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DERBY – The members of the city’s Board of Aldermen and Alderwomen voted Aug. 14 to send a $6.5 million bonding request to voters in November. Alderwoman Sarah Widomski voted against the motion, the only nay vote.
The money will be used for the following items, according to a list provided by the Derby City Hall finance department:
$3 million for two Derby Fire Department pumper trucks
$1.5 million for a rescue truck for the Storm Engine Co.
$560,000 for two Department of Public Works trucks
$550,000 to replace the public safety radio system
$400,000 to replace the HVAC system at Derby Public Library
$358,000 to replace a chiller at Derby Middle School
$132,000 as contingency
The items above are called capital expense items. It refers to items that are too expensive to fully fund out of an operating budget. The idea is to borrow and pay back over time.
The Derby Fire Department and Derby Storm Ambulance and Rescue have been asking for new vehicles for years. Its members say their aging fleet needs constant maintenance, with three trucks around 30 years old. Those three trucks will all be replaced, if voters say yes.
Mayor Joseph DiMartino, at a public meeting of the capital planning commission on July 28, said Derby has kicked the can down the road for too long regarding capital expenses – including the purchase of fire trucks. The mayor pointed out that the cost to buy fire trucks has skyrocketed while the city government did nothing.
“The past administration, for six years, kicked the can down the road. Didn’t have capital plan meetings,” DiMartino said. He also referenced the fact the city was under investigation for not providing new safety gear to firefighters.
“They wound up getting turnout gear because they had no choice because the state came in, or whoever came in,” DiMartino said, referencing CONN-OSHA.
The mayor said the city needs to give the emergency responders what they need.
Mayor Rich Dziekan’s administration was the prior administration. While he was in office, he said he had to deal with budget mistakes that happened under Mayor Anita Dugatto’s administration.
If the city tried to fund $6.5 million directly from its operating budget all at once, it would add around six to eight mills to the current mill rate, based on the fact one mill is about $750,000.
The city isn’t doing that. The impact on finances depends on when the city borrows, what existing debt is being paid off before borrowing, and where the grand list stands.
If the city borrowed $7 million today, and the current budget remained exactly as is, and the borrowing was stretched over 20 years, the borrowing would add about $500,000 to the annual budget.
“However, this is not what is going to happen,” Derby Finance Director Brian Hall wrote in an email to The Valley Indy.
Hall said the borrowing would be staggered to minimize or avoid or minimize a mill rate increase.
“The $6.5 million will likely be borrowed over a 4-year period (timing of fire and rescue truck delivery); the current debt load will roll off over time; and I expect the grand list to increase due to new housing and commercial development,” he said. “As such, I do not expect that there will be a need for any potential mill rate increase in the near term because of this bond offering.”
Earlier this year, members of the city’s capital planning commission were talking about floating $3 million or $4 million in borrowing, while the requests from the various city agencies totaled more than $36 million.
DiMartino eventually recommended a $5 million plan. At the July 28 capital planning meeting, member Jim Gildea advocated adding another fire truck to the list, since the prices are going up and the truck’s not getting any younger. His fellow members and the mayor supported the suggestion, which brought the total proposed borrowing to $6.5 million.
There had been a disagreement between the fire department and Storm Engine about what to buy, in terms of priorities.
Eventually the members of the capital planning committee recommending buying a new rescue truck for the Storms, and two new pumper trucks for the fire department. Those vehicles are replacing vehicles that are each around 30 years old.
Watch the video below to watch the full discussion that happened July 28.
The Storms are unique in that they are a nonprofit entity. The city buys their vehicles, and then signs them over to the Storms. The Storms fundraise and snag grants to supply the rescue truck.
Gildea pointed out that the fire commissioner said the price of a fire truck has almost doubled in five years. He said it makes more sense to borrow the money for three vehicles – one for Storm Rescue, and two for the fire department – instead of borrowing for one or two trucks, and then going back in five years to borrow for a third, when prices will increase even more.
“A 1.5 (million dollar) truck now may be 2.5 (million dollars) in five years,” Gildea said.
The capital needs referendum will be added to the ballot for Election Day, slated for Nov. 4.