Generic Space Needs
When the Exploration Committee was first formed and began to consider the specifications for a relocated fire/ambulance station, representatives of the Blue Hill Fire Department, Peninsula Ambulance Corps and the Select Board met with the engineers to assess the space requirements for a modern Public Safety facility.
That work resulted in an assessment that the combined facility would require almost 17,000 sq. ft. of indoor space, of which 11,500 would be required for a standalone fire station and an additional 5,500 sq. ft. would be required if the Ambulance Corps was also housed at the facility. (No analysis was performed to assess the square footage required for a standalone ambulance station.)
Estimated Costs
Generic “Greenfield” Site
Based on recent Maine projects managed by these firms and the space needs identified above, the all-in build costs were estimated to be $550 per interior square foot, or approximately $9.2 million, not including any land value.
South Street and other Alternate Blue Hill Locations
Prior to identifying the Tenney Hill property as a possibility, the engineers made it clear that, due to the challenging site work and extensive fill that would be required for either the Town’s South Street property or the Beech Hill Road property, the comparable cost of construction on either of those sites would be very likely to exceed the $9.2 million generic estimate.
Estimated Costs for a Tenney Hill Facility
The engineers have provided the Town with the following estimates of project cost:
* Attributing no value to the acquired BHCS property and the potential sale of excess land on the parcel.
The cost to construct the Public Safety facility at the Tenney Hill property is estimated to be $2.5-3.0 million less than a comparable facility on South Street.
Financing
Initial Purchase
The Town currently has approximately $2.5 million of cash on hand, which is close to the minimum cushion recommended for Maine municipalities. However, given the seasonality of our cash flows, the Select Board believes that the Town can prudently contribute approximately $700,000 toward the purchase and expects to recommend a $1.2 million five-year loan, with principal due at maturity, to finance the remainder of the purchase price.
The rationale behind the loan tenor is that this will provide the Town with sufficient time to:
- design and make the necessary improvements to the property,
- solicit grant funding to reduce the Town’s contribution to the overall cost, and
- negotiate a multi-year lease agreement with Peninsula Ambulance Corps, reflecting the value of its use of the facility.
Grant Opportunities
Other Maine towns building similar “public safety” facilities have received grant funding through Federal “congressional directed spending” (earmarks) representing [20-30]% of total project cost (though the proportions vary substantially). In addition, there are state and other grant programs directed to support the construction of facilities to support fire fighting, ambulance companies, and other emergency and law enforcement activities.
Long-term Financing
After the project is complete, the Town anticipates obtaining long-term (such as 20-year) financing through the Maine Municipal Bond Bank to refinance the initial loan and any construction loans obtained to finance the build.
The property tax impact of this borrowing depends on a large number of unknown factors, such as future interest rates, actual (vs. estimated) project costs and, significantly, the negotiated lease rate for the space used by Peninsula Ambulance Corps.
However, to put the project in perspective, the annual debt service for the long-term financing described above would be in the $350-400k range, before any contribution to the cost by the Ambulance Corps. This would represent about 3.6% of our annual property tax commitment.