What is in this article?:
- How to budget a fire station design project in a down economy
- Land now, station later
In 2008, contractors had so much work that some couldn’t spare the time to even bid on projects. The national economy was on a high with the housing industry leading the charge. Unemployment rates were low. Money was flowing freely from taxpayers to municipalities and from municipalities to architects and contractors. Schools, libraries, fire stations and the like, were springing up everywhere.
Now, many fire districts are searching to find a few dollars to undertake even the simplest of projects. How times have changed.
As tired as we may be with the phrase “the new norm,” we’re now going on five years since the bubble burst. Frankly, we won’t be going back to the way it was for the foreseeable future. It was a market correction; an adjustment; a reset for our benchmarks. The question is what do we do now?
Alternative sources of revenue
Traditionally, fire districts would save up enough money to build a new station, or sell bonds to finance it over time. Bonds were most often voter approved, which required a compelling case to be made to their taxpaying constituents. Along with the “new norm” has come the attitude of no new taxes. This has made voter approved measures extremely challenging, especially when they require a super-majority.
Saving money has become equally challenging. In Washington State, as in most states, a fire district’s primary source of revenue comes from property taxes. As assessed values have fallen in recent years, so has the revenue these districts can collect. Many districts have tapped their reserves as a stop-gap measure. For some municipalities, the consequences have been unfortunate. There have been several recent reports of cities declaring bankruptcy. Unless a fire district has sufficient revenues to set aside enough funds toward a specific purpose, like building a new fire station, drawing down reserves for an extended shortfall is not financially sustainable.
In 2009, the U.S.awarded ARRA Fire Station Construction Grants. That was a wonderful thing. Grants for so-called “bricks and mortar” have always been hard to come by so it was disappointing when the ARRA grants didn’t continue. However, the result has been a notable increase in the attention to grant opportunities and the aggressiveness in which districts are pursuing them. One such opportunity has been Community Development Block Grants. These are funded by the U.S. Department of Housing and Urban Development and administered through state and county governments. Their purpose is to improve a community’s economic, social, and physical environment. Fire stations fit these criteria well. Because these grants are generally capped at $1.0 million and are required to serve low- and moderate-income residents, they are excellent opportunities for small, rural communities. Competition is fierce, but several fire districts in Washington State have benefited tremendously by this program.
Another great opportunity is the rural development arm of the U.S. Department of Agriculture. Their mission is to improve the quality of life for rural Americans, which includes building and expanding vital community facilities, such as fire stations. For communities and cities of up to 20,000 in population, the USDA can provide both direct and guaranteed loans, as well as outright grants. The interest rates are often lower, and the terms longer, than those available by selling traditional bonds. And, voter approval is not required.
Program specifics and eligibility requirements for these two programs may vary from state to state, so check with your local administrating office to see how your department or district might qualify.
Renovate vs. replace
With increased strains on revenues and tighter budgets, many fire districts have looked to renovating their older stations as opposed to building new ones. Remodel projects often run 50% to 75% of the cost of new construction. Much of the cost savings can be attributed to less intensive site improvements and utilizing existing utility infrastructure. Savings are also derived from not replacing a floor slab, exterior walls, or a roof structure overhead. In general, if the station’s bones are good, keeping it will cost less than replacing it.
Remodels are on the rise for other reasons. Some districts are finding a remodel can defer a more extensive project for a better economic time in the future. Smaller projects that remove accessibility barriers, address gender neutrality, add emergency back-up power, or upgrade the seismic resistance of the station can be accomplished on a piecemeal basis. This may only be a stop-gap solution, but staving off a larger capital project by ten years could be better financially in the long run.