Salinas approves lease financing to buy four fire apparatus, staff says lead times are five years
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Summary
The Salinas City Council approved a tax‑exempt equipment lease and a mix of cash from land‑sale proceeds to fund two Type 1 engines, a tractor‑drawn aerial and a Type 6 brush rig; staff said current lead times for apparatus are about five years and the city expects annual debt service of roughly $530,000.
Salinas — The City Council voted to approve financing to buy four pieces of fire apparatus on Feb. 3, arranging a mix of cash from land‑sale proceeds and a tax‑exempt equipment lease with Bank of America Public Capital Corp.
Finance Director Selena Andrews described the package as a combination of cash (from recent land sales) and lease financing under the city's Master Equipment Lease Purchase Agreement (MELPA). Andrews told the council the amount to be borrowed is roughly $3.26 million and the lease structure yields a locked fixed annual debt service payment of about $530,000, with the first payment due Dec. 1, 2026. Staff said prepaying part of the purchase will secure a discount of about 13.2% in the financing structure.
Deputy Fire Chief Shane Bennerveen told councilmembers that manufacturing lead times for fire apparatus have lengthened dramatically: “Currently, the lead time on fire apparatus is 5 years,” he said, adding that orders placed this year likely will not be delivered until 2030.
Councilmembers asked whether leasing offered advantages to get apparatus in the build pipeline sooner; staff said the city can prepay manufacturers under the lease structure so trucks can be ordered and built without having to fully expend one year’s capital budget. The council discussed tradeoffs between dipping into reserves and spreading payment over a multi‑year term to preserve budget flexibility.
Following a period of questions and public comment (one resident questioned interest costs), the council conducted a roll‑call vote on the lease purchase. The motion carried unanimously.
What’s next: Staff expects to close the escrow and start the procurement/ordering process in mid‑February; due to current manufacturer lead times, the new apparatus are not anticipated to enter local service for several years.