PRESQUE ISLE – City councilors decided how to finance the purchase of a new $757,000 ladder truck for the city’s Fire Department during a special meeting last week, according to a city official, saving $25,000 in the bargain, but are not expected to approve financing until they review the matter at their meeting tonight, said Spike Savage, the city’s finance director.

In February, Fire Chief Jim Krysiak explained to the council the need for the new truck. The aging ladder truck the Fire Department now has is rusting in places. Fire officials estimate the truck may be worth $15,000.

Krysiak said the city received a bid for a replacement truck from Pierce Manufacturing Inc. of Appleton, Wis. With a 105-foot ladder, a stainless steel body that will not rust and a pump that can handle 1,500 gallons of water per minute, Krysiak said, the truck would suit the city’s needs perfectly.

The city has 30 days from the Feb. 22 bid opening to sign a contract with Pierce. A stipulation within the bid allows the city to save $25,800 of the total cost if officials pay for the equipment within 10 days of the contract execution.

City officials wrestled last month with whether councilors wanted to realize the $25,000 savings and, if so, how the city would gather the remaining $731,000 for the purchase within the next month.

Savage proposed that the city finance $300,000 with a loan and pay the balance through city accounts, including $130,000 from a Fire Department reserve account and $300,000 from the city’s surplus account.

Savage suggested that if the council decided to seek a seven-year, $300,000 loan, the city would have a $48,000 annual payment. He said the payment could be made with money already set aside annually in the Fire Department reserve account to pay for the new truck.

The council opted during its special meeting to seek financing with a local bank. Savage said Friday that the seven-year loan would have a 4.4 percent interest rate.

The finance director said that if the purchase is approved, the city will make a first payment of $65,000 on the loan and that annual payments after that will be about $48,000. Money from the sale of the old ladder truck would be used to make the first payment, he said.

If the loan and the bid were approved this month, the Fire Department would receive the new truck in October.