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It Has Been a Long Time Coming

By Staff | May 1, 2015

The fire department is moving into their new digs on Highway 3 on Friday May first. But, just because there is a move-in date doesn’t mean everything is done. First, there is the small item of paying for the Fire Hall. And, luckily enough, that was the topic of conversation at the last Finance Committee meeting. The special meeting was called to address the amount needed to finance the Fire Hall at the request of Councilman Kraft. To this point the city has self-financed this project borrowing $700,000 from the City’s Infrastructure Fund with the understanding that the fund would be reimbursed in full upon obtaining financing. In attendance at the meeting were committee members: Councilman Kraft, and Councilman Hoffert. Also present was City Auditor Heisey with Mayor Geiszler absent.

City Auditor Heisey reported that the current Fire Reserve Fund (Fire Hall Building/Equipment Fund) totaled $457,367 noting that the amount still owed to the City of Rugby’s infrastructure fund is $700,000.00. Expenses paid to date for the construction of the Fire Hall including land acquisition are $906,688. The estimated remaining amounts owed to contractors are: American Builders -$93,146; Johnson Plumbing – $48,314; ICON Architectural Group – $16,582 making a total owed $158,042. To date, donations for this project are as follows: JDA donated $75,000 for the land and demolition of Don’s Drive-In; Economic Development Corp donated $50,000 and the Rugby Fire Department Auxiliary has donated $253,000. Monies given by the Fire Department Auxiliary are monies that have been generously donated by the citizens of Rugby and surrounding areas to the Auxiliary, by either direct donations, or by attending events that proceeds were earmarked for the Fire Hall construction.

There was also an $11,700 transfer from funds that were originally appropriated to City Council. Property tax revenues collected and used for the Fire Reserve Fund since 2010 totaled $147,877. The final estimated balance of the Fire Reserve Fund after all costs were paid is expected to be around $299,235. If all of the remaining balance of the Fire Reserve Fund is transferred back to the Infrastructure Fund, $400,000 plus financing costs would be needed to cover the amount owed. It was noted that the Fire Department Auxiliary would be donating an additional $27,000 and possibly more. In addition, the Fire Department had committed $20,000 for the construction of the Fire Hall. Rugby’s City Auditor Heisey explained the annual five mill levy limitations of $31,776 and that levy limitation would limit what the city can borrow for the project. City Auditor Heisey explained that if the entire five mills was levied for the building for a 20 year period, no additional money could be levied during that time for equipment that may be needed. City Auditor Heisey advised that in her opinion, the city should not levy the entire 5 Mills if at all possible. They should allow for 1 or 2 Mills to be appropriated for the purchase of a truck. Councilman Hoffert and Councilman Kraft felt that at least $10,000 should be left in the Fire Reserve Fund and any money borrowed should be no more than needed. Councilman Hoffert and Councilman Kraft felt that after all pending donations were received, the city would only need approximately $360,000 plus financing costs to pay back the Infrastructure Fund used to finance the project. Everything talked about at this meeting will be reviewed by the whole council at the next city council meeting and be voted on accordingly.

Just a few things to explain some of the different accounts: the Fire Reserve Fund, is a fund that has both donations and monies levied on Rugby property owners in the form of real estate taxes levied(five mills). This fund has been used to pay for all construction, land, consulting, engineering, etc. to date. Any remaining money in the account will be used to reimburse the infrastructure account, the remaining balance owed to infrastructure fund will have to be financed by selling municipal bonds. (Limited tax bonds). In the meeting City Auditor Heisey wanted to emphasize that Fire Department operating costs, for reimbursing costs to the Fire Department, were appropriated within the general fund of the city and that the Fire Reserve Fund is a completely separate fund. She also noted the that the Fire Department also has an independent cash fund.

In addition, it should be known that the Fire Department has their own checkbook/checking account and the city reimburses them for fire department operational expenses out of the budget for the Fire Department within the General Fund. The City splits the majority of the expenses incurred by the fire department 50/50 with the Rural Fire Department. So there is a 50/50 split for most expenses. The Fire Department Volunteers also get paid a small amount for each fire they respond to, but whatever the amount they are paid doesn’t nearly cover the time and risk these men and women take to keep the area safe. The Fire Department Auxiliary is an official 501/3C non-profit corporation which was set up to take donations that are tax deductible for the donor.

Donations can be made out to the Rugby Volunteer Fire Dept Auxiliary and sent to PO Box 311 Rugby, ND?58368, or drop them off at City Hall.

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