BURRILLVILLE – Members of the Pascoag Fire District Board of Commissioners voted on Monday to dedicate some $16,000 annually to pay down debt and to refinance outstanding bonds, a move expected to save the district roughly $50,000 over the life of the loans.
It’s the latest step in an ongoing effort led by Chairman Chris Toti to tighten up business practices, and make operations in the district more efficient.
On Monday, Feb. 10, Toti presented the plan, noting that the PFD currently has a debt to asset ratio of 52 percent.
“It will have an impact on future borrowing costs,” said Toti of the debt. “It could adversely impact the district’s future ability to replace fire apparatus in a timely manner.”
PFD, he noted, has a budget of around $1.6 million, and debt totaling $768,000. Ongoing payments include the remaining $385,000 on a $700,000 bond taken out 12 years ago to purchase an aerial truck, and $383,000 for a $600,000 bond used to buy a tanker/engine eight years ago.
By paying $16,000 more annually for the truck, Toti calculated that the district would save around $30,000 in interest, and decrease the timeframe for payback from 8 to 5 years.
Another $16,000 annually on the tanker/engine, he said, would reduce the time on that bond from 12 to 8 years, and save $61,000.
“We would have to find that money in the budget,” Toti said of the potential $32,000 in new payments.
By refinancing, Toti said the district could decrease interest paid on both bonds from 4.135 to 3.25 percent, saving about $2,000 a year for 12 years, totaling just short of $24,000
Commissioner Kathy Polacek at first seemed skeptical of the plan.
“It would cost us more money up front that we don’t really have,” Polacek said.
Toti noted that the district’s recent move to a better money market account is expected to bring in $20,000 from investments.
“We’ve done some interesting things over the past couple of months,” said the chairman. “This is a decision that could impact the district for a number of years, but we do have to think about starting to replace vehicles.”
Polacek also pointed to the need for additional staffing.
“This is not going to affect what we do on the personnel side,” responded Toti, noting that the district is also expected to get addition funding through the upcoming tax sale, the first Pascoag has held since 2016.
Commissioners ultimately stopped just short of the full proposal.
In a unanimous vote, members agreed to refinancing, and to dedicate an additional $16,000 annually to the tower truck.
Toti noted that the district can revisit the idea of paying down the second bond after budget season.
“We can come back to the board and say, ‘we can swallow that $16,000,'” he said.