With AFG funds shrinking, fire departments must look to alternative funding sources for apparatus purchases
For more than a decade now, the preferred source for funding the purchase of different types of fire department apparatus has been the Assistance to Firefighters Grant program. During that same time period, the money available to fund this and other type of fire suppression projects has slowly been declining.
We are now at the point where the funding allocated for the AFG program is almost half of what had been available during the program's peak years.
Thankfully there are other sources available to fund all or some of a new or used vehicle. Before getting into specific programs, here's a review of the different types of financial assistance programs available to fire departments for apparatus purchases.
Grants: Typically, direct monetary assistance to an organization to undertake a specific project or program. If spent properly, this money does not have to be paid back to the granting agency.
Loans: An amount of money given to the fire department that must be repaid to the lending agency.
Guarantee: A formal assurance by an agency that it will be responsible for a fire department's debt on an item if it is unable to pay for it.
Donation: A gift of money, property or equipment with no expected repayment.
There are a multitude of sources for these types of programs including federal and state government agencies, foundations, private corporations, financial institutions and insurance companies.
The U.S. Department of Agriculture's community facilities program is one of the oldest programs still available. Under this program, fire and EMS departments can access financial assistance to purchase apparatus, equipment and construct or renovate stations.
The program offers four types of assistance: a direct grant, a direct loan, a combination grant and loan and a loan guarantee. These programs are available to departments in communities with a population of 20,000 or less and with a median household income that is less than that of their state.
More information about who can qualify is available at local USDA offices or USDA.gov. This program takes applications on a revolving basis throughout the year.
The drawback to the program is the amount of grant money allocated to each state is generally less than $1 million. Because of this and depending on the purchase price of the apparatus, a fire department also may need to explore other funding possibilities.
Block grants and community lending
Another possible source for apparatus funding is the community development block grant program. This program was established in 1974 and is administered by the Department of Housing and Urban Development.
Most municipalities that have a population greater than 4,000 residents receive block-grant money either directly from HUD as an entitlement community or through their state government.
As much as 15 percent of the block-grant funding a municipality receives can be used for public services. Through this program communities have funded a number of fire and EMS activities including buying new apparatus and equipment and renovating or building stations.
The application process normally starts locally each January or February. Specific information on how to apply is available from local municipalities.
In recent years the block-grant program, like so many others, has experienced budget reductions. Once again, depending on the total cost of the apparatus, a block grant may not be the complete answer for the project.
The community lending program is another possible solution for apparatus-funding dilemmas. This program is administered by the Federal Home Loan Bank system, which makes loans to its member banks that in turn loan money to a fire department.
This program offers advantages such as lower interest rates and longer payment terms. To learn more, ask financial institutions if they are a member of the FHLB system or visit fhlbanks.com.
The most impressive part of this program is that the applications are approved or denied within 24 hours of submission to FHLB. One thing to remember is that this is strictly a loan program and no grant funds are available through it.
Local foundations Another potential source for at least some of the funding to purchase a new vehicle are the thousands of foundation that exist across the nation.
Learn what foundations are located nearby and call their directors to explain what type of project the fire department needs help funding. From these conversations, determine if an application is eligible and what the process is to access funding.
Another resource is The Foundation Directory, an online publication that lists funders and their programs.
Keep in mind that most foundations cannot fully fund a new apparatus. The fire department will probably have to marry the foundation funding received to one of the other programs already mentioned.
Municipal bonds and excess equipment
Municipal bonds may be another avenue to pursue. The fees involved in floating a bond issue are quite expensive, so the perfect time to explore this venture might be at the same time the municipality is issuing bonds for a capital improvement project like water, sewer or transportation upgrades. An apparatus purchase, if timed correctly, could fit nicely into this financial package.
And remember, the federal government operates an excess and surplus vehicle program that is open to fire departments and EMS agencies. Through this program, a department can acquire fire-fighting vehicles at drastically reduced prices.
The list of these vehicles is available online and many states have agreements with the government to market these vehicles through a state surplus agency.
Copyright © 2020 FireGrantsHelp.com. All rights reserved.