Kenwood Fire Department revisits reserve fund needs – Kenwood Press News

By Jay Gamel

New member of the Kenwood Fire Protection District Board of Directors, Jack Atkin, wasted no time getting to work on the district’s financial outlook for the next decade. Atkin joined longtime fire captain Tony Ghisla in inventorying and analyzing the district’s reserve funding, anticipating handy replacement needs as equipment wears out, breaks or otherwise becomes misused. apart.

Ghisla and Atkin undertook the project in early October 2021 and submitted their report at the monthly board meeting on January 11.

“This is the first time we’ve had a report like this,” Chief Daren Bellach said. “It’s clear and easy to read, and it’s saved the district thousands of dollars by not needing a consultant to do it for us.”

Atkin has a long history of financial involvement, having worked professionally in banking, finance, investments and real estate.

“At the time of this study, the estimated current replacement cost of these assets was approximately $3.3 million. These assets require major maintenance or replacement at predictable intervals, and the cost of such replacement can weigh heavily on operating budgets if careful financial preparations are not made,” the report opens.

The study offers suggestions on how much to set aside to ensure adequate replacement funds are available when needed and examines the adequacy of current reserves and reserve policies.

The good news is that the district’s existing reserves of $2.3 million cover 97% of projected needs, though they could be $66,000 lower by June 1 if projected spending is accurate.

An annual donation of $222,000 from the operating fund should maintain a “fully funded reserve,” the study suggests. This amount, however, is a best estimate to cover future events and is subject to change.

Figures are based on current assets and expected time frames for deterioration and replacement. The department’s five big trucks represent more than 70% of the district’s replaceable assets, and any change in their status could have a significant effect on projected financial requirements, the report notes.

Engines that have already reached their “end of life” are not included in the replacement figures, assuming that their replacement has already been funded. When replaced, the contribution can jump significantly, up to $90,000 for one cited example.

The report also notes that the district could find better interest rates on replacement reserves. Current yields are not keeping up with inflation.

The report recommends making regular annual contributions and suggests that the replacement fund study be updated at least every three years or sooner if necessary (for example, if a new engine is put into service).

Currently, the district maintains a “reserve fund.” The report suggests that non-recurring income (from donations or grants) should not be used for this fund, but should be transferred to a separate provident fund.

The inventory paints a picture of the costs of operating a modern fire company.

Fire pump replacements range from a minimum of $115,000 to replace the utility/rescue truck to $800,000 for each of the two pumpers, and $475,000 for the water tender and engine equipped with a forest fire. The total fleet replacement cost is $2-2.7 million.

Vehicles have a useful life of 12 to 20 years, depending on many factors, and annual contributions can range from $129,000 to $289,000, depending on actual longevity.

Other expensive equipment includes a large air compressor; automatic defibrillators for each vehicle; radios and pagers; another air compressor for scuba tanks carried in the event of an intense fire; helmets and respirators used with this equipment; thermal cameras; firefighting suits, called “switches”, both for regular and wild use; and tires and batteries.

Other equipment includes a fuel tank, a huge generator to run the fire station in an emergency, HVAC and additional heaters, cooking equipment, a 40ft storage container, building materials flooring, paving and roofing, batteries and rescue equipment, computer and office peripherals, and tables, chairs and awnings.

Pavement replacement at the fire station can cost $90,000 if needed.

Some equipment is jointly owned with other districts, including a burn trailer, switch washer, and dryer extractors – heavy-duty units that remove toxic particulates and smoke from safety suits.

The report is included in the 2022 Board of Directors Agendas and Minutes for January 2022 at kenwoodfire.com/kenwood-fire-meetings.html?bpid=10266.

About Joshua M. Osborne

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