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Commissioners approve rural infrastructure grant closeout, ask staff to seek financial surety for Project Gantry
Summary
The board voted to close out a rural infrastructure grant tied to the Washington County industrial park and directed staff to pursue financial assurances from Project Gantry after hearing that federal and state grants require job-creation benchmarks that could trigger a clawback.
Washington County commissioners voted to approve final closeout paperwork for a rural infrastructure grant and asked county staff to pursue some form of financial surety from Project Gantry before the county spends large sums on industrial-park infrastructure.
The board approved submission of closeout documents for RIF grant 0239, clearing that award administratively so engineering work and related invoices can proceed. County project lead Melvin said the county also has two larger awards tied to Project Gantry — a State CDBG award of about $3.4 million and an Economic Development Administration award of about $4.9 million — that together fund rail spur, water and sewer work at the industrial park.
Those grants are structured differently: the CDBG award carries a federal requirement tying grant dollars to job creation and can trigger a repayment obligation if the recipient project fails to reach agreed job targets; EDA funds do not include the same clawback mechanism, Melvin said. He told commissioners the CDBG loan condition effectively requires one job per roughly $35,000 of CDBG funding and that failure to document the required jobs can leave the county responsible to repay spent funds.
Because of that risk, commissioners directed staff to open discussions with Project Gantry and bring back recommended forms of security — examples discussed included an irrevocable letter of credit, cash collateral or property collateral — that would reduce the county’s exposure should the hiring commitments not be met. Staff and commissioners noted there are possible mitigations short of a single developer creating all jobs (for example, a secondary company on the spur could help meet the job metric), but they said a written form of surety would improve the county’s protection before grant-funded work is completed.
Melvin told the board engineering work is underway and that construction could begin in about six months. Commissioners and staff discussed demolition costs for existing structures on the donated parcel that the county will need to remove to build the spur; Melvin said demolition and disposal could be allowed as eligible grant expenses and therefore included in project budgets.
The board approved the RIF grant closeout by voice vote and reached consensus to authorize staff to negotiate with the company on acceptable forms of security and return with proposals for formal action.
Ending: Staff said they will meet with Project Gantry representatives and return to the board with proposed surety options and a timetable for the next procurement and construction milestones.
