SALISBURY — The Salisbury City Council formally approved the financing of the upcoming Fire Station 3 at 150 Mahaley Avenue with JP Morgan at the agreed upon terms for a loan amount of $6.5 million with a 15-year-term at a rate of 3.29 percent during the Tuesday night meeting. These terms provide Salisbury prepayment flexibility in case interest rates change or if the city decides to pay off some of the loan earlier than expected.

The council also adopted an ordinance for a capital project fund to account for the fire station’s multiple sources of funding. The $6.5 million will come from the JP Morgan loan, $1 million will come from ARPA funds, and $1.6 million will come from the city’s fund balance. Finance Director Wade Furches said this is necessary so that funding is “transparent” and that it keeps with policy standards.

Council approved the request to finance the new Salisbury Fire Department’s $1 million fire engine with money from fund balance instead of refinancing the cost. Salisbury ordered the engine a couple years ago and it was finally delivered last month. Back then, the city only had around $3 million in available excess fund balance. Now that the excess fund balance is roughly $10 million, Furches requested to council to use that instead of refinancing the truck and incurring interest. This would save the city $60,000-$100,000 in interest payments. The $1 million would be part of the current budget and not the upcoming one.

“The truck has been paid for. It was paid for out of our capital reserve fund. So now we’re going to move fund balance from the general fund to the capital reserve fund to pay the reserve fund back,” Furches said.

Furches says they will close financing for the fire station on June 13 and that the construction contract will be approved on June 20. Salisbury Fire Department Chief Bob Parnell says that construction for the station will start in the fall.