Town reconsiders police radio payment options
FRONT ROYAL – The Town Council has learned that it will not be able to loan itself money to purchase a new $545,000 Motorola police radio system.
The council instead came to a consensus after a Monday work session to pursue a 10-year Virginia Association of Counties loan due to unexpected expenses.
Finance Director B.J. Wilson explained that those expenses include that the town’s contribution to Other Post-Employment Benefits – a health care system for retired employees – is increasing by $1.2 million.
He said that money would come out of the general fund’s three-month required reserve, which is $1.8 million over the required amount.
Wilson said that reserve would further decrease when the town contributes between $300,000 and $400,000 to the Virginia Retirement System. Although that amount will be unknown until next month, he said it would likely decrease the required reserve to around $200,000.
With that in mind, Wilson said staff no longer recommends that the town pursue outside loans for the police radios. A 10-year loan would result in $65,820 annual payments, or $113,205 total, according to the meeting’s agenda sheet.
Mayor Hollis Tharpe said the town has “no choice” but to pursue loans.
Councilman Jacob Meza disagreed and said the town could use its enterprise funds to save interest costs.
Wilson explained that enterprise funds do not have much extra money as they were used to fund ITFederal’s pump station and increased winter electric bills.
Councilman John Connolly agreed with Wilson’s suggestion to obtain an outside loan for the purchase of police radios, saying he was uncomfortable dipping into the depleting surplus. Councilmen Eugene Tewalt, William Sealock and Christopher Morrison agreed.
Wilson said he would put the loan back out to bid to see if the town can get cheaper interest rates, but this will take a month.
Sealock noted that purchasing the radios is an “expediency situation” as they must be ready when the Front Royal Police Department moves into its new station around the year’s end. He added the council might choose another route upon learning more regarding the VRS payment.
Meza suggested that the town purchase the radios with its general fund and repay itself when granted a loan and councilmen unanimously agreed.
“We’re kind of doing this on an interim just to get things moving. We need to get things moving,” Tharpe said.
Council will vote on the purchase during a special Sept. 4 meeting.
All councilmen were present at the meeting.