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Vehicle talks bring change to county's grant policy
Nov 25, 2012 - By Eric Blom, Staff Writer
The potential purchase of one vehicle incited a divisive change to Fremont County's fiscal policy. A recent decision made by the Fremont County Commissioners means departments might now benefit more from grants, but the county's capital revolving fund may lose money in the future.
Usually, if the commission approves the purchase of a vehicle, the county uses money from its capital revolving fund to pay for it. The department that uses the vehicle pays back the fund through a lease arrangement which lasts several years and includes a small interest fee.
During their meeting Nov. 13, commissioners discussed a different situation regarding the potential purchase of a pickup truck for the Fremont County Sheriff's Office that is equipped to use compressed natural gas or petroleum for fuel.
In that case, the county's capital revolving fund would pay about $32,000 for the truck as well as roughly $6,000 to $10,000 to convert it into a police vehicle while a grant from Encana would pay for the CNG device.
Under the county's traditional policies, the sheriff's office would have to pay back the capital revolving fund for the cost of the truck, outfitting the vehicle, and the CNG device, for a total of roughly $50,000 plus interest.
At the meeting, Sheriff Skip Hornecker said that by following that policy the grant money ends up in the capital revolving fund, which was not ethical.
"I refuse to pay interest on a grant," he said.
Glen Steers and Pennie Buffington of the transportation department, which facilitates vehicle purchases, also balked at what they saw as the county using grants to increase the capital revolving fund.
"I don't see why the grant has to be replaced," Steers said.
Buffington said she writes many grants.
"My intention when I did that was to help the general fund," she said. "Seeing that money swept into the capital revolving fund takes away the incentive."
As an employee, she said part of her hope for keeping the general fund strong was to lessen pressure on departments when the county writes budgets.
County clerk Julie Freese and treasurer Scott Harnsberger expressed concern that changing the policy would hurt the capital revolving fund. Harnsberger also said he views the policy as ethical.
County commission chairman Doug Thompson said the commission would have to settle the issue before it could approve purchasing the new truck.
The capital revolving fund acts like the county's own bank. Departments in a sense borrow money from the fund and pay it back with interest over several years. The fund uses the money departments pay back one year to buy vehicles and equipment the next year. Without the capital revolving fund, departments would either have to have the cash up front to pay for a purchase or get private financing.
Jim Massman of the treasurer's office said that private interest rates often are much higher than what the capital revolving fund charges.
The county started the fund in 1993 and added a little to it every year for many years. The fund is currently worth about $6.5 million in cash and assets.
Every year the county spends about $1 million on vehicles and equipment. In recent years, though, the county has not had to add any money to the capital revolving fund to cover those purchases because lease payments from departments to the revolving capital fund have covered the new purchases.
Massman called this an "enviable position."
Massman said about $450,000 of the capital revolving fund has come from grants. The capital revolving fund would probably not be in that position if not for those grants.
He also said that having departments pay back the full cost of vehicles, regardless of whether grants helped pay for it, ensures that the vehicle can be replaced. It can be replaced because the department that received it will have put the money for a replacement into the capital revolving fund. He understood concerns with the policy, but Massman said, "It's two different pockets in the same pants."
At the commissioners meeting, vice-chairman Pat Hickerson said "departments have to have some incentives to try them, but having a negative incentive, they're not going to try these things," Hickerson added.
CNG-capable vehicles cost more to purchase at the outset than regular diesel or petroleum models. Hickerson also noted that departments save on gasoline money by having a CNG vehicle.
Commissioner Travis Becker thought it was important not to change the county's policy.
"If in a year we get more grants we'll be upside down in capital revolving," he said.
The commissioners voted 4-1 to change its policy for year. Departments will not have to pay back capital revolving for the portion of purchases covered by grants.
"The flow of grant money won't upset the whole apple cart, and we want to give people an incentive to get grants," Thompson said after the vote.
Though it allayed the sheriff's ethical concerns, the commission did not give final approval to purchase the new CNG pickup for the sheriff's office. The commission postponed the decision until it could get a more exact estimate of the cost of outfitting the vehicle for police work.