Northwest Arkansas Democrat-Gazette
Contingency for fire projects eyed
SPRINGDALE — The city has spent or earmarked most of the Fire Department’s bond money with several projects still to complete.
City officials aren’t alarmed. They found a contingency fund.
“Bond funds are designed to run out of money,” said Wyman Morgan, the city’s director of administration and finance. Arkansas law requires the city to spend the bond money within three years after it is received. He said Springdale’s deadline is spring 2021.
The city opened Fire Station No. 7 in July on the west side of town, the first of three stations approved by voters in the bond issue. The city budgeted $10.5 million for the construction of all three.
The city also plans a classroom building at its fire training center for about
$2 million. Expanding the training center is progressing from the design phase to pricing the elements, Morgan added.
The bond revenue also paid for engines, ambulances, a rescue truck and other equipment for the new stations and a new radio system for the 130 department employees. Money spent or earmarked for those purchases total about $3.4 million.
The bond issue plus interest its earned totaled $16.4 million.
Station No. 8 is under construction in the city’s industrial park on the east end of town, with completion expected in April, Irwin said.
The City Council in November approved Milestone Construction as manager to build Station No. 9 in the city’s northwest corner. Officials should receive a construction cost estimation in March, Morgan said. As of Jan. 8, the city paid $4.8 million on the three new stations, with $5.6 million left.
The city won’t know exactly how much bond money is needed until the bids for work at Station No. 9 and the training center are returned. Completion dates also haven’t been determined, he said.
City staff created estimates for all projects in 2017 to present details to voters before the February 2018 bond vote, Morgan said. Three years later, some of those estimated costs have increased, for example: the price of steel.
If the bids come back higher than expected for the work, the construction manager can consider using less expensive materials or other ways to cut that budget closer to the city’s estimate, Morgan said.
The city saved money by using the same architectural design on the new fire stations as Station No. 2 and Station No. 3, built in 2015.
“We don’t know we’re short yet, but we want to make some plans just in case,” Morgan said. “We feel we can confidently build the new stations and the training center and have some left over.”
“But if we come up short, the council will ask if we have a plan,” Irwin said.
Irwin reported Jan. 21 to the City Council that the department could use $300,000 of state Act 833 funding as a contingency to build Station 9 if money runs short. The act returns to fire departments tax money residents pay in their homeowners insurance, fire insurance and property taxes, Morgan said.
“It was designed for fire department funding,” he said.
The Fire Department receives nearly $90,000 a year in this money and has saved most of it for the past three years, Irwin said.
At the end of December, the city paid $3 million for Station No. 7, $1.5 million for Station No. 8, $33,000 for work on Station No. 9 and $22,000 for the fire training facility, Morgan said.
About $500,000 remains in the fire bond revenue not dedicated to any project.
Irwin said the new ladder truck for Station No. 8 cost about $1 million and already serves the city from Station No. 1.
The city won’t have enough money to staff Station No. 9 when it opens, Irwin said. Salaries and benefits for the 12 firefighters to minimally staff the station will cost $1.5 million a year. City staff knew the bond money couldn’t provide the salaries when they planned for the bond issue.
The department in 2019 received a federal grant paying the salaries for three years for six firefighters who are already at work. Then the city will have to pay those salaries, Irwin said.
Morgan said he wasn’t worried about getting the money for firefighters or the training center.
“Things are happening so fast in Springdale. We knew we wouldn’t need the station immediately, but it’s necessary to cover the town as it grows. We’ll eventually get it staffed,” Morgan said.
He noted the growing revenue from sales tax. The receipts grew nearly 5% in 2019, according to figures provided by the Chamber of Commerce, although the City Council budgeted most of the increase for employee raises this year.
“But you want the bond to run out of money for accessories, not buildings,” Morgan said.
He’d rather use the bond and Act 833 money first to build the fire training center and Station No. 9 than on accessories to furnish them. The department had always eyed the revenue from residents’ insurance for the furnishings. Irwin said the fund will build back up, and the department can buy the furnishings in a few years as needed.
The 9,200-square-foot building at the training center will include offices, two classrooms, a garage for training with reserve fire equipment and a small kitchen, Irwin said. The department will need tables and chairs for the training room and “some stuff that’s typical to any fire station out there,” like an air filling station and extension hose.
The department built a training tower with money from the city’s capital improvement fund.
“We don’t know we’re short yet, but we want to make some plans just in case. We feel we can confidently build the new stations and the training center and have some left over.” — Wyman Morgan, the city’s director of administration and finance