Department working with bank after defaulting on truck loan
Jeffrey Alderton Cumberland Times-News The Cumberland Times-News Thu Apr 07, 2011, 11:56 PM EDT
MCCOOLE — The threat of foreclosure may be looming, but that doesn’t mean the McCoole Volunteer Fire and Rescue Department has lost sight of its mission of public service or that the department is going out of business anytime soon.
The membership met Tuesday night and came to a decision about the matter.
“The department voted last night to take steps to stay open and if that means liquidating some assets, that’s what we will do,” Chief Charles E. Pearce Jr. said on Wednesday.
The department fell behind in making payments on its note with Marquette Bank in Cook County, Ill. The bank filed suit in U.S. District Court in Baltimore to foreclose on the note. The fire department was served court papers Thursday evening, Pearce said.
The department has not yet retained an attorney but that is being considered.
The fire department reportedly defaulted on quarterly payments of $13,000 on a loan of $624,000, according to The Baltimore Sun.
Pearce said that he spent a half-hour on the phone Wednesday morning talking with a bank official to work out a resolution.
“We are working this out with the bank and their attorney to bring this to a quiet resolution that is agreeable to us and to the bank. We were caught off guard by this and didn’t know anything had been filed with the court until we got a call from the The (Baltimore) Sun last Thursday,” said Pearce.
Efforts by the Times-News to obtain comment from Marquette Bank were unsuccessful.
Pearce said the fire department is under financial strain for several reasons — revenue has dropped markedly in recent years, calls for service have increased and the cost of doing business keeps going up.
The department’s main source of revenue from its weekly bingo games has taken an unexpected nose dive. Sunday-night bingo at the fire department ended in February because the number of players was in the low 50s. Payouts, he said, are based on attendance. Low turnout of players can’t produce payouts that make the games worthwhile for the players — or for the fire department.
In 2000, the department took in $270,000 in bingo revenue. In 2004, when the note was taken out with Marquette Bank, where two payments are now due, the bingo revenue was $260,551. The bingo revenue last year totaled $121,532.
“We had nine straight years of increasing revenue before the loan and five or six straight years of declining revenue after the loan,” said Pearce.
Allegany County commissioners have also become concerned about the situation at the McCoole department after reading press reports about the lawsuit against the department, said County Administrator David Eberly.
Commissioners asked Richard L. DeVore, the county’s Acting Division Chief of the Emergency Management Division, to have the county’s emergency services board to look into the situation and report back to commissioners. Among other duties, the board coordinates the county’s volunteer fire departments.
“We receive 2 1/2 percent as our share of the county money and that’s never much more than enough to pay our insurance and our electric bill. Cumberland gets 18 percent for its share,” Pearce said.
“We’ve complained about this to the Allegany County Emergency Services Board for years that it is not equitable. We don’t get money from a fire and ambulance tax and we think that is an unfair practice. We tried to get one in our district in 1994 and the (county) commissioners said they didn’t want to increase taxes. There are seven districts in the county that get fire and ambulance tax revenue.
“In the early 1980s we sent out fundraiser letters, but once bingo took off we ended that,” said Pearce.
The McCoole Volunteer Fire and Rescue Department logged 374 fire calls and 485 ambulance calls in 2010, compared to 358 fire calls and 400 ambulance calls in 2009, and 384 fire calls and 226 ambulance calls in 2008.
As of Wednesday, the department had answered 86 calls for fire service and 119 ambulance calls this year, Pearce said.
“We’re here to provide fire and EMS service,” said Pearce, one of 15 to 20 “core” members who responds to calls among some three dozen active members.
“The economy is the economy. I don’t thing people realize how the economy works. If the price of gas keeps going up, 2011 will be worse than 2010,” said Pearce. “The bank hasn’t served us with foreclosure notice and I don’t think they plan to. We’re working with them and they are working with us. It’s a win-win if we can all work together.”
The department’s assets include its station, a rescue truck bought in 2006 with the loan that is now in default at a cost of $388,000 and an additional $140,000 for equipment; a fire engine from 1999 that cost $349,000; a brush truck bought in 2004 for $98,000; and a 1994 ambulance purchased in 2010 for $10,000, Pearce said.
A second engine was returned when the department fell behind in the payments.
Pearce said all of the purchases of equipment were made to replace outdated apparatus.
The chief also said the purchases were made by a vote of the membership during the department’s regular meetings with a quorum of seven voting members, including two elected officers.
Contact Jeffrey Alderton at jlalderton@times-news.com .
Copyright 2011 Cumberland Times-News. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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