Council stands by decision to pay up front for trucks
Last month, Warren City Council elected to outright purchase two five-ton dump trucks from funding stemming from an unexpected $750,000 budget windfall.
On Monday, city staff asked council to reconsider.
Department of Public Works Director Mike Holtz said that while “staff respects the judgment of council” he is “concerned about the depletion of fund balance.”
Holtz said the city collected financing information to be able to bring for council consideration.
City Manager Nancy Freenock said that the increase in paving from the windfall put forth last month was done so on the assumption that the vehicles would be financed.
Councilman Sam Harvey, who led the effort to pay with cash last month, said that the original budget had the city purchasing the vehicles with cash. He suggested that the additional debt would result in the city “wind(ing) up in worse shape.”
Freenock acknowledged that the current plan of purchasing the vehicles outright is “not going to bankrupt the city.” However, she said that it would result in a fund balance, approximately 3 percent of the total budget, that is less than what is traditionally suggested, typically 10 percent.
Mayor Maurice Cashman suggested that if the city finances the vehicles at available low interest rates, council may be in a better position to not raise taxes next year. He also argued that the city’s added fund balance would permit “rainy day funds.”
“I think we should take advantage of these low interest rates and tackle 2015,” Cashman said, to hopefully avoid a tax increase.
Freenock also said that staff will be coming forward at a future meeting with two grant applications for Street Scape II, which would finish Market Street. She said a match for that funding would be required.
Councilman Gregory Fraser made a motion to switch to finance the vehicles, which was seconded by Cashman.
“How much money do we actually have,” Councilman Dr. Howard Ferguson asked.
“Let’s put it this way,” Cashman said. “If we have to do Street Scape, (the) match will take some of the cash.”
“How certain are we that we are doing to be doing Street Scape?” Ferguson responded.
City Planner David Hildebrand said that one of the grant applications will come through PennDOT, while the other is through the state Department of Community and Economic Development. He indicated it is not certain that the city will be awarded funds.
When put to a vote, Fraser’s motion failed 5-2 with Fraser and Cashman the sole supporting votes.