For the first time in its history, the Orcas Fire Department has paid off its bonds early.
“It’s almost unheard of to pay off debt service early,” said financial officer Rick Anda. “It’s certainly the first time in our history, and it may be the first time in Washington state.”
The Board of Fire Commissioners approved to pay off the 2014 bonds in the amount of $195,000 and the 2013 Bonds in the amount of $185,000 on Dec. 1. The result is a net savings of $66,750 in interest. The savings will be used for Orcas Island Fire amd Rescue operations.
In 1999, voters approved a bond levy of $2 million for new construction of fire stations and aging equipment replacement. The funds built the Headquarters Station 21 in Eastsound, purchased a new four-wheel drive ambulance, four Wildland Attack Structural Protection (W.A.S.P.) engines, a Rescue Response rig to replace the 1970 truck, and built the final project, the Deer Harbor/Spring Point Station, which is slated to be done by Thanksgiving of this year. Builders Wellman & Zuck were the low bidders for the Deer Harbor station at just over $425,000.
“At the time (of the 1999 bond) it was kind of a guess how much money was needed,” Anda said. “Now that we know the final cost of the Deer Harbor station, we looked at our final cash balances, and we thought, ‘do we just sit on this or what?’”
Coupled with the fact that interest on the savings had dipped from 4.7 percent to 2 percent, Anda says it made financial sense to pay off the bonds.
The district has around $300,000 in its bank account, which will get them through March 2012, when property tax money starts coming in.
“It cuts us short on cash for now, but it’s doable,” he said. “We don’t have any immediate capital needs for right now.”
Orcas Fire’s current levy runs through 2014. Because the district doesn’t have to make bond payments now, it doesn’t require as much money from the levy. This means it could put a reduced levy before voters prior to 2014.
“Now we can reduce taxes that go to the fire department by 10 percent,” Anda said. “(Paying off the bonds) really gives us some flexibility.”
