By SUE SUCHYTA
Sunday Times Newspapers
TRENTON – Now is a good time to replace the city’s 19-year-old fire truck Engine 112, which is experiencing increasing repair costs, Fire Chief Dean Creech told city officials July 23.
Creech said the engine is nearing the end of its life cycle, and has averaged about $15,000 annually in repairs the last five years. With interest rates and steel prices anticipated to rise, it would cost less to finance a fire truck now than a year from now.
Over the 20-year expected lifespan of a fire truck, which cost $500,000, depreciation or amortization is $25,000 per year. For the last five years, repair costs on Engine 112 have exceeded $15,000 annually, which is more than half the annualized depreciation, Creech said.
The engine has a current market value of about $50,000 he said.
“It is due for replacement at the 20-year mark for sure,” Creech said. “A few things have happened since May. There is a group of three or four fire chiefs that are all looking for fire trucks at the same time, which would provide us with a savings of probably $10,000 to $15,000 off the apparatus cost.”
Creech said Lincoln Park has had a drive train failure on an engine, Southgate is currently leasing a rig, and the Wyandotte city council is considering purchasing a new engine.
He also said the purchase would likely have to be financed, and with the prime interest rate anticipated to go up two points this year, and more next year, the city would save about $50,000 in financing a $500,000 rig over five years if it finances it now instead of a year from now.
“This is nothing new, it is not a big surprise,” Creech said. “It is a cost of doing business.”
Creech told city officials that buying a new rig would not be any less expensive in the future.
“I think you really have to think about the net cost,” he said. “We are going to have to pay either way. If you are taking $25,000 a year that you should depreciate or expense on your rig and you are spending more than 50 percent of that on repairs, that is generally when you are going to start looking at replacing the asset.”
He said it was really rare to have three other fire chiefs – in Lincoln Park, Southgate and Wyandotte – that are going to work with one another to realize savings by ordering together.
Creech said it would take a year to get the rig built, so the city wouldn’t have any payments until the next budget year.
“You need to be aware, as the governing body, that there is going to be a cost increase that is out of the norm,” he said.
Creech said a new truck would be more reliable, and there are safety protections in its design that were not required when Engine 112 was purchased 19 years ago.
“We just want a reliable rig that rolls, pumps and does the job, and we are going to get as many years out of it as we can,” Creech said.
He said if Trenton relied on nearby cities for mutual aid support, it would hurt the city’s rating with the Insurance Service Office, which supplies statistical information on a city’s risk factors with an ISO score, which in turn, impacts insurance costs.
Creech said that in the past, the fire department transitioned from a period where if it wanted a new truck, the city just paid for it, to a period of economic rough times. He said Trenton has not experienced a recent economic upswing that would allow it to set aside money for capital expenditure.
“Ambulances cost $200,000, fire trucks cost $500,000,” he said. “They aren’t going to get any cheaper, and getting 20 years out of a fire truck is tremendous. We have to look at the big picture and see where the numbers are.”
Councilman William LeFevre said it has always been his motto that with the fire department, to make the needs of the firefighters and EMTs a priority. He said the city needs a new ambulance before it buys a new fire rig.
Creech said he understood the priority of an ambulance, and said 10 days earlier the city had two ambulances out of commission, and he was down to its third ambulance, a 12-year-old unit, which was the only ambulance in service for about five hours.
Creech said the city has not proportionally staggered its purchases of rigs in the past.
“I don’t know what else to do,” Creech said. “It’s 20 years old. The Drummond was 23 years old, and I sold it to a place in South America for $11,000.”
Mayor Kyle Stack said she doesn’t know where the city would get the money to purchase a fire truck or an ambulance.
“I can’t say right now that I am going to support it, because we have other things that we need to look at first, but I know (Creech) needs to know, because (the others) are going to be ordering,” Stack said.
Creech said they didn’t know five years ago how much money they would now be spending on repairs.
“The tough thing is, had we had a crystal ball five years ago and known the money we were going to sink into it, and we knew it was going to have a net value, set the clock back four years ago, a 15-year-old rig, worth $80,000 or $90,000, and we wouldn’t have dropped another $75,000 (on repairs), that would be $160,000 off your net costs,” Creech said. “That would have been a great replacement plan, but you had just bought me a Smeal (fire apparatus) four years ago, so I can’t complain.”
(Sue Suchyta can be reached at [email protected].)