Texas Fire Chief - Fall/Winter 2007 - (Page 22)

©iStockphoto.com/Steven Robertson trust on to-be-acquired sites, giving the lender a mortgage on the facility. Using this method, it is common for the borrower to provide title insurance, survey, appraisal (on a projected as-built basis) and an environmental Phase 1 study. It is not unusual to secure financing for up to 20 years for this type of financing. Last year, Travis County Emergency Services District No. 2 in Pflugerville used this method to finance three real estate projects other than fire stations: • A new administration building that freed up room in its central fire station • An educational building that can also be used for community meetings • A training facility for its own firefighters and others from the surrounding area Travis County ESD No. 2 was able to secure financing for 15 years with semiannual payments at a rate of under 5 percent. The structure was a tax-exempt note secured by a deed of trust with a “subject to annual appropriation” clause. When the land is already owned or under a long-term lease by the borrower, the lender can enter into a ground lease with the borrower and sublease the property back to the borrower. The lender then holds a leasehold interest as its collateral for the financing. A term of up to 20 years also is usually available under this method if the underlying lease has a sufficient remaining term. Normally, the ground lease is written for a term of 10 years longer than the sublease but terminates when the sublease is fully paid. Fire trucks Fire trucks are commonly financed for five to 10 years, but a more expensive ladder truck, for example, can be financed for up to 15 years. The borrower is responsible for all insurance, taxes (if any) and repairs, just as he would be if he had purchased the trucks outright (sometimes referred to as a triplenet lease). Firefighting equipment Defibrillators, air packs, protective gear and other such equipment can usually be fi nanced for five years with payments designed to meet the needs of the borrower. Lease-purchase fi nancing is simple, quick and cost-effective, allowing the fi refighting unit to spread the capital cost over the life of the assets without having to call an election to issue bonds. If your organization has growing pains and ongoing public service needs, keep tax-exempt financing in mind. You can finance up to 100 percent of the cost of equipment and buildings, and the financing helps you effectively manage capital costs by spreading them over time. Tax-exempt interest rates and a quick and convenient process from proposal through funding without costly and time-consuming bond referendums helps keep the focus on protecting lives and property, rather than on financial worries. Don Grimes is a senior vice president and investment banker for Wells Fargo Public Finance based in Houston. Phone: (713) 319-1800. E-mail: Don.W.Grimes@Wellsfargo.com. TEXAS FIRE CHIEF Fall/Winter 2007 For generations, we've worked toward one goal. Everyone goes home. Since 1969, VFIS has protected the life and well-being of those who serve. We've supported generations of emergency responders seeing many through their entire career and pledging the same for those who follow. Through the years, we've maintained our goal of sending everyone home safely at the end of the day. Today, over 15,000 emergency service organizations throughout the United States and Canada choose VFIS for our unwavering commitment to their health and welfare. • Safety training • Risk management • Protection from liability VFIS of Texas 3420 Executive Center Dr., Ste. 301 • Austin, TX 78731-1626 (800) 252-9435 • www.vfistx.com 22 330104_generations.indd 1 5/18/07 12:40:14 PM http://iStockphoto.com

Table of Contents Feed for the Digital Edition of Texas Fire Chief - Fall/Winter 2007

Contents Executive Director’s Report Fire Chief of the Year What is an Emergency Service District (ESD)? Tax-Exempt Financing 101 The Benefits of Vehicle Infrastructure Integration (VII) Southwest Fire Rescue 2008 Preview Membership Application ‘Courage to be Safe’ Program Aims to Save Lives Red Truck, Green Building Index to Advertisers

Texas Fire Chief - Fall/Winter 2007

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