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MEMORANDUM <br /> <br />Item 4. I. <br /> <br />TO: <br /> <br />Mayor and City Council <br /> <br />FROM: <br /> <br />Lori Johnson, Finance Director <br /> <br />DATE: June 4, 2001 <br /> <br />SUBJECT: Authorization to Purchase Fire Pumper Apparatus <br /> <br />The Fire Department is requesting authorization to purchase a pumper from Pierce <br />Manufacturing, Inc. for the bid price of $249,975.00. There are several ways to finance this <br />purchase including financing options offered by the manufacturer and the issuance of <br />equipment certificates. There are several advantages to using equipment certificates to <br />finance this purchase. First, the interest rate is approximately two percent lower than the <br />manufacturer's rate. Second, even though current plans are to repay the equipment <br />certificate through transfers from the Capital Outlay Reserve fund, a tax could be levied to <br />fund the debt, if needed. Issuance of equipment certificates is consistent with the 2001 <br />budget including repayment of the certificates through the Capital Outlay Reserve fund. The <br />resolution authorizing the issuance of equipment certificates for this purchase will be <br />presented to the Council for consideration at a future meeting. <br /> <br />As I mentioned during the audit presentation, the 1989 Fire Equipment Bonds issued to <br />finance the aerial ladder truck were paid offin February and $46,128.31 remains in that fund <br />available for use as the Council sees fit. The Council may want to consider applying these <br />funds to the purchase of the pumper to reduce the amount financed through equipment <br />certificates. <br /> <br />Finally, the Pierce offers a discount for prepaying the chassis. This prepayment will be made <br />resulting in a savings of $3,793.00 <br /> <br />Action Requested <br />The City Council is asked to consider whether the 1989 Fire Equipment Bond Fund Balance <br />should be applied to this pumper purchase. <br /> <br /> <br />