At last week’s commission meeting, city manager Bill McDaniel proposed that the city forgive the loan.
At last Monday’s commission meeting, one key resolution involved an interfund loan between the Solid Waste Department and the Fire Impact Fee Fund.
The loan was provided for the construction of Plant City Fire Department’s Fire Station #3 with the funding for the station acquired as an interfund loan from the city’s Solid Waste Department’s reserve funds, as fees collected for their services allowed the department to operate with excess funds. In retribution, the loan would be paid back from the Plant City Fire Department’s Fire Impact Fee Fund.
The loan was originally deducted from the Solid Waste Department’s reserves in 2016 when construction of the fire station began and the loan was approved. Construction broke ground in 2018, the brand new fire station ultimately opened its doors and began operations last October and substantial completion of the project concluded over the past few months.
With the loan already off of the Solid Waste Department’s books for years now, alongside their ability to remain financially stable, city manager Bill McDaniel proposed that the loan be forgiven in order to avoid a 15-year burden to the Fire Impact Fee Fund.
“The loan was already taken off of their books or deducted from their reserve back at the time it was made,” McDaniel said. “So when I prosented the financials [last Monday], they’re already without that showing because it was taken out several years ago when the loan was made. It was now a matter where now that the station was complete, basically the mortgage was set to start. Then, when the CFO advised me that it would be 15 years of those payments out of the Fire Impact Fees, that was the concern and that’s why I presented the option to the commission.”
The Solid Waste Department’s reserve funding started at a baseline budget of $14.7 million. After $1.8 million is taken out for the purchase of new automated collection vehicles for the next fiscal year, $3 million held aside for a disaster recovery policy and a number of other financial responsibilities, the remaining balance sits at just over $6 million.
Had the Fire Impact Fee been responsible for paying back the loan over a 15-year period, McDaniel feared that Plant City may already need a new fire station constructed before the loan was fully paid off.
“I don’t have a schedule yet but I don’t think [that the construction of a new fire station] is too far out from a city perspective,” McDaniel said. “I think that in the next few years you’ll have to start seriously planning for it. It’s not just the amount of population growth, but where the population is. A lot goes into the identifying the need for another fire station. We have what’s called an ISO (Insurance Services Office) Rating which affects everyone’s homeowners insurance rates. That’s dependent on response times and distances so as your population spreads out and you get these longer response distances or times, you then have to compensate for that. So it’s not just raw population, it’s also a function of where the population is.”
Vice-Mayor Michael Sparkman showed hesitation with the motion due to the fact that funds from the Solid Waste Department are accrued from fees paid by citizens, however Commissioner Nathan Kilton argued that given the quality and relatively low prices of the services provided by the department and the excess funds that they were able to accrue with those factors considered, it was fair to utilize those funds to aid another governmental department that was in need.
The motion ultimately passed by a vote of 4-1.