Stimulus Benefits Robbins
Thanks to federal stimulus money, Robbins could be building its first-ever firehouse by Christmas.
The U.S. Department of Agriculture has offered the town a combined grant and loan for the $1.2 million cost, and the board has snapped it up.
“This was a shovel-ready project, just the kind the feds like,” Town Manager George Hayfield said on the morning after commissioners gave their OK to the deal. “We are only a couple of signatures on a sheet of paper away from final approval.”
Robbins never had its own fire station. Years ago, the volunteer fire department remodeled a basement area of the old post office beside the historic Elise depot to make space to store fire engines. For a long time, they have dreamed of a real station. The land, in the middle of town across the tracks from Town Hall, has been sitting vacant and waiting.
A few months back, Hayfield decided that economic conditions would never be better: Stimulus funding was available, construction costs were down, and builders were hungry and making deals.
“Timing was right, with building costs down and the Fire Department with $200,000 in the bank — ready to go,” Hayfield said. “It was a natural. The timing was perfect. Stimulus money was going to go away significantly next year. Typical grant matching, the last time I dealt with USDA? Out of a $2 million loan, we got a $50,000 grant. If this were put off to next year or the year after, the cost to the town could be $400,000 or $500,000 more.”
He got in touch with the USDA — a federal agency he’d dealt with before. He and Allen Hart of the agency’s Rural Development section met and talked over the possibilities.
“I met with Allen four or five months ago,” he said. “I gave him a call and simply told him our interest in getting USDA financing. The balancing act is whether we could do the fire station and a new water plant — but it is difficult to turn down a grant you have at hand versus something you aren’t yet ready to do.”
‘Best of Both Worlds’
Hayfield wrote out an application for the grant/loan funding. It’s something he’s done many times. This was far from the biggest such successful application he’s managed, but it could be one of the most important.
On Thursday afternoon, a special meeting of the Robbins Board of Commissioners heard Hart go over the terms of the deal and voted unanimously to take it. Mayor Theron Bell signed the letter of intent and other required forms. Final approval is pending, but expected.
It puts over a third of the cost of a new fire department facility as free money in the town’s pocket, with the rest provided in a low-cost loan.
“We are proposing to you a loan of $712,450 and a grant in the amount of $367,050 for a total of $1,166,711 to build your station,” Hart said. “Our current interest rate is 4 percent. If we make this loan to you at 4 percent, your rate is locked in at that — with the exception that, between now and the time the station is built, if our rate were to go down, we would give you the benefit of a lower rate. You have kind of the best of both worlds there.”
The loan, like all federal funding, comes with conditions the towns must agree to meet. The money comes from the Recovery Act — often called “stimulus money,” Hart said. All iron, steel and manufactured goods, for example, must be made in the United States. Wage reports must be made.
“Those are provisions of the Recovery Act,” he said. “A little bit more paperwork, but we will work with your staff. I’ve got a person in my office that will make that process as painless as possible.”
Using Every Penny
The loan term is 40 years, a term generally unavailable from commercial lenders. The first payment is due one year from the date of closing. Robbins will get a construction loan commercially, which the USDA loan will take care of when it comes into effect.
“The loan we get from you won’t actually be started until after the Fire Department is completed?” asked Commissioner Terri Holt.
The way it works is that Robbins gets a construction loan to take care of costs while things are being built.
“Then we will take care of that once it is built according to the plans,” Hart told her. “We are going to have a deed of trust and a mortgage on that Fire Department. It is not all my money; but a dollar or two of it is my money, and I take that very seriously.”
Still, Hart wasn’t worried about the risk.
“I’ve never had to repossess a fire department,” he said.
First payments won’t have to be made until a year after the station is finished, probably two budget years away, and will be about $36,000 annually, depending on the final rate. Any savings come out of the grant portion, so Hart encouraged the town and Fire Department to use every penny.
“We don’t know if it would come in under budget, but any savings would come out of the grant money,” Hart said. “My recommendation to you is: Don’t leave any grant money on the table.”
As only $1,500 of the grant/loan budget is set for equipment, construction savings could mean more fire equipment as budget items shift to keep the total the same.
The cost of operation is expected to drop once a new station is in operation, Hayfield said the next morning. The new station is expected to operate more efficiently.
“Our budget for running this station is more than capable for running the old fire station,” Hayfield said. “It is just inefficient. The cost of running a new building will be less. It is just a new, more efficient building.”
Contact John Chappell by e-mail at jfchappell@gmail. com
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