While brainstorming ways to vanquish a $156,000 budget deficit, the Duxbury Select Board briefly considered cutting ties with the Waterbury Fire Department. After all, Waterbury voters had just authorized borrowing up to $950,000 for the replacement of two firetrucks, a cost that some on the Duxbury board worried would add to the cost of fire protection.
At the Duxbury Select Board meeting on December 16, however, select board members decided to maintain their contract in light of some good news from William Shepeluk, Waterbury municipal manager. Shepeluk explained how this $950,000 purchase would affect Duxbury’s side of the fire protection contract in which the Waterbury Fire Department provides fire protection services to Duxbury in exchange for semi-annual payments totaling $114,000.
First, the purchase isn’t likely to cost a full $950,000. “While the voters authorized borrowing up to $950,000 for the two trucks, it is not likely that we will have to borrow that much,” said Shepeluk in an email to the board prior to the meeting.
Second, the borrowing will happen slowly over time. Payments will be spread out over 20 years or more, as long as the firetrucks are in use. In this sense, the debt service will be manageable. “My expectation is that there will be almost no increase over your budget from last year. If it does increase, it’s not gonna go up significantly,” Shepeluk told board members.
Third, the firetruck purchases come from the town’s capital budget spending, which is not included as an operating expense. This is important because the fire protection contract between Waterbury and Duxbury is based on spending from the Waterbury Fire Department’s operating budget, not their capital budget.
However, these budgets are connected. The town funds its capital budget in part through annual payments from its operating budget. According to Shepeluk, this annual payment, while a significant part of the operating budget, does not fluctuate widely from one year to the next. Instead, the annual payment to the capital fund is consistent, adjusted by inflation and supplemented by a reallocation of saved spending, in order to help meet Waterbury’s capital needs.
“The fact that we’re going to spend over $900,000 on these two firetrucks will not affect this contract at all because the amount that we send from the capital fund is pretty consistent all the time,” Shepeluk told board members. “That’s why the capital expenses won’t directly impact our contract.”
Shepeluk explained that the annual payment from the capital fund happens in anticipation of big expenses, like the purchase of firetrucks. Still, it doesn’t cover everything. “We’re not putting enough money aside so that we can buy every single thing. But we’re putting enough aside that when we use that money, and some judicious following, we are able to make purchases, like these two firetrucks, without having a huge impact on our tax rate.”
Duxbury is getting a good deal, Shepeluk reminded the board, who pointed out that if one divides the contract costs by number of calls, Duxbury is paying less per call than Waterbury. “If you divide the $114,000 that you paid us in 2019 by the 30 calls in Duxbury it’s $3,800 a call. Our cost per call is $4,950.”
COST PER CALL
Still, Shepeluk wants to discourage the board from focusing on costs per call. “However you look at it, it costs money to have a fire department. And you shouldn’t do it on a per call basis. We all hope we don’t have any calls!” he said.
The board murmured in agreement at Shepeluk’s comments as he opened up the table for discussion. But it seemed there was nothing to discuss. Board members were happy to know that their fire budget would not be increasing with the addition of two new firetrucks. They agreed to keep the contract, although they made no formal motion to do so. “We appreciate your time,” they told Shepeluk as he gathered his papers, put on his jacket and set off into the brisk winter night.