1. #1
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    Default Chassis Pay Before delivery

    I know this has likely been asked and answered, but I need to know if it is possible to draw down the chassis payment to avoid interest, then draw remainder after truck is complete.

    Anyone????

    Sorry if this is a repeat, but I am in a rush to find out.

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    Default Chassis payment

    From what I am understand all you can get is 25 % of the total FED share. On our truck that was not enough to pay off the chassis. There is also some issues on weather you would need two performance bonds?

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    We were told no problem - with no limit as long as it was JUST for the chassis payment. No second performance bond either. As always, a quick call to your FEMA grant specialist at the 800 number will make sure.

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    Granted, ours was an '05 grant, but we paid for the chassis when it arrived and didn't have any problems. I think it was about 40% of the total cost, and actually ended up getting us a discount (which was put right back into body upgrades) by pre-paying it.

    But, like LV said, give them a call. A couple minutes of time now may save a lot of time later.

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    Default From 2006 guidelines

    This is from last years FEMA guidelines:

    (8) Pre-payments: A grantee may not use grant funds to prepay for any products or services in advance of delivery of the products or the rendering of services. A down payment for the purchase of vehicle is allowable if required in the purchase contract, but we will only allow up to 25 percent of the Federal share to be drawn for this purpose. The grantee may use grant funds to pay for the purchase of any vehicle’s chassis if the chassis is being supplied by a third-party vendor (i.e., a company other than the vehicle manufacturer). Documentation to support the independence of the third-party vendor may be required prior to our approval of any payments for any chassis. Federal funds may not be used for any other periodic or progress payments except the final payment, which should not be requested until after the vehicle is received, inspected, and accepted by the grantee.

    You can add your portion of the money to any pre-pay to take a discount if offered. No matter what, if you ever do pre-pay any money for any product, FEMA grant or you own, ALWAYS have a performance bond issued BEFORE you hand over a penny.

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    Tomwnh has provided the answer, and this is pretty tight on their side. "Third party" means dealership, not purchasing from the builder, and i believe the title has to come to the department/municipality. If you add the local match to the 25% withdrawal, you'll likely still come out of pocket but will be made whole on the delivery payment.

    Our attorney opted for a zero down contract with performance bond--we missed a discount, but there is no risk of loss either. Ultimately, everyone (including our Program Specialist) is breathing easy.

    earl

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    Again, in my 2006 grant, we prepaid the chassis, which was 32% of the price of the entire truck. The ENTIRE 32% was paid by drawing funds from FEMA.

    Our grant specialist very clearly set out that prepaying the Chassis, and
    a pre-payment on the entire truck were two different things. At the point
    we paid the chassis, we owned that chassis. A prepayment you won't own anything until the job is done.

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    What LV did is still the case this year, even if the chassis is 50% of the cost of the whole delivered truck you can still use it all since it will then be completely owned by the department to take to another builder for a body if there are issues with the chosen body vendor. 25% limit only applies to custom/single source where prepaying the chassis isn't an option, just downpayments.

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    Quote Originally Posted by BC79er View Post
    What LV did is still the case this year, even if the chassis is 50% of the cost of the whole delivered truck you can still use it all since it will then be completely owned by the department to take to another builder for a body if there are issues with the chosen body vendor. 25% limit only applies to custom/single source where prepaying the chassis isn't an option, just downpayments.
    That's what I was looking for.

    The chassis IS being (has been) built by a "third party" and is now in body production.

    No "discount". Just that this would allow avoidance of interest on what is owed the chassis manufacturer. And that's a lot.

    Now that I know it's not a "stupid question", I'll call my G.M. and ask him too. Then draw down the funds.

    Thanx everone!!!!

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    We did precisely the same thing that LVFD301 did. And dont forget to get the discount for the pre-payment. Additionally, make sure you guys obtain the necessary paperwork proving you own the chassis, just in case (knock on wood) god forbid your body builder goes belly up halfway through your body. And if you dont think it couldnt happen? Google "New Lexington Fire Apparatus."
    "Loyalty Above all Else. Except Honor."

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    I know it's a couple years ago, but we bought a chassis through our state contract and could only draw 25% of the money to pay for it. We used our funds to pay the rest and had enough left in grant funds to pay the remainder of the truck off when it was delivered.
    Jack Boczek, Chief
    Ashley Community Fire Protection District

    FLATLANDERS FOREVER!

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    Quote Originally Posted by FWDbuff View Post
    We did precisely the same thing that LVFD301 did. And dont forget to get the discount for the pre-payment. Additionally, make sure you guys obtain the necessary paperwork proving you own the chassis, just in case (knock on wood) god forbid your body builder goes belly up halfway through your body. And if you dont think it couldnt happen? Google "New Lexington Fire Apparatus."
    Good idea there, Our neighboring dept. had there chassis there waiting on a body to be put on it when they went under. Pretty sure they had to go to court to get there chassis back from them and took forever to get that done.

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