find places to cut.
Last year, the Enfield Volunteer Fire Company (EVFC), the non-profit corporation formerly overseen by the Town Board—but now by the Board of Fire Commissioners—purchased a new $825,000 pumper engine to replace a 20-year old unit, subsequently sold. In the course of transferring governance to the newly-formed Enfield Fire District, former Fire District lawyer Brad Pinsky wrote, and voters subsequently approved in a close, October referendum, the pumper truck’s bonding.
The Bonding Resolution adopted for the pumper authorized financing of up to $830,000. It provided only a $5,000 cushion.
But the EVFC had already secured a bank loan for the truck, a loan that would be retired only when the bonds are purchased, but not before. The interest clock continues to run on the bank loan. And Stevenson reported Tuesday that $41,961.79 in interest is expected to accrue by the time bonds would likely be purchased April first. With principal and interest, the new truck now costs $866,961.
“There’s a $36,961.79 shortage due to failure to put the right amount in the Bond Resolution,” Stevenson stated.
State law will not permit a bond to be purchased for more than what voters authorized. There was no talk at Tuesday’s meeting of asking Enfield voters to amend the bonding authorization through a subsequent referendum.
Nonetheless, much of what last year’s Town-appointed interim Board originally proposed has since been undone by the current, elected Board that took over in January. Only two of the Board’s current five members are hold-overs.
Whereas, the appointed Board had requested and received voter authorization to bond the pumper for 20 years, the new Board in late January signaled it would approve bonding for no longer than 7-10 years. Moreover, the new Commissioners declined to bond a second EVFC fire truck that’s already well-through its ongoing bank loan.
Both changes in position came at the advice of the Fire District’s new lawyer, Mark Butler, Pinsky’s successor. Butler advised Commissioners they could rescind the previous Board’s initial borrowing plans, including bonding the lower-priced 2020 tanker truck at the voter-authorized $220,000.
Pinsky had written the pumper’s and the tanker’s bonding authorizations as separate voter propositions. Each was approved separately, though during the same referendum. Because of that separation, however, Stevenson informed the Board, the Fire District could not draw on the unexpended tanker bonding to shore-up the shortfall now encountered on the pumper.
“Had they been in the same resolution, it could be (combined),” Stevenson lamented.
The total 2024 Enfield Fire District Budget, as authorized by the former Board of Commissioners, totals $483,000. There’s little room to cut. The current Board has already planned to draw upon the budget to make one of three remaining annual bank loan payments on the tanker. Stevenson concluded that vehicle maintenance is one budget line that cannotr be reduced.
Ironically, one area that may be cut is for legal services. Mark Butler has estimated his fees will be less than what former counsel Pinsky had expected to charge. Members talked Tuesday of subtracting $15,000 from the legal line.
Fire Commissioners had been expected at Tuesday’s meeting to finalize bonding plans for the pumper truck. But on attorney Butler’s recommendation, the Board delayed announcing bonding details or making decisions. Interest rates are falling, Stevenson told his colleagues. A 4.6 per cent interest rate that the likely bonding bank had quoted Butler in February may drop later this month, he said. Therefore, the attorney had urged delay.
“He anticipates it will be lower than 4.6,” Stevenson quoted the attorney’s assumption as to the future interest rate.
When it addresses closing the interest-related funding gap on March 19th, Fire Commissioners will likely also authorize fire truck bonding and plan for an April first bond transaction.
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