The Superior Fire Department plans to replace an aging ladder truck by leasing its next one.
The 10-year lease will cost the city an estimated $124,391 per year, said Finance Director Ashley Puetz, or about $1.24 million total.
The city’s annual budget for fire rigs is $120,000. The budgeted dollars combined with a contribution from Enbridge of $7,500 annually for the next 16 years, make leasing the rig a good option for the city, Puetz said.
The Finance Committee approved the plan April 16, which will ultimately allow the city to purchase the new rig without dipping into reserves or bonding for a new one. A new fire truck costs around $1.1 million. However, if the city were to borrow the money for a new rig, there would be additional costs for legal/financial advisers.
If the City Council approves the plan at its May 5 meeting, officials would put out a request for proposals for the lease.
Fire Chief Scott Gordon said Enbridge went “above and beyond” with its $120,000 contribution to make sure Superior’s fire trucks are in compliance with National Fire Protection Association standards.
At the end of the lease term, the city will be able to purchase the truck for $1, Gordon said. The cost of the lease includes the price of the rig and interest charges, Gordon said.
Committee members agreed leasing is the best option for the city at this point in time.
“The reason I wanted to look at this option — this would be an unusual situation where we’re leasing — but leasing is excellent right now,” Councilor Jack Sweeney said. “I knew that it was good. I didn’t know that it was that good.”
Councilor Brent Fennessey said he’s normally not a fan of leases but with the favorable terms presented to the committee, it’s something the city should consider when making other major purchases.
“I like this idea a lot … it provides us with the bridge right now to get us back on track,” Fennessey said.
While working on Superior’s Insurance Services Organization report last summer, Gordon discovered the rig would go out of compliance with NFPA municipal fire truck standards by the end of this year because of its age.
Engine No. 2 will exceed 15 years in service effective Jan. 1.
The out-of-compliance fire rig could put Superior’s ISO rating in jeopardy. The rating helps determine insurance rates for business and residential properties in the city. On the 1 to 10 scale, lower numbers are better, and Superior had a 5 and 9 split ISO rating until 2015 when the rating dropped overall to 3.
But that’s not the only problem having a 15-year-old fire rig can cause.
“In the last six months, Engine 2 had two major breakdowns,” Gordon said. “It’s literally not getting to the call it’s going on.”
Gordon said once the new rig is here, which is likely to take several months, Engine No. 2 will be refurbished and put into reserve status to serve as a backup for the next 10 years.
Puetz said in subsequent years, the city should add about $230,000 annually to its budget for fire rigs to make sure they're prepared next time a new rig is needed.