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Utility funds could help out fire department

December 15, 2013
By MARY ANN GREIER - Staff Writer (mgreier@salemnews.net) , Salem News

SALEM - City Utilities Commission Chairman Bob Hodgson went on record this week in support of lending utility funds to cover half the cost of a new ladder truck for the fire department.

No vote was taken to grant approval of the loan, but Hodgson said "I think we're very interested in participating." He said the commission just has some questions for the city law director regarding the transaction. They were awaiting his response.

"We're very eager to help where legally we can," he said, adding it's something the city can use for the safety of the citizens.

City Auditor Betty Brothers had already approached the commission about the possibility in a letter on Nov. 25, explaining that Ohio Revised Code authorizes the city to purchase its own debt using a treasury investment note.

"The debt is legal, valid and binding as it would be if the city sold its note to a bank or underwriter. The difference is that it is the city that both issues the note and buys the note. The purchase of the note is viewed as an investment by the city of its own funds (in this case utility funds) in one of its debt obligations," the letter said.

Brothers talked about the proposal in person at the recent commission meeting, saying they would ask to borrow $470,000 from utilities for the truck, with another $470,000 already set aside in the budget under capital improvements for the fire department.

She said previously that interest would be paid and there would be a payment schedule.

"It would be just like we're doing a payment with the bank," she said.

Commission member Tim Weingart asked how long of a period the repayment would be, with Brothers saying the payment period would be 15 to 20 years.

"We're being told 10 years is the norm for this," Hodgson said.

Fire Chief Jeff Hughes had come to the Finance Committee last year about the need for a new ladder truck and applied for a grant but didn't get it. Brothers said they've been putting thousands of dollars into the 23-year-old truck for repairs. The cost of a demo truck with a longer ladder and a platform was $940,000. They were told the current truck's trade-in value was only $17,000, so the plan would be to try to sell it outright to another department or advertise it online.

Brothers told Hodgson she could provide him with contact information for the city's bond counsel, which will be needed to put together the paperwork for the debt investment.

In other business, the commission agreed to submit three possible projects for a list being sought by the Ohio Mid-Eastern Government Association which distributes grants for infrastructure improvements for communities and for economic development. OMEGA was looking for projects that may be fundable through future grants.

Projects submitted for the list included the Benton Road sanitary sewer project to bring sewer from Pennsylvania Avenue under the Norfolk Southern railroad and continuing to the south side of state Route 14. The cost was estimated at $204,842 and had been submitted for an Appalachian Regional Commission grant previously which the city did not get.

Other projects included sanitary sewer on Snyder Road near Fresh Mark and extending along the south side of the railroad on Newgarden Avenue, with a cost estimate of $1.29 million in 2005, and construction of a second water supply main from the Salem water treatment plant estimated at $4.3 million in 2008.

Utilities Superintendent Don Weingart said OMEGA isn't in a position to issue the grants right now, but wanted a list of possible projects.

"It's just like asking Dad for money. You're only going to get so much," he said.

The next meeting of the Utilities Commission is 3 p.m. Jan. 14.

 
 

 

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