Dale Girard
Mayoral Notes
This past week, the City Council approved a five-year lease-purchase plan for the Department of Public Works (DPW), marking a step toward reducing long-term interest costs for the city. By opting for a shorter lease term over a longer one, the council managed to create nearly $75,000 in savings over a 10-year lease — an undeniable win for Claremont’s taxpayers.
However, this decision was not without its challenges. The shift to a shorter payment plan exposed a critical gap: the previously budgeted amount for these payments was far less than what will now be required to be paid from the 2025 budget. This unexpected difference has understandably raised concerns among city staff regarding the 2025 budget. With higher lease payments now on the horizon, the DPW may find itself unable to purchase much-needed capital items in 2025, further delaying necessary upgrades and putting us behind on essential capital improvements.
Following the meeting, Director Bates provided a detailed breakdown of what equipment should be replaced under the current long-term plan, as previously discussed during the budget hearings. Her analysis projects an additional $192,000 in lease payment purchases, which was planned in this year’s budget.
Unfortunately, during the budget process, the council did not have a full breakdown of lease payments, which means we are left working with incomplete information. The council delayed approving the enterprise fund budgets hoping to receive the leasing information prior to finalizing the budget.
Having budgeted a 10-year lease (based upon what we heard during the discussion), we are faced with a financial strain — nearly $50,000 in additional payments which needs to be covered in the current budget. This figure is sobering and suggests that equipment purchases could drop by 25% from the original requests — a potential hit to the efficiency of our departments. By approving the five-year plan, we made the fiscally responsible choice to avoid that unnecessary additional interest expense, but it will require adjustments to our future budgets to make it work.
One of the challenges we face as a council is that we do not have the authority to engage in line-item budgeting. I understand that some concerns have been raised about the impact this change will have on the DPW’s operations, but I believe the city administration is already working on a prudent plan to ensure the department continues to function effectively. Their goal is to move resources as needed, ensuring that essential equipment is procured without jeopardizing the city’s finances.
Looking forward, my primary objective is to minimize the interest burden on Claremont’s taxpayers. By avoiding long-term financing options with excessive interest, we can stretch our dollars further and reduce unnecessary expenses.
Many smaller communities have already adopted Capital Reserve funds as a tool to reduce reliance on borrowing. While contributing to such funds may present a short-term hurdle, the long-term benefits would be significant for Claremont. Capital Reserve funds allow communities to plan for major purchases, gradually building up the necessary resources to make investments without accruing interest or taking on debt. It’s a strategy I hope we can implement to strengthen our financial future.
As we reflect on this recent leasing experience, I am optimistic that we’ve begun to change the way Claremont approaches large purchases. By prioritizing fiscal responsibility, we can ensure our city continues to provide the necessary services and infrastructure improvements while protecting the long-term financial health of our community.
