Communities, counties and economic development organizations in an eight county region of southern Indiana are looking at using a new version of an old program to fund infrastructure improvements. For years the United States Department of Agriculture has offered low interest loans to local agencies to improve things like buildings and roads, but the offers were rarely taken in Indiana.
"Borrowing from the federal government is not always easy," said Jeff Quyle, CEO for Radius Indiana. "We decided to get involved as a clearing house. We go through the paper work and get the money from USDA ($500,000), mix in some of our own ($250,000) and then loan it out at a low interest for projects in our area."
The first taker was Martin County. The county borrowed $97,900 to fix the roofs on the courthouse and jail. The county has 10 years to pay the money back at an interest rate of 3.5%. The repayment schedule is set up to coincide the the county's biannual tax draw.
"Martin County's investments in the county jail and courthouse roof repairs are necessary improvements that we had to make in response to the deteriorating condition of the buildings," said Martin County Commissioner Dan Gregory. "Our county has limited financial capacity to make investments from reserve funds and this local program is making it possible to get the problem fixed."
Between Crane in the north and the Martin State Forest in the east, much of Martin County is non-taxable. That limits the amount of money the county can put together for much needed projects like the buildings.
The money is part of the Intermediary Relending Program (IRP) established by Radius.
"What we have done is cut a lot of the paperwork for the agencies seeking the money," said Quyle. "These loans are for smaller projects than those that would require a bond issue. We wanted to make the process simpler."
Quyle says he believes that there are plenty of projects that communities could use the money for.
"It could go to a traffic safety project to add a turn lane, or it could cover new storm drains in an old industrial park," he said. "The projects are endless. We do score them on their potential to create or retain jobs, or to promote economic or community development."
The maximum amount of a loan is $150,000. While the borrower is paying 3.5% interest to Radius, Radius is paying USDA back 1% interest.
"We are using that difference to bolster and lengthen the life of the fund," said Quyle.
Radius, which works closely with are economic development organizations, turned to those groups to help get word out to government agencies that the loans are available. It was the Martin County Alliance that directed the commissioners to Radius for the loan.
"We are appreciative that Radius offers this new program to help our governments," said Martin County Alliance Executive Director Tim Kinder. "It's another great asset that this region has to offer and I look forward to hearing about how other counties benefit from the IRP."
So far Martin County is the only one to take a nibble at the IRP offering.
"We have no applications from anyone else," said Quyle. "We know all of the local economic development organizations in our area are aware of it. I think it is just a matter of time before we see more get involved and try it."
"We are looking at it," added Bryant Niehoff, executive director for the Daviess County Economic Development Corporation. "It looks like a great program for upgrading infrastructure. We are really interested in seeing how it works for Martin County. I see it as an opportunity for us to invest in more infrastructure."
Quyle calls it a simpler way for smaller projects to get funded without huge amounts of paperwork.
"It is one more tool in our toolbox for improving the region," he said.