city, city council, february, johnstown, johnstownindependent, johnstownvillage, ThisWeek, ThisWeekNews

Council sweeps aside street-cleaner lease request

Monday February 9, 2015 12:04 PM
See the original online story here

Johnstown Village Council’s Feb. 3 meeting was mostly business as usual, with the exception of a mild debate regarding a street sweeper.

Village service director Jack Liggett asked council to approve a measure that would allow the village to lease a new street-sweeping machine.

Liggett said the village’s 1999 model and is in need of repairs that could cost as much as $25,000. He also pointed out that the machine is designed to clean parking lots, not an entire village.

He proposed entering a lease with a supplier for a 2015 Tymco 435. The $104,000 machine would be leased for 36 months at an interest rate of 3 percent, he said.

Liggett said a new street sweeper would more efficiently clean curbs, feature hydraulic brooms, help reduce pollutants in stormwater runoff and likely last 15 years.

Councilman Bill Van Gundy asked where the village would get the money for the lease.

Village Manager Jim Lenner said the only available money is in the estate-tax fund, adding that expenditures in the general fund already are earmarked through 2018.

Liggett said a lease would be a better option than a purchase.

“Buying the street sweeper all at once and not leasing it would be detrimental to our ability to bond more money,” he said. “By spreading it across over a lease, it makes our bondability better.”

According to Lenner, the balance in the estate-tax fund is $656,164.

As of Jan. 1, 2013, the estate tax, which had been imposed on transfers of assets from resident decedents, was abolished by the state.

Drawing such a large amount from special funds poses the risk of receiving a lower bond rating from Moody’s Investors Service Inc. and, therefore, higher interest rates. In 2014, Johnstown received the Moody’s highest rating of MIG 1 for short-term debt.

According to the Moody’s website, the MIG 1 designation “denotes best quality. There is present strong protection by established cash flows, superior liquidity support or demonstrated broad-based access to the market for refinancing.”

Mayor Sean Staneart said only the general fund should be used for such an expense, adding that the estate-tax fund shouldn’t be used unless the expenditure somehow generates income to replenish it.

“The street sweeper generates goodwill, not money,” he said. “Never, since I’ve been here, have we tapped into the estate fund to buy equipment. I think we need it, but I don’t think we have the finances for it. We already have a tight budget, and at some point, we have to start living within our budget. If everyone says they want a street sweeper, then let’s go to the voting booth.”

The vote was 4-3, with Sean Staneart, Bob Orsini, William Van Gundy and Cheryl Robertson voting against the street sweeper and Sharon Hendren, David Keck and Carol Van Deest voting for it.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s