The Upper Darby Council voted unanimously by resolution to spend more than $900,000 for a five-year lease agreement to purchase new breathing apparatus for the township’s firefighters.

“This is something my [fire] department needs. This is something that can make or break the township,” said Council President Hafiz Tunis before the Dec. 17 vote.

Not so fast, say some concerned residents who cite the township’s Home Rule Charter that says borrowing must be approved through an ordinance, not a resolution.

“The Charter provides no exception for lease-purchase agreements, equipment leases, or bank-qualified financings,” resident John DeMasi told Broad + Liberty. “Approval of this agreement by resolution therefore fails to comply with the mandatory procedural requirements of the Charter and renders the authorization legally defective.”

He asks that the council rescind the resolution and pass the lease again via an ordinance. Otherwise, the residents plan to file a complaint with the state Department of Community and Economic Development, the agency that took control of the City of Chester’s finances from local officials. 

In a discussion of the lease through Community First National Bank, Diane Scutti with the Upper Darby finance department, said the township will pay a $100,000 downpayment, bringing the total cost with financing to $944,616.  

“I suspect in future years, it would be through bond funding,” she said, noting the township may need to float a bond soon. However, Upper Darby no longer has a credit rating, she admitted when questioned by Councilwoman Laura Wentz.

“It’s very sketchy and I’m very concerned about it,” said Wentz.

“I’m a little confused as to why this is a resolution and not an ordinance,” said Councilman Matt Silva. “I’m a little apprehensive about this. It creates a wiggle room. You’re saying the cash is currently on hand, and so it’s OK to do it this way?” 

Scuitti said that the township had the money for the $100,000 downpayment and the first-year lease payment of $168,000 in the unrestricted capital reserve fund.

Township Solicitor Michael Clarke said, “It’s clear the township is not pledging its taxing authority to make these payments. They are secured by the equipment itself.” The lease obligations are considered “operating expenses.”

Clarke also noted that his firm had studied the lease agreement and he opined that the council could approve via resolution, rather than an ordinance. He read part of the contact with the bank. 

“The lease we are entering into, we are not committing the general revenue taxing authority,” he said. “When you go out and borrow money you are committing the taxing authority to pay back that money…That’s not what we’re doing. The collateral, if we don’t pay on it, they can’t force us to use tax money to pay for it. We would just default on the lease.”

DeMasi disagreed.

“All the township has to do is properly pass an ordinance that allows them to borrow money, as the Home Rule Charter clearly states,” he said. “An ordinance, as required by the Home Rule Charter, requires the public to have a voice in the borrowing of money by their township.”

“The township has decided to take an action that is a risk to the firefighters and declare that signing a document that has an amortization schedule, the payment of principal and interest does not constitute borrowing money, and therefore the people do not have a voice and they will risk losing the equipment for the firefighters,” he added.

Tunis did not respond to requests to comment on DeMasi’s criticism. 

In the meantime, the firefighters’ union filed a lawsuit against the township to mandate it comply with open records requests regarding fire department financing. That lawsuit remains pending in Common Pleas Court. 

Linda Stein is a Philadelphia-area journalist.