By Steve Waldron and Jef Rietsma
The South Kalamazoo County Fire Authority will purchase a new tanker truck using an $849,474 loan it plans to pay off by 2026. It changed how it will pay for the truck following complaints from villages of Schoolcraft and Vicksburg about the purchasing process.
The first decision to replace a 1996 tanker, made at a June meeting, raised concerns from representatives of the two villages. The authority’s other members are townships of Wakeshma, Brady, Schoolcraft and Prairie Ronde.
At an early July meeting, Schoolcraft village council member Todd Carlin, that village’s representative to the authority, told his council about the planned purchase of the 3,000-gallon tanker from Pierce Manufacturing in late June. The council wanted additional clarification regarding funding for the purchase.
Carlin told his council the Wisconsin-based company had presented two purchase options to the authority on June 21: $0 down and 15 annual payments of $88,000 at 6.24% interest, or $180,000 down and 15 payments of $70,000. It would take 27-30 months to build and deliver the vehicle. The representative told the authority the current version would have to be ordered by June 30. An order after that date would be for a newer version at an added cost of $50,000. Authority members asked for a 30-day cancellation period. The Pierce representative rejected the request.
The authority’s Apparatus Committee on June 25 asked for a meeting on the next day, Monday, June 26. The four townships approved the purchase without the “cancel” clause. Vicksburg’s representative, village council member Carl Keller, voted against it. Carlin was absent.
Keller explained his position: “As I had stated to the (fire authority board) prior to (its June 19) vote, until we got a pro forma from the fire authority on how this truck was going to be financed or paid for, the village couldn’t fully support it until we had that. They understood,” Keller said.
“The motion was based on that they were going to enter into a no-money-down contract with the (truck) manufacturer with an opt-out by Aug. 31. By that time, the finance committee would have our numbers together that we could report to our entities and get a go or no-go.”
“I got a little heat from some of the members of the board but I explained to them this is democracy, I was representing the village and I knew that this is what the council had decided we wanted to see. So, that’s the reason for my vote. I did support a motion for the chair to enter into an agreement with Pierce.”
Carlin reported the events to his council. Members agreed a new tanker is needed but disagreed with the procedure: calling an impromptu meeting and signing a purchase agreement without a full review by those ultimately responsible for paying for the expenditure. Members said the authority should have described what other options had been explored for updating the tanker, perhaps with newer used models.
The Schoolcraft council also noted that recently approved authority articles of incorporation state that the authority cannot incur any financial liability on behalf of any of the incorporating municipalities without their prior consent. The Council asked Carlin to go back to the authority and share its concerns and questions regarding moving forward with this purchase.
In a special Village Council meeting July 14, authority members answered questions regarding the purchase, presented updated information regarding the decision process used to purchase the new tanker and described a new plan to fund the purchase.
Carlin said the authority now proposes to secure a 15-year $849,474 loan at 6.24%, requiring 15 annual principal and interest payments beginning June 29, 2024. But its plan is to accelerate payoff of the loan within three years instead of 15.
This will be accomplished by using $730,000 in committed and uncommitted budgeted authority funds along with the already approved and budgeted annual funding from the participating townships and villages during this period. It plans to make a total of four large payments between 2024 and 2026, paying off the loan in 2026. Accelerating the payoff of this loan in this way results in an estimated savings of $393,153 in interest on this loan.
The Village Council thanked the authority for the update and requested that it review how it shares financial data with the Village going forward, ensuring it’s formatted in a way that better aligns with standard accounting practices of reporting data.
By Steve Waldron and Jef Rietsma