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County to save $80K by paying off ambulances early
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The county is planning to pay off the $215,000 balance on a USDA loan for two ambulances. The move will save around $80,000 in interest by paying it off early.
The county began looking at early payment during a Safety Committee meeting to discuss the Ambulance Service budget in early April. Prior to that meeting, County Executive John Pelham discovered there was enough money in the department’s fund balance to pay off the loan and still leave adequate reserves.
“The reason we did the USDA loan was because we got a $35,000 grant on that purchase by getting the loan through them,” Pelham said. “Now those were financed like a house,” Pelham said of the long-term loan. “Those ambulances would be old, worn out and gone and we’d still be paying on them, so we really need to pay them off.”
According to director of accounts Linda Hillis, early payment would save $80,000 in interest over the life of the original loan. Pelham pointed out the Ambulance Service showed a fund balance of close to $1.3 million in April with four months to go in this year’s budget. Ambulance Service director Brian Jennings pointed out collections from Medicare, private insurance and patient services would amount to around $120,000 per month. Payroll and expenses also come out of this, but Pelham said he felt it was a good idea to look into the possibility of early payment.
In addition, the $100,000 capital outlay note for Ambulance Station 4 will be paid off in May. The county has also issued a capital outlay note of $180,000 for two new International ambulances to replace an ambulance that was wrecked last year, and an ambulance which was taken out of service due to maintenance issues.
“What I asked Linda was whether there was a way to pay those two new Chevrolet ambulances off out of the fund balance,” Pelham said. “They’re set up right now to be paid out of debt service, and we could pay for them that way. But if we could take that out of here, when Ambulance Station 4 is paid off, then the only loan that would be left is the $180,000 for the two new Internationals.”
Pelham said the move should leave an estimated fund balance for the 2010-11 budget of around $600,000.
The windfall that will allow the move is due, in part, to the county purchasing an additional ambulance, referred to as the day truck, which allowed the service to handle transfers to metropolitan hospitals as well as local transfer runs. The additional income has also allowed the service to greatly reduce the need for property taxes to operate the service.