WEST ALEXANDRIA — In March 2016, the Village of West Alexandria voted to approve an income tax levy for the construction of a new Fire and EMS building. This levy is slated to raise $55,000 a year, which has already begun to accumulate.
When originally passed, the plan was to pursue a loan with USDA, but officials found the land was not deeded in the village’s name and the current village solicitor would not permit the application to be submitted. The land was successfully deeded correctly in March of 2017, but interest rates had increased at that point.
According to Fire Chief Jeff Shafer, once the land was deeded, the discussion on money began. It was decided the project would be funded through bonds — $800,000 worth. In December 2017, the $800,000 in bonds was approved by council and plans for construction began.
However, at the very next council meeting, held on Tuesday, Jan. 16, councilman and on-leave Assistant Fire Chief Jeff Hickey presented a motion to reverse that approval. Council approved a motion to draft a resolution rescinding the affirmative decision 4-1, as council member Ray Waldeck was not present during the vote and council member Jerry Carter voted against the motion.
Council then had to wait for the resolution to be drafted. A special meeting was called for Tuesday, April 3 to discuss the Fire and EMS building construction. Shafer brought in Chris Wiedner with the WDC Group to talk about the project and possible options for funding and construction.
“Moving forward, with USDA, who is actually working with the Mayor and the Council on the Waste Water Treatment Plant (WWTP). With having conversations, they would be willing to fund this project around October time, after the water plant is submitted for bids and that project starts. They don’t like to do two projects for the same community at the same time,” Shafer said.
“The application with USDA would be submitted by Kurtis Strickland, who is working with us also, with no charge to the village. That fee would be done for free. That being said, that part will cost us nothing. The only other thing we might need to get is an environmental study.
“We’ve collected $86,263.64, the $3,880.07 is something the state reimburses for the levy. It is a certain percentage. I don’t know if the village is putting that in the fund, but if not we have collected $82,383.50 and those numbers are from the Auditor’s Office.”
Out of that, they have paid out for soil borings, survey of site, and drawings — totalling $16,907.10.
“At this point in time, USDA is willing to take another application, once they get the sewer project underway. Their understanding is that project will bid out in August or September. After that, they will be looking to do an obligation on this project around October, then go from there,” Wiedner said.
“The timeline is a lengthy one, but there are benefits. The benefits with working with USDA on their Rural Development Loan Program is essentially targeted towards community essential facilities, like Fire and EMS. The interest rate is a 30-year fixed rate. No bank that we found in this State would do that. They may get close to the rate, but they would want to renegotiate after 5 years.
“If you can get over the bureaucratic hoops and hurdles, which is basically approvals at every step, then there really are benefits. The downsize is that they require what they require.”
He added, based on council action they drafted up construction plans for a smaller building. Council had been discussing having a building built on those $800,000 in bonds, which would not cover the original plans for the building, which council expected to cost $1,100,000.
“You have had collections all of 2017 and half of 2018, which would be on the plus side of $75,000. We will have all of 2019 to collect as well, if we go by the proposed schedule,” he said. “You’ll have $150,000 cash to put towards whatever you borrow. We have plans for three bay or four bay, but my recommendation would be to plan three and bid the fourth and offices as alternates. That way you can see what your money will support.
“Make sure the contractor is being honest with the cost. Contractors do not have problems with alternates. We set that up so you can look at each one and decide what you want. Every time we bid a bay, throughout those years, the public entity has always taken that alternate.”
“If I’m understanding this right, by the time this thing gets ground broke on it, we’re going to have $150,000. We will have 2017, 2018, and 2019. I was looking at the difference, if you take that $150,000 and break it out over the 30 years that gives you $5,000 a year, that is your additional payment cost here,” Councilman Shannon Smith said.
Councilman Ray Waldeck asked if they could get bids, but Smith explained there was an “issue” council had to deal with first. Wiedner added, they are a while away from getting bids in the planning process. First, specs would have to be completed.
“What we should do, if this is the direction you want to go, we should prepare the plans and specs and get ready for the obligation this fall. We should have everything on USDA’s desk by the end of September. When they say we’re obligated, boom, we start bidding,” Wiedner said.
“Once they’re ready to accept that, they’ll issue closing instructions, which is a couple forms. We still need the bond council to review the ballot language and the village finances to certify that USDA has a hold of everything that the bank would want.”
“Each step would need to be made via formal motion, and that cannot be done today,” Solicitor Brian Muenchenbach said.
Councilman Jerry Carter pointed out, there is an agreement stating they must break ground on the property by the First of November. That makes this process an emergency, Muenchenbach said, stating council can call a special meeting to get final approval.
However, Smith was referring to a different “issue.” As stated before, council had already approved $800,000 in bonds. Once approved, Councilman Hickey voted to rescind those bonds. His proposed resolution was never drafted.
Councilman Waldeck asked Muenchenbach if Hickey can technically make that motion, since he is employed by the Fire Department.
“If you are employed by the department, you are conflicted out from voting. You must abstain from that vote and technically you cannot make that motion,” he said. “Someone else will need to make that motion, because you have a financial stake involved.”
A new motion will be needed to rescind the $800,000 in bonds, in order to move forward with the loan from USDA, which councilman Smith noted seemed like “a much better deal.”
Council also discussed what size building they would be interested in, stating they would like to stick as close to the original building plan as possible. Smith noted, he believes they could get a good building out of $1,000,000, instead of $800,000 or $1,100,000.
Smith reminded council the building is Fire and EMS and to keep that in mind when reducing the size of the potential building.
“If we’re willing to do some work ourselves, don’t kick a gifted horse in the mouth,” Chief Shafer said. “That might help us stay in our budget.”
Council could not make a motion during the special meeting, as two council members were absent and Hickey would have to abstain from voting. The motion and first reading to rescind the $800,000 in bonds may take place during the next council meeting, to be held on Monday, April 16 at 7 p.m. in the EMS building.
