Lealman willing to loan Tierra Verde money for fire truck

LEALMAN — Residents in tony Tierra Verde could be getting a new fire truck with a little financial help from taxpayers in this unincorporated area, which has some of Pinellas County's poorest residents.

Tierra Verde lost its fire truck in October when it decided to use Lealman to deliver fire and EMS services to the island rather than St. Petersburg, which had long provided that service. St. Petersburg took the truck when its firefighters and EMTs left the island. Since then, Tierra Verde has borrowed one of Lealman's older trucks.

Lealman fire Chief Rick Graham said taxpayers won't suffer if the Fire Commission lends Tierra Verde up to $250,000 to buy a new truck because the island will be charged interest at the same rate the money would have earned had it stayed in Lealman's accounts.

Lealman taxpayers won't make any profit on the deal because the law prevents them from charging an interest rate higher than what they earn by having the money in savings, which is expected to be 2 percent or less.

On the other hand, Tierra Verde will save money because the interest rate being charged by Lealman is less than the 4.5 to 5 percent the island would have to pay if it got a conventional loan on the open market. In essence, by borrowing from Lealman, the island could save 2.5 to 3 percent or more in interest each year.

Graham said he wanted to charge Tierra Verde more but was prevented by law.

"We're not allowed to make less interest and we're not allowed to make more interest. We're revenue neutral," Graham said. "This is not a detriment to either community. It's a positive. . . . I wouldn't even support it if we were losing money. It'd be crazy."

The Lealman Fire Department became responsible for providing fire and EMS service to Tierra Verde this year when it outbid St. Petersburg and St. Pete Beach for the service contract. St. Petersburg had long provided service and had said it would take the fire engine when it left the island.

The 1996 vehicle had about 73,000 miles on it. It was valued at about $32,000 and St. Petersburg paid about 60 percent of that to Tierra Verde under terms of that city's contract with the island. Without a fire truck, the island has been using an older one on loan from Lealman. Tierra Verde averages about 2.5 calls per 24-hour shift.

Graham said he met with island residents and found they wanted a ladder truck, which will cost an estimated $626,000 to $700,000. Tierra Verde's vehicle account, however, has only $537,000, not including the payment from St. Petersburg for the old vehicle. The island would have to borrow the remainder of the money to afford the truck.

The Lealman fire district and the Tierra Verde Community Association reached a bargain: Tierra Verde will use about $420,000 of its funds as a down payment on a brand new truck. Lealman will lend Tierra Verde the remainder, up to $250,000 at an interest rate of 2 percent or less. Tierra Verde would assess each property owner $60 a year for two years to repay the loan.

Paul Murray, Tierra Verde Community Association president, has asked the County Commission, which oversees fire/EMS service on the island, to approve the deal. The item is expected to come before the commission at its Jan. 5 meeting.

Lealman willing to loan Tierra Verde money for fire truck 12/19/09 [Last modified: Saturday, December 19, 2009 3:31am]

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