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    Default sale of grant funded equipment

    how long do you need to keep equipment, such as trucks, packs, etc, purchased under a afg grant. i could not find anything in my award paper work that addressed this.
    Last edited by derf24; 12-14-2007 at 09:19 PM.

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    Default what no replies

    202 people viewed this and no on has an thought

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    Quote Originally Posted by derf24 View Post
    how long do you need to keep equipment, such as trucks, packs, etc, purchased under a afg grant. i could not find anything in my award paper work that addressed this.
    After reviewing a number of documents; found nothing that specifically addressed your question. IMO; you need to maintain that equipment/ apparatus for the useful life of the equipment/apparatus, unless it's destroyed through an accident or you replace the existing equipment with new.

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    Red face What to do?

    If I read this right that you are at the end of the useful cycle of the equipment? If so then it is no good to any one else. This is my views on the question. If we have recieve new equipmet to replace equipment got from a grant, we GIVE that old equipment to a needing department. The way I look at it I got it for free, got replacment for free so let if serve somebody else till no longer usefull. If had to replace the equipment out of my own pocket that is a another story.

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    We have a fire department close by that got a fire safety trailer - and they are trying to get nearly 20 times their match and sell it. (I believe
    it was a 5% match, but it could have been 10, still quite a profit)

    My personal feeling is that while it may be legal, it is despicable. Get back what you have in it perhaps, but a profit? That is just not right.

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    You can probably sell/give away BUT I would not be asking for anything else. If it was AFG, I do not think it has be going long enough to be replacing any equipment. BUT, I have been known to be wrong before.

    T.J.

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    Quote Originally Posted by derf24 View Post
    how long do you need to keep equipment, such as trucks, packs, etc, purchased under a afg grant. i could not find anything in my award paper work that addressed this.
    If I were you I would direct that question straight to Tom Harrington at AFG in Wash DC.
    Kurt Bradley
    Fire/EMS/EMA Grant Consultant
    " Never Trade Skill for Luck"

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    For any one with an award, the Agreement Articles of your award states the following about giving assets away.


    Article III - Period of Performance

    The grantee cannot transfer funds or assets purchased with grant funds to other agencies or departments without prior written approval from DHS.

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    Quote Originally Posted by onebugle View Post
    For any one with an award, the Agreement Articles of your award states the following about giving assets away.


    Article III - Period of Performance
    AH yes onebugle saw that too however, notice what section it is under "Period of Performance". I dare say that is only the one year PoP but, perhaps I am mistaken. That's why I referred him to Tom Harrington. Curios to know myself.
    Kurt Bradley
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    Quote Originally Posted by ktb9780 View Post
    Curios to know myself.
    I'm kind of curious on this topic as well. We had a department that closed it's doors that's nearby us (we took about 2/3 of their area). They sold the equipment from a grant they got a couple of years ago for next to nothing (unused SCBA for $300 as an example). I've been curious since that time if they could do that or not.

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    If the department ceases to exist then that's different. Otherwise everything awarded since 2005 has to stay in operation with the awarded organization until it falls apart or is deemed out of service per NFPA or OSHA. Trucks have to be kept for at least 20, SCBA 15, PPE until it falls apart, etc, etc, etc.

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    Default more on the sale of equipemnt

    Now here is a bee for the bonnet. The feds are citing 44CFR13.32(c)
    (c) Use. (1) Equipment shall be used by the grantee or subgrantee in the program or project for which it was acquired as long as needed, whether or not the project or program continues to be supported by Federal funds. When no longer needed for the original program or project, the equipment may be used in other activities currently or previously supported by a Federal agency.
    (2) The grantee or subgrantee shall also make equipment available for use on other projects or programs currently or previously supported by the Federal Government, providing such use will not interfere with the work on the projects or program for which it was originally acquired. First preference for other use shall be given to other programs or projects supported by the awarding agency. User fees should be considered if appropriate.
    (3) Notwithstanding the encouragement in Sec. 13.25(a) to earn program income, the grantee or subgrantee must not use equipment acquired with grant funds to provide services for a fee to compete unfairly with private companies that provide equivalent services, unless specifically permitted or contemplated by Federal statute.
    (4) When acquiring replacement equipment, the grantee or subgrantee may use the equipment to be replaced as a trade-in or sell the property and use the proceeds to offset the cost of the replacement property, subject to the approval of the awarding agency.
    I am hearing that the AGENCY will not approve such a sale even if the proceeds are used to replace the existing vehicle with a like kind or type.
    Last edited by derf24; 12-14-2007 at 09:21 PM.

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    Thumbs down wow, may be a free truck is not so great.

    Ok, try this on for size. If its true, that you must turn equipment back into the feds when you are done then there are a few issues about to surface real soon keep in mind this grant program started din 2001.

    1. Where do the feds plan to store thousands of sets of bunker eager that has worn out?
    2. What are they going to do with all fire engines that people are not going to put money into? What no investing in the engine up keep. NOPE< not if when I want to get a new engine I do not get any residual value out of the one I have. Better to let the wheels fall off and keep money in the bank.
    3. A small department who gets a grant for a new engine does not necessarily ever get truly out of the hole. Follow this logic. Simply put with no re-sale value in the unit, the department will never get ahead. Many departments looked at the grant as the means to save money they were paying in repairs and loans, then some where down the road have a value in the equipment that could be coupled with their savings to buy another piece. If it has to go back, then these little people will never truly get out of the hole. All the grant did was delay the pain for a few years.

    I expect that the majority of the departments out there only saw the three-year performance periods for recordkeeping and never ever were advised that 44CFR13.32 applied. Even more so that the feds would deny them the chance to take the original funding and use it to keep them selves a float going forward. Seems like the best application of a grant award is in the attempt to bring a department up to current standards and set the stage for them to remain there. If the equipment is not truly the departments, then at the end of the “lease” they are still broke.

    If you use the logic of give it back, then what if you wreck it. Do you give the insurance settlement to the feds?

    I sure hope Congress looks at this and soon.

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    did anyone else ever read title 44

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    Once when I couldn't sleep....

    Basically the program that all awards from AFG are given is 'fire protection' so as long as the department is in business fighting fire, can't get rid of it. Had a friend's VFD in FL operating in a paid county win one. County kept trying to take the stuff but since VFD was a separate agency DHS said it has to stay with the VFD even though technically same department. So the county closed them. At that point protection for that area went to the county so they could take the stuff.

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    I expect that the majority of the departments out there only saw the three-year performance periods for recordkeeping and never ever were advised that 44CFR13.32 applied. Even more so that the feds would deny them the chance to take the original funding and use it to keep them selves a float going forward. Seems like the best application of a grant award is in the attempt to bring a department up to current standards and set the stage for them to remain there. If the equipment is not truly the departments, then at the end of the “lease” they are still broke.

    If you use the logic of give it back, then what if you wreck it. Do you give the insurance settlement to the feds?

    I sure hope Congress looks at this and soon.

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    While searching for answers. I found this in a brand X chat room.
    Hey folks, look at the fire house forums. Some one posted a question about selling a fema grant truck briefly the feds have drawn a line in the sand and said no it must be returned. THEREFORE, here is a twist for you.
    Ok, try this on for size.

    If it’s true, that you must turn equipment and vehicles back into the feds when you are done then there are a few issues about to surface real soon. Keeping in mind this grant program started in 2001.
    1. Where do the feds plan to store thousands of sets of bunker eager that has worn out?
    2. What are they going to do with all fire engines that people are not going to put money into? What no investing in the engine up keep. NOPE< not if when I want to get a new engine I do not get any residual value out of the one I have. Better to let the wheels fall off and keep money in the bank.
    3. A small department who gets a grant for a new engine does not necessarily ever get truly out of the hole. Follow this logic. Simply put with no re-sale value in the unit, the department will never get ahead. Many departments looked at the grant as the means to save money they were paying in repairs and loans, then some where down the road have a value in the equipment that could be coupled with their savings to buy another piece. If it has to go back, then these little people will never truly get out of the hole. All the grant did was delay the pain for a few years.

    I expect that the majority of the departments out there only saw the three-year performance periods for recordkeeping and never ever were advised that 44CFR13.32 applied. Even more so that the feds would deny them the chance to take the original funding and use it to keep them selves a float going forward. Seems like the best application of a grant award is in the attempt to bring a department up to current standards and set the stage for them to remain there. If the equipment is not truly the departments, then at the end of the “lease” they are still broke.

    If you use the logic of give it back, then what if you wreck it. Do you give the insurance settlement to the feds?

    I sure hope Congress looks at this and soon.

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    Things with trade-in value will be fine when the useful life is over. Gear has a minimum of 5 years, SCBA 15, trucks 20-25. So no one that has ever been awarded by AFG has to worry about this yet since it has only been 6 years since the first ones were given out. So PPE from 2001 is technically out of useful life at more than 5 years old, but nothing else purchased is.

    The spirit of the program is that the departments use the stuff until it is no good or life expectancy is reached. If the latter happens (ie truck turns 20 y/o) and there is residual value then it can be traded in.

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    BC79, 25 years. Hmm NFPA does not provide any mandatory retirement age for apparatus. NFPA 1911, Standard for the Inspection, Maintenance, Testing, and Retirement of In-Service Automotive Fire Apparatus. What is says is "5.1* General.

    5.1.1 The fire department shall consider safety as the primary concern in the retirement of apparatus.

    5.1.2 Retired fire apparatus shall not be used for emergency operations. "
    The non-mandatory annex for 5.1 offers "A.5.1 Unsafe fire apparatus pose severe safety risks to fire fighters and the general public. These risks result in death, severe injury, and property loss. These risks are particularly prevalent in older apparatus. See Annex D for safety criteria on older apparatus. "

    The referenced Annex D also makes non-mandatory remarks concerning age,including:
    "It is a generally accepted fact that fire apparatus, like all types of mechanical devices, have a finite life. The length of that life depends on many factors, including vehicle mileage and engine hours, quality of the preventative maintenance program, quality of the driver training program, whether the fire apparatus was used within the design parameters, whether the apparatus was manufactured on a custom or commercial chassis, quality of workmanship by the original manufacturer, quality of the components used, and availability of replacement parts, to name a few. In the fire service, there are fire apparatus with 8 to 10 years of service that are simply worn out. There are also fire apparatus that were manufactured with quality components, that have had excellent maintenance, and that have responded to a minimum number of incidents that are still in serviceable condition after 20 years. Most would agree that the care of fire apparatus while being used and the quality and timeliness of maintenance are perhaps the most significant factors in determining how well a fire apparatus ages."
    Last edited by derf24; 12-14-2007 at 09:24 PM.

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    It's a ballpark for the average department. Considering that many departments getting new truck awards made the one their replacing last 30+ years, 20 years in service is not outside the realm of realism for the AVERAGE fire department. I know departments with 5 year old trucks that are beat by 10k+ runs a year. I also know some with 25 year old trucks that run just like they did the day they were delivered and look the same. But the 10k runs/year departments are not really getting vehicle awards anyway. Plus, since 2001 was the first truck award we still have 4 years to go before anyone that got a truck can even come close to claiming they need to trade it in for the next one. Especially since most have only won one truck and have older ones that need replacing more than the new grant one, so back in the real world there is no reason anyone should be trading in for the next truck already.

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    True, but no matter what when they want to move eon they are back where they began. Simply put they never get out of the hole. Let us say a department had an engine that they were maintaining at a cost of $7,000 per year and it was worn out. They were also saving 413,000 per year to but a new engine. Therefore, in 2001 they hit an award for $300,000. They take the $30,000 they have in the bank and make there fair share 10% payment.

    Ok the smart departments then immediately establish a capital fund to accrue money for the next engine. So $20,000 each year is being saved ($7,000 and $13,000). Enter 2008. The engine they were awarded is 7years old. They should have $100,000 in the bank (deposits plus interest). Therefore, they now have grown in size and are looking at the future. Here is where I think the feds are missing the boat big time. The department wants to get into an engine that meets the current mission. Keep in mind the one they have is 7 year sold and if they are in the rust belt it’s getting time to look for a new one. THEREFORE, they price a new engine with sustainably similar equipment, size, etc. Now they are not trying to dump, engine, and buy a ladder. Just upgrade to a ewer engine (2007). The price tag on the new ride is $375,000. Therefore, they find two or three fire departments that would love to get into their old engine say at $250,000. Where as this department put $13,000 into the engine at the start and has maintained it for 7 years, they say ok. In addition, they sell the old engine and but the new one. Using the $100,000 they had and floating a lone for. $25,000.

    What has the original grant done? The grant has ensured that the department could save money to keep the momentum from the grant moving forward for years to come. If they keep the second engine 7 years, then the total was 14 years. Very close to the age, you propose. IN ADDITION, the other department gets a few years out of the old engine. THE CITIZENS PROFIT.

    Now FEMA's idea is turn the equipment in when it is worn-out. SO use the 15 years that is the actual statistical average life of a fire engine, keeping in mind the reason most keep the equipment 15 years is not usability but cost of replacement. At the 10-year mark, the department would have had increased service costs. So they would have saved in the first 10 years $200,000. In the next 5 years due to the increase in maintenance, they would only save $65,000 (13,000 times 5 years). For a total value at the end of 15 years of $265,000.
    Now FEMA says give it back so the department now has $265,000 to spend on a new engine at a price of ? Even if the inflation rate stopped and the engine was still $375,000, they are $110,000 short. Therefore, they try to float a loan. However, the loan value for 10 years pay off exceeds the $13,000 they can pay. Thus, they go 15 years and slowly slide backwards to where they were the year before the grant.

    They financial aspect of this is very straightforward. The reason most departments are running old equipment is not the usable life of the equipment. It is that they can never get enough retained income to afford an upgrade in a timely fashion. Coupled with the increased in fire apparatus due to the emissions standard changes the new fire engines are priced above any reasonable retention rate for a department. Most departments end up doing a back slide similar to what has happened in the housing market and car market. People but the personal auto, the payments are so high they need to string the term out. As the term is extended, the resale value of the equipment drops. When the car is paid off it has no value and the owner has no cash, so we but another one on a extend payment plan and so on goes the story. Look what that process has done to the housing market.

    It fairly simple. If the grant program is to truly help departments gain solid fiscal footing, it need sot allow for timely re-sale and re-investment of residual toward sustained services. There can be limits, perhaps it need sot be a 7-year window and that documentation must be presented to show that ALL sale assets were applied to the new unit. Otherwise, at the end of 15 years the department is right back where they were. That6s not helping the fire service. That is creating a false sense of accomplishment for a short term and setting the stage for a long-term failure of the system.
    Last edited by derf24; 12-14-2007 at 09:26 PM.

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    Except that grants are a one-time boost for a financial condition, not the way to continually finance a fire department, or any public safety agency. Local funding is the priority, regardless of how it happens. After all AFG is only in existence until 2010 unless Congress renews it.

    And your example is a little off. You're talking about 1 truck from 1 grant award and continually trading it in. What about the other 1-6 trucks the department may have? Sure the grant is theoretically keeping someone in a 7 year old truck but the rest of the fleet has to be replaced using local funds not grant money.

    Also you're assuming that people can purchase used trucks. Some areas it is against the law of the local municipality to purchase used equipment, so it isn't even an option for many, many departments. State and Federal governments can't buy used equipment because everything has an established and expected useful lifetime so the cost-benefit equation points to new purchases only.

    Besides the fact you'll be hard-pressed to show me a 7 year old pumper that is unsafe to operate if it was properly cared for. Or doesn't meet the current mission. Pump water, move firefighters, hold equipment. The mission hasn't changed since motorized apparatus appeared. Some people just have the need for shiny and new. Same reason the housing market is tanking, people couldn't wait until they really could afford to buy the house so they bought too much, got foreclosed on, and now won't own another one ever again. Cars are the same way. People buy more than they should for no real reason at all.

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    Quote Originally Posted by derf24 View Post

    If it’s true, that you must turn equipment and vehicles back into the feds when you are done then there are a few issues about to surface real soon. Keeping in mind this grant program started in 2001.
    1. Where do the feds plan to store thousands of sets of bunker eager that has worn out?
    2. What are they going to do with all fire engines that people are not going to put money into? What no investing in the engine up keep. NOPE< not if when I want to get a new engine I do not get any residual value out of the one I have. Better to let the wheels fall off and keep money in the bank.
    3. A small department who gets a grant for a new engine does not necessarily ever get truly out of the hole. Follow this logic. Simply put with no re-sale value in the unit, the department will never get ahead. Many departments looked at the grant as the means to save money they were paying in repairs and loans, then some where down the road have a value in the equipment that could be coupled with their savings to buy another piece. If it has to go back, then these little people will never truly get out of the hole. All the grant did was delay the pain for a few years.

    I expect that the majority of the departments out there only saw the three-year performance periods for recordkeeping and never ever were advised that 44CFR13.32 applied. Even more so that the feds would deny them the chance to take the original funding and use it to keep them selves a float going forward. Seems like the best application of a grant award is in the attempt to bring a department up to current standards and set the stage for them to remain there. If the equipment is not truly the departments, then at the end of the “lease” they are still broke.

    If you use the logic of give it back, then what if you wreck it. Do you give the insurance settlement to the feds?

    I sure hope Congress looks at this and soon.

    I know that I am not talking for everyone, but, when we were fortunate enough to recieve our grants and especially the one for the engine, we never had any intention of gettting rid of it. We still do not have any intention and we will have this truck for just as long the trucks it replaced (30 and 40 years old).

    These grants have allowed us to catch up (because we were severly underfunded for many years at $5,000. 00 per year) on trucks and equipment.
    Eight years prior to our first grant we organized a fire district and became tax based. This was the first step of our recovery, since then we have asked for and got an additional tax increase which makes us the highest tax rate for a fire district in our county and for several surronding counties. We also have been able to obtain one of the best ISO ratings around..

    Even with us becoming tax based and starting to work with a better budget, we were so far behind on equipment and trucks that it would have taken us a minimum of 20 years to purchase a newer truck (due to needing the basic equipment as well, PPE, SCBA, etc.) This would have put our first line trucks at 50 and 60 years old.

    With these grants we have now been able to establish a capital improvement budget, although small. We anticipate that once we pay off our building loan that we will be able to then start saving for our next truck.

    In my opinion these grants have put us at a level where we can maintain our own needs (for the awarded items) in the future. Does this mean we will not be going back to our customers and asking for another tax increase? Absolutely not, were hoping that we can get one passed within the next few years ..

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    Also DHS doesn't want the AFG equipment when it wears out. That clause is there to keep people from selling stuff won in a grant just to take the money and do something grant programs wouldn't buy.

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    Default Small Departments

    What about a small department that may only have one piece. The mission of the vehicle could change. Say a department was given a rescue pumper and another mutual aid pumper downsized an engine and the first company was required to perform more functions.

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