Wednesday, July 23, 2014

Is a donation run fire department an extinct species?

Has the cost of running a safe and modern fire department outgrown a donation funded department?

I'm talking about a department that receives 100% of its income from donations or fundraisers without any government support.

Let's do some math

We've looked at the financial statements from thousands of our customers over the past few years and have some interesting facts.  We've eliminated career departments serving large cities to get a clear picture of small rural departments.

The average fundraiser earns about $4,000 after the costs are subtracted (cost of food, bingo expenses, etc.).   Departments must run 10 fundraisers to have $40,000 in income per year, or about 1 per month.

Average insurance premiums are $13,000 for a comprehensive department policy.

An average new fire truck costs $350,000 which is a $40,000 payment for a typical finance term.

The average department spends $3,500 per year in training and $5,000 in utilities & fuel.

Equipping a fire fighter costs $9,500.

Summary

If your donation run department has a fundraiser per month, they will spend about 1/3 on insurance and another 1/3 for basic operating expenses and equipping 1 new fire fighter.

The department would be able to afford only a fraction of a new truck payment.

The traditional funding model of relying only on fundraisers & donations is inadequate for a modern fire department.

Every fire department must prove its economic worth to the local government officials who have historically received fire fighting services for free.


Stay safe!
John R. Hill
President
First Bankers

Wednesday, July 16, 2014

Fire Truck Leasing: The 1 unasked question

Last week, I shared the question that departments don't ask.  Today, I'll share the question that bankers won't ask you.


And that question is:

 What do you expect to happen while you are paying off this truck?

What happens when this question is asked?


Financing is a 4 part balancing act.  First, today's payment budget is balanced against the future financing cost (for example, the longer you finance has a lower payment but costs a lot more).  Also, today's needs are balanced against the future purchases (is the current truck paid off when we need to buy the next truck?)

When the question is asked, you can get advice how to balance all these competing forces.

Summary

If the question is unasked, you may do something today that hurts you later.  If your banker doesn't ask, ask yourself and share with your banker.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, July 9, 2014

Fire Truck Leasing: How to get the best results

Everyone who calls asks the wrong questions for the goal they have.

The goal for everyone is:

How can I pay the least amount to finance the fire truck given my budget?

 So, how to get the answer to the real question?


Our typical community pays almost 1/5 less than what they would pay if we hadn't helped.  We provide the knowledge to save lots of money.  And we show communities exactly how they save.

Summary

If you want the best results, start by asking the real question you have.  Don't ask the 3 questions the banking world has taught you to ask.  Those questions only help the banks.

Stay safe!
John R. Hill
President
First Bankers

Wednesday, July 2, 2014

Happy Birthday America!

I happen to believe the United States is the greatest country ever.  Our principles are based upon unparallelled individual liberties, godly responsibilities toward each other, and a optimistic viewpoint of all human beings.

I thought it's time to share some inspiring quotes about liberty and freedom.

"Our greatest happiness does not depend on the condition of life in which chance has placed us, but is always the result of a good conscience, good health, occupation and freedom in all just pursuits."
 Thomas Jefferson


 "Everything that is really great and inspiring is created by the individual who can labor in freedom."
 Albert Einstein


"Those who won our independence believed liberty to be the secret of happiness and courage to be the secret of liberty."
 Louis D. Brandeis


 “Freedom is nothing else but a chance to be better.”
 Albert Camus



Stay safe!

John R. Hill
President
First Bankers