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An Editorial Opinion of the Demopolis Times

The City of Demopolis is not going to have to go into debt to pay for a new ladder fire truck that is needed to replace its aging 22-year-old current truck.

Mayor Woody Collins said the truck is nearing the end of its life expectancy with the department, and the city is needing to find a way to make sure it can afford to purchase a new truck. If it cannot get a new ladder truck, it is likely going to affect its Insurance Services Office, Inc. rating. This organization comes out and will rate the fire department based on its equipment, policy and procedures. The better the rating, the lower the premiums that homeowners will have to pay for their insurance locally.

The Finance Committee has been researching its options on how to make this happen. They had a few options to consider including financing the purchase using loan, paying for the fire truck out right from the general fund or using money that’s already in savings and allocating it for the project.

Collins said the city already had around a $1.8 million certificate of deposit already in the bank. Because it will take around three to four years to get the truck, the finance committee recommended using the savings plus the interest to pay for the truck, which will likely cost about $2 million.

“With the interest, it will more than pay for the truck,” Collins said. “Certainly, we might could have paid for it up front and gotten a discount, but after looking at the numbers, the finance committee thought it was the best option considering interest rates right now to just use the money in the CD and let it accrue interest until when the truck is ready.”

While high interest rates aren’t great for loans, it’s a great time to put money into savings because interest rates are higher than they’ve been in a long time. So saving up to make a purchase is the best way to go if you can afford to do it.

We applaud the work that the city has done to research this matter. It’s always a great idea to save up for something over going into debt to finance it.