Thread: usda grant

  1. #1
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    Default usda grant

    Has anyone ever applied and received a usda grant? Tell me more.

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    We received a partial grant to purchase and update a very nice used 1985 model L9000 pumper in 2003. Approx grant was $32200. Before you apply, find out what the max grant you can obtain is based on the income level of your community (% and $) . We went about it logically in developing a “budget” (max $ we can come up with and what we think will cost for something that will work, then asked for grant for the difference between that and what we had on hand). Wrong way to do it. What % of the project you can get in grant $ is based on income levels in your community. May be 15%, 50% 75% etc.

    As I recall the max grant in 2004 was $50-60k. With a bank loan and some local $ get you into a very nice used pumper with equipment (as we did) or even a "beer budget" new pumper. Not a good a deal as FireGrant but you will know quickly if you qualify.

    USDA at first told us we had to borrow from them the additional $ we needed about the grant + cah on hand in order to get the grant. Found out that is not correct. We obtained a better rate at commercial bank (local branch of Union Planters) than what USDA loan would be. Fire trucks/stations/etc are tax exempt loans as they are an “essential community service” (banks pay no US/state income tax on the profit). You need to have an attorney write the bank a letter establishing that the loan is for an essential community service (which obviously includes fire protection, sewer, water etc). The Bank needs this document in the loan file to show the bank examiners/regulators. I had a couple of banks that wanted an additional pile of paperwork for this purpose (go thru the entire bond attorney/city borrowing capacity BS which is very expensive) so these banks were eliminated from the city's list of banks. With USDA loan you have annual reports to file, a large pile of additional loan origination paperwork (including as I recall the bond attorney BS). MUCH easier and less expensive to go with a bank for a loan (if needed).

    Eligibility and % of project cost available to you as Grant $ is based on your last census income levels (compared to state and nation). How low income are you. Check around on % grant funds other communities with similar income levels received recently (check USDA Rural Development web site). Also $ grant amount. USDA will give you will be no more than what you ask for ($ amount and % of the project). In hindsight we could likely have received more $ and higher grant % but we were afraid of queering the deal by being "greedy" with our request. Chief did not believe me when I came up with the program so only asked for $25000 and so the grant was for $25,000. We went back and cried for more (couldn't find a suitable truck @ $45000 budget) and they gave us supplemental of additional $7200. Ended up spending $60000 on the project

    They also like spreading their $ around (after all this is a BS porkbarrel, vote purchasing program. Lots of smaller awards gets more PR). Economy measures like buying or buying/converting/upgrading a decent used truck (many are available) vs buying someone's wet dream of a new 2006 custom truck are going to get you a lot further with USDA. Get your local economic developer to help you (if they know there head from their butt), they already have a working relationship with the local USDA Rural Dev guys that are going to shepard your app thru the system.

    To do it again, I would request a $75000 grant, on a $110000 program. Hire a small builder to construct a new 1250gpm/1500gal body on a used low mile diesel/auto/air ride chassis and then again equip. with all the required ISO equipment. Doable, but we lowballed ourselves out of the ability to do so.
    Overall for a Fed program pretty easy to work with (the local USAD-RUS manager is a decent sort, unlike many civilians in USDA/Fed Govt).

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    neiowa,

    Thank-you for sharing your USDA experience, very informative.

    fish

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    We got a 50k grant from USDA 2 years ago to help us buy a new engine. We also borrowed another 110k from them for 15 years which made the payments quite affordable. It was easy for us since our local office did most of the paperwork. One thing you have to look out for if you do a loan with them is the cost of a bond counsel and your own attorney's fees. They ended up costing us about 4k but it was worth it to get the grant.
    One of the small towns we protect also got a grant to help build us a new station. USDA won't give a building grant to a fire district, but they will to towns and villages so the village built the building and we use it. Good deal for both of us.
    BUT, the whole program depends on the medium income of the residents of your area. They've raised the income levels to be eligible and made it really hard to meet them. We got in before they changed and would not have gotten anything had it been a year later.
    Check with your local USDA office and see what they say. You never know.
    Jack Boczek, Chief
    Ashley Community Fire Protection District

    FLATLANDERS FOREVER!

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    Default Watch Your Estimates

    We have received 2 USDA grants in the last 4 years, 1 for a used engine, and 1 for LDH & communications equipment. It has been my experience that while the grants require much more paperwork than an AFG application, their staff is extremely helpfull. The elgibilility requirements have been readjusted based on the 2000 cencus.

    1 major area to watch is your cost estimates. If you apply for X$ and then your project is completed for less, the difference is subtracted from the grant or "free" money. Make sure you spend the full amount you listed as project cost on your application.

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