City seeks board authorization for vehicle purchases

An authorization to purchase

26 vehicles through the state and local government syndicate that uses its buying power to negotiate lower prices is on the Hot Springs Board of Directors’ consent agenda Tuesday night.

Ten Ford interceptor sport utility vehicles for the Hot Springs Police Department account for

$330,224 of the $779,620 cost allocated across the police, general, fire, street, solid waste, water and wastewater funds. Nine of the police vehicles have a $32,957 cost, according to order forms included in the board’s packet. The K-9 patrol vehicle includes rear air conditioning, increasing its cost to $33,602.

It has yet to be determined which police vehicles will be replaced by the new units, according to the ordering forms. The new vehicles are part of the $370,500 capital line item in the police department’s $14.03 million 2021 budget. The 0.50% public safety sales tax that supports the police fund doesn’t generate revenue sufficient for the department’s annual operations, requiring an $8.12 million subsidy from the general fund.

The 11 Ford SUVs the board authorized for the police department last year were part of the 24 authorized for the city’s fleet. Sixteen vehicles were authorized in 2019, including six Ford SUVs for the police department.

Short-term financing available to local governments will pay the more than $500,000 for the police vehicles, a four-wheel-drive Dodge Ram 1500 special service pickup for the assistant fire marshal and about a half dozen vehicles for general fund-supported departments.

Amendment 78 of the Arkansas Constitution lets local governments finance purchases with a useful life of more than one year for up to five years. The city is financing $2.94 million in capital expenses this year, including $2.24 million for a tilled aerial ladder truck for the Hot Springs Fire Department.

The board adopted an ordinance last month approving U.S. Bancorp Government Leasing and Finance to carry the five-year note at an interest rate of 1.13%, or 68 basis points above the fiveyear treasury rate on the date the city opened bids for the loan.

“For comparison purposes, in 2019 and 2020 the rates were 2.57% and 1.55%, so this is significantly lower than what we’ve got the last couple years,” Finance Director/Treasurer Dorethea Yates told the board last month.

It will cost $613,982 to service the debt in 2021.