By Dianne Stallings
The Ruidoso News
RUIDOSO, N.M. — The unexpected bankruptcy of a company involved in the manufacturing and assembling of three refurbished fire trucks for Ruidoso prompted the Village Council to approve some contract changes.
At the council meeting late last month, Fire Chief Tom Gavin explained the situation and that delivery on the trucks will take nine more months. Specifications already were approved by the State Fire Marshal for use of Fire Fund dollars, and cannot be changed without re-starting the entire process.
Councilors approved an extension of the contract for $1,142,000 between the village and Fire Trucks Plus Inc. of Rancho Cucamonga, Calif., for the purchase of a 75 foot aerial engine and two Class A pumpers.
The contract was required because of a Chapter 11 bankruptcy declared by Wolverine Fire Apparatus, the manufacturer originally contracted in 2009 to build the apparatus. The Spartan chassis also did not meet 2010 emission standards.
“No one saw the bankruptcy coming,” Gavin said. “The company has built 400 trucks and been in business 30 years. They still plan on coming out of Chapter 11, but we don’t have the time to wait.” The company’s assets (including 22 trucks on order for various clients) are tied up in the bankruptcy court, but Paul Batista of Fire Trucks Plus, who also had trucks at Wolverine, is willing to finish the village’s trucks, Gavin said. “I’m confident he can do it and he’s provided interim apparatus for us to use. He even would send more.”
Councilor Angel Shaw said working out a solution showed initiative on Gavin’s part. Mayor Ray Alborn said he and Village Manager Debi Lee were relieved to learn the village was fully protected until the new equipment arrives.
“And this doesn’t change the financial picture at all,” Shaw added. Gavin said Batista sold one village truck for $135,000, and can either send the money back or leave it in place to help him finish the refurbished trucks with the appropriate deduction from the price.
“I’m very concerned about all the money laid out and he took our trucks with 22,000 miles on them that we hadn’t paid for yet and now we have to wait nine more months,” said Councilor Jim Stoddard. “Did he post a performance bond for delivery?”
Village Attorney Dan Bryant said a performance bond was not required in the original contract, but the village could go back and try to negotiate a bond.
“How could Batista sell our trucks, if they weren’t paid for,” Councilor Don Williams asked.
Batista took the 2004 trucks in which the village had some equity and marketed them to clear an amount in excess of the money owed to pay the debt, Bryant said. “At the end of the day, we will have three refurbished trucks and have a loan,” the attorney said.
Gavin clarified that Batista fronted the village the money to pay the debt based on what he thought he could sell the former village trucks for, because the first loan had to be paid off before the state would approve a new loan. The previous trucks did not perform well in Ruidoso’s mountainous terrain and tight turn-arounds, and could not carry enough personnel, the fire chief said. The ladder truck was cited for 36 major defects. Correcting them would have cost more than buying another engine.
Why sell new trucks for refurbished older models, and leave the village unprotected, Councilor Gloria Sayers asked.
“New doesn’t necessarily mean better,” Gavin replied. “We never have been unprotected. We have $420,000 of their equipment at no cost to the village.”
“If they are adequate, why not keep them?” Sayers asked.
Gavin said the New Mexico State Finance Authority office won’t loan on models older than 10 years.
Sayers asked why the purchase of the refurbished trucks wasn’t staggered, and Gavin said one truck was retained, a refurbished 1995 in use today. “We still have trucks running that were purchased before I was hired,” Gavin said.
Sayers asked why a company wasn’t selected in Albuquerque or somewhere closer than California for servicing convenience. Gavin said companies in El Paso and Albuquerque will service the units, as they do village grapple trucks and Street Department equipment. Sayers said she prefers to see New Mexico businesses used.
Gavin said he’s worked hard in the past to find New Mexico companies to buy older trucks and sell the village newer ones, but “they wouldn’t give us anything,” for the older equipment. “I gave up after several months. I was convinced it couldn’t happen with the money the village had to spend,” he said. “I walked away for four or five months. Batista approach-ed me and the numbers added up. We did it on a Texas state contract that is used a lot in New Mexico and was competitively priced. About $90,000 is the most we can afford in Ruidoso. I’m to the point I just want to get these trucks built.”
Sayers asked why she just heard about the situation in October, when the bankruptcy apparently occurred in April.
“As soon as I read about it, I went to (Lee) and we talked to Paul and he said don’t panic, they will deliver on time,” Gavin related. “Two months ago, (Batista) said (Wolverine) might come out (of bankruptcy), but he’s not on our time line. Paul hired the Wolverine engineers who were building the trucks.”
Apparently still dissatisfied with the answers she received, Sayers ended up casting the lone vote against the successful motion to approve offered by Shaw.
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