Consider a recommendation for a budget adjustment and approval to authorize early loan payoff to eliminate debt obligations and maximize cost savings by avoiding future interest in the amount of $1,695,762.11 from the Public Safety Fund.  (Chavez)

Initiated By:  Steve Chavez

The Roswell Fire Department currently has apparatus financed through PNC Bank with an outstanding balance of $2,009,520.31. Following the scheduled payment in the next fiscal year, the remaining balance would be reduced to $1,695,762.20.
In addition to the financial considerations, several of the apparatus under this loan were destroyed during the October 24 flood event. Despite the loss of these vehicles, the City remains financially obligated for the associated debt.

Paying off the remaining loan balance would resolve these outstanding obligations, follow our 5-year plan, and ensure the City is no longer making payments on apparatus that are no longer in service.
This proposal provides an opportunity to eliminate debt tied to both existing and destroyed apparatus, avoid future interest payments, and secure full ownership of currently deployed frontline equipment.

Financial Impact (Revenue and Expenses): Budget Adjustment Needed 

Revenue: Cash Reserves

Expense: 55004125-698001 - $1,695,762.11

The remaining balance of $313,758.20 will be paid at the beginning of Fiscal Year 2027, completing the full payoff of the apparatus loan.

This action will eliminate ongoing debt service obligations and prevent future interest payments on the loan, resulting in long-term cost savings for the City.

Additionally, it secures full ownership of the current apparatus and resolves financial obligations tied to equipment that is no longer in service.

None necessary

The finance committee is the first committee to see this item.

Staff recommends approval to authorize early retirement of apparatus loan obligations, resulting in debt reduction and elimination of future interest expenses.