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Monday, Feb. 26, 2024

City rainy day fund megasite ‘seed money’

DAVE MOSIER/independent editor

Van Wert Fire Chief Jim Steele made a rare appearance at Wednesday's City Council meeting for a discussion of whether to re-seek fire/EMS contracts with neighboring townships. (Dave Mosier/Van Wert independent)

Van Wert City Council voted Wednesday to pledge the city’s “rainy day” money in hopes of a sunny payoff down the road when improvements to the city’s megasite are completed.

The $500,000 in the city’s rainy day fund will be added to a $500,000 advance from the Ohio Department of Development to provide $1 million that can be used for upfront expenses involved in running utility lines, making road improvements and constructing a railroad spur to the 1,600-acre site northeast of Van Wert.

Also, because of delays in the project at the state and federal level, the city also needed to renew its 10-year purchase agreements with the owners of the 1,600 acres.

“Our major expense is at the front end of this project,” Mayor Don Farmer said following Wednesday night’s City Council meeting.

The mayor said using the city’s approximately $500,000 rainy day fund was necessary because of information received recently by the city that the $500,000 advance by the state would not be reimbursed after it was spent.

“We were thinking that that $500,000 would come, we would spend it, have paid invoices of what we used it for, send those into the state, they would again replenish that pot for what we thought would be seed money and we would just continue on working that way,” Mayor Farmer said. “Well, that’s not the way it works.”

Unfortunately, the ODOD requirements are that the $500,000 be spent and invoices sent in to show what it was spent on as a guarantee that the rest of the $5 million grant would be spent appropriately, but that any further spending would have to come first from the city treasury and then reimbursed after invoices were presented.

That presented city officials with a problem: where to come up with the upfront money needed to fund improvements to the site, as well as to pay for property purchase options and the cost of the land for the rail spur.

The answer was brought home recently when the rainy day fund certificates of deposit came up for renewal at what the mayor said was “a very low rate.”

City officials decided that using the rainy day fund as “seed money” for the megasite project would be appropriate, since the money would not actually be spent on the project, but would be reimbursed by the state as invoices were presented.

The only possible glitch, the mayor noted, would be on how the state responds to the city’s application for the money, which he said was sent in just under the May 31 deadline. If the city must wait until July to receive state money, however, it could have an effect on the city’s purchase agreement for the railroad spur land, which expires June 30.

Mayor Farmer did pledge that none of the city’s rainy day fund will be spent if reassurances aren’t received from the state that those dollars would be totally reimbursed.

“We will not spend a dime of that million dollars until I am sure there are no glitches at the state level,” the mayor said. “I am not going to be a mayor who sits here and finds out he spent any part of the city rainy day fund account and, then, oh-oh, we’re not getting paid.”

If they receive the proper assurances from the state, city officials expect the process to move forward fairly quickly. Bids are expected to be sought in the fall, with bids awarded this winter and work begun, and completed, next year.

“We are now in a go situation; we’re waiting for moneys from the state now,” Mayor Farmer said, noting that city officials have been told by state officials that there would be a quick turnaround on receiving the state funds.

Mayor Farmer said he was excited about the project, adding that, even if a plant is not built there in the next 10 years, doing the work — especially the railroad spur, the most expensive part of the project — would also make two other large parcels of local land more developable.

City Council also discussed the possibility of re-seeking fire and EMS contracts with neighboring townships, with no decision forthcoming, and sought members’ input on the county’s 2007 comprehensive plan.

Legislation adopted Wednesday, in addition to measures related to the megasite, included a then-and-now certificate and one to apply for ODOT Transportation Enhancement Project funds.

POSTED: 05/31/12 at 6:25 am. FILED UNDER: News