Interlakes residents are asked to decide between buying or leasing two new engine/pumper trucks for the Interlakes Volunteer Fire Department (VFD). The current trucks need to be replaced in 2019 and 2021 in order for the Interlakes VFD to meet the requirements to obtain insurance.
Without insurance, they wouldn’t be able to operate.
The cost of replacing the units is already factored into the VFD’s budget but they would like to purchase the units outright.
“We try to maintain capital reserves at all times in case of equipment breakdowns or new requirements that weren’t foreseen in our five-year financial plan, etc. So, to proceed with the lease financing that we typically do would curtail that. We’d have to use up all of our capital reserves. We wouldn’t be able to put any in there and our operating surpluses would be just barely enough to limp through. It wouldn’t really give us any breathing room,” says Scott Reid, Chief Financial Officer for the Cariboo Regional District.
The 10-year debt financing would reduce their payments over the next five years allowing them to put money aside into the capital reserves for whatever might be needed, he adds.
The question is put to residents in a referendum because local governments require public assent (such as through referendum) to enter into debt financing arrangements that exceed five years in term.
If residents vote against borrowing the money, the CRD would default back to their plan to lease the new equipment.
Voting will be on Aug. 18 from 8 a.m. to 8 p.m. at the Interlakes Library and the South Cariboo Recreation Centre. Voting is open to residents of the Interlakes Area Fire Protection Service Area and those who own property in the area. An open house took place Wednesday, July 25.
20 to 25: that’s how many years a truck can be in service. “They’re good for 20 years and then through a certification process, you can take them out another five years with annual certifications.”
$400,000: the aproximate cost of a new truck.
$209,900: the amount of money expected to be saved in capital gains at current interest rates. Changes in interest rates would affect the amount of money saved.
$120,000: the estimated extra costs resulting from interest if the referendum goes ahead once the debt is fully repaid by 2030.
$0: there are no increased taxes regardless of the outcome of the referendum