 Alderwoman Kathy Horn introduced the motion for a truck,
saying the city would purchase a $368,800 vehicle. The value of the
old truck on trade-in would be $3,000, bringing the purchase price
to $365,800. Of that amount, the city would pay $300,000 out of the
general obligation bond and finance $65,800. Horn said the $65,800
would be financed for three years at an interest rate of 2.75
percent. The motion was seconded by finance chair Melody Anderson.
The final figures for what the city would pay outright were higher
than originally stated. This came up last week at the committee of
the whole meeting. Marty Neitzel suggested the city use the $300,000
from the general obligation bond and reduce the amount they would
borrow.
However, on that evening Anderson was not present, and David
Wilmert expressed a concern for changing the amount without
Anderson’s blessing.
Among the first questions to come up when the floor was open to
discussion this week: Did Anderson approve of this change in the
dollar figure? She indicated that she did approve.
Neitzel also thought it would be good if the city treasurer,
Chuck Conzo, would explain for the media what the general obligation
bond is and how it is used.
Conzo said the city has a general obligation bond that it renews
every three years. The last bond was issued in December of 2010 and
will expire in December of 2013. The bond is borrowed money that has
to be repaid with interest, regardless of whether the city spends it
or not.
The expenditures of the bond are also limited to capital
expenses. Wages and expenses related to the daily operations of the
city cannot be paid with bond funds.
The collateral for the bond is a tax levy on city residents’
property tax bills, and payment back to the investors on the bond is
made from those tax collections.
Conzo was asked if the city has made any payments on the current
bond. He explained that in June of 2011 and 2012, payments were made
on the accrued interest only. In December of 2011 a payment was made
on the interest and principal. Payments will continue in this manner
until December of 2013, when the bond is fully paid back.
The city of Lincoln has used general obligation bonds for the
past several years, and more than likely a new bond will be issued
in 2013.
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Another point that came up during discussion was the fact that
new emissions and safety standards will go into effect Aug. 1. If
the truck is not purchased before that date, the city will be forced
to purchase a different truck that does comply with the new
standards. Horn said these compliances would come with several
thousand dollars in additional costs -- another reason to act as
quickly as possible.
Chief Mark Miller also noted that as an emergency purchase of a
stock vehicle, it will take approximately 40 days for the vehicle to
be purchased, firefighters to be properly trained on its operation
and then put it into service for the city. He noted that had the
city gone with a custom-designed vehicle as it has in the past, the
time to delivery could be 10 to 12 months.
Miller said with the weather being what it has been this year,
the need for a second firefighting apparatus is more important than
ever, as the department has seen an increase in grass fires and
other fires due to the dry conditions.
Finally, the company offering the vehicle for sale is willing to
pay the cost of flying Miller and one other person to Florida, where
the truck is, so that it can be inspected and approved for purchase.
When the discussion concluded and the motion came to a vote,
eight aldermen voted in favor of the purchase. Stacy Bacon and Buzz
Busby voted against it.
[By NILA SMITH]
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