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Salt Lake City fire chief seeks council authorization for five-year lease purchase of pumper engine
Summary
At a July 23 work meeting, Fire Chief Addison asked the Salt Lake City Council to authorize a tax-exempt lease purchase with PNC Bank to replace a frontline pumper engine; chief gave cost, timing and lifecycle details and said a council resolution is required by the lender before the lease can proceed.
At a July 23 Salt Lake City Council work meeting, Fire Chief Addison described a planned tax-exempt lease purchase with PNC Bank to replace one frontline pumper engine and asked the council to approve a resolution the lender requires to proceed.
Chief Addison told the council the city budget already authorized the department to enter a lease and that the vehicle will take about 3 to 3½ years to build. “By time we get this started and built, the engine will actually be 1 to 2 years overdue on the frontline service life,” Addison said. He said after frontline service the engine would move into reserve for about eight years, giving a total service life “about 16 years or more.”
Addison said the lease is structured as a tax-exempt lease purchase, similar to an arrangement used for a ladder truck. He said the financing would capture a $115,000 discount on the purchase price and is being offered by PNC Bank with an interest rate currently “about a 4.35%” figure. The city would make five annual payments; Addison stated the payment amount as $238,261 per year and that the lease “actually starts the second year after” the city signs so payments begin in the next budget year. He also described contract protections in the lease package, saying the arrangement includes performance-bond protection and a four-party agreement that would require the lender to return funds if the vehicle is not completed as agreed.
Council Chair Sharla Bynum invited questions and, after none were raised beyond a single cost clarification, thanked the chief. No formal council vote or resolution was taken at the work meeting; Mayor Erin Mendenhall and council members present indicated the matter will be on the regular meeting agenda for formal action.
Next steps: Chief Addison and staff will bring the required resolution to the council at the regular meeting for formal authorization and signature so the city can finalize the lease with PNC Bank.
