FARMINGDALE — Farmingdale’s fire station project will go out to bid in the coming weeks after the Selectboard secured a loan Friday.

The new fire station has been on hold after the government shutdown affected a potential federal loan for $1.7 million and area banks were solicited for their best offers. Voters approved seeking the loan last month, but not before questioning the station’s design.

Kennebec Savings Bank was awarded the loan unanimously based on an interest rate of 4.29 percent, annual payments of $126,759.48 and $835,189.60 in accrued interest over the 20-year term. Camden National Bank offered an interest rate of 4.49 percent, translating to annual payments of $128,952, and $879,007.62 in total interest. Skowhegan Savings Bank offered a 4.58 percent rate, translating to $132,359 annual payments and $947,180 in total interest.

All of these numbers are higher than estimates given to voters based on a 4 percent rate from the U.S. Department of Agriculture. However, that rate has changed, and the amount is unavailable in any case because of the government shut down.

The Kennebec Journal reported on Tuesday that the government shutdown was hampering the project, as the town was looking to secure a loan from the USDA. In response, the town solicited loan offers from Kennebec Savings Bank, Camden National Bank and Skowhegan Savings Bank.

Selectman Jim Grant said ahead of the meeting that it was in the town’s best interest to put the project out to bid as soon as possible, as contractors would be planning in the winter for their work in warmer months.


“If we go out now, the contractors are going to be hungry because they may not have anything for April, May, June, July,” he said. “It’s all about getting the best price.”

Grant said some of the offers from the banks would expire before the next regular Selectboard meeting, which prompted Friday’s special board meeting.

Rose Webster, the town’s treasurer, said securing the loan through the USDA would have been impossible at the 4 percent rate because the process requires more work than a bank loan, such as using a USDA-approved lawyer. She said she started the process in December, but it would not have been complete quickly enough to avoid the government shutdown.

“There was no way we were ever going to get the 4 (percent rate),” Webster said. “I started the loan application. It’s a process and it still wouldn’t have been until March (before it was done).”

Webster said the town could pay off the Kennebec Savings loan in monthly payments, which would reduce the interest payment, saving the town in the long run.

The USDA’s rate last quarter was 4 percent, and it was due to change this month, when the new quarter started. Loan information presented with Farmingdale’s December warrant article estimated $801,779 in total interest, based on a 4 percent interest rate on a 20-year loan from the USDA, with annual payments of $125,089.


The total cost of the loan was estimated at $2,501,779. Using this year’s budget, Webster estimated the property tax rate would jump by 59 cents — from $16.30 to $16.89 — per $1,000 of assessed value.

The future site of the fire station, just north of Gosline’s Hardware on Maine Avenue, has been clear since May.

Sam Shepherd — 621-5666

Twitter: @SamShepME

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