According to a report from Foster’s Daily Democrat, the city of Somersworth, New Hampshire, is still on track to finance its new fire station project after the City Council agreed Monday to use reserve funds to pay for a large amount of the $1.3 million budget increase on the building.
The new station will replace the existing 45-year-old, 8,100-square-foot station located at 195 Maple Street. The city originally approved a $7.7 million bond to finance the station, but city officials now say the cost has increased to a guaranteed price of $9 million. This maximum potential cost doesn’t include interest accrued from the existing bond.
Last week, a special City Council meeting discussed that either the project will be delayed or the city could finance it with $240,000 from the fund balance toward the station, $600,000 from the American Rescue Plan Act (ARPA) to pay for ventilation system costs, increasing the bond commitment by five years, and increasing the bond authorization by $460,000 to a total bond authorization of $8.1 million.
During the Monday meeting, Councilor Matt Gerding suggested that Somersworth still use ARPA funds, but that it ups the reserve funds it plans to commit to the project instead of extending the price and life of the bond, which the city estimates could accumulate $1.7-2 million in interest, if extended.
Gerding said that Somersworth’s reserve funds sit with the city’s undesignated money and is similar to a savings account. He proposed an amendment to the resolution on financing the station which will appropriate $700,000 from the general fund unassigned to the fund balance.
Deputy Mayor Dave Witham agreed that this was a better funding mechanism; although the fund acts as the city’s personal savings account, it is funded enough to support the appropriation. Witham also said the policy states that the fund balance should be somewhere between 5 and 15 percent of the city’s annual operating budget.