Possible fed funding freeze raising concerns

ROSEBORO — Concerns that federal grant projects may fall through due to threats of a funding freeze by the White House caused concerns during Tuesday’s town board meeting.

A discussion on the issue was broached by town attorney Sandy Sanderson, who commented on Roseboro’s current Rural Transformation Grant (RTG) contract, money being used to re purpose the building the town purchased 109C W. Roseboro St.

Sanderson said the town was obligated to pay contractors for work covered through the RTG contract and threats of not receiving federal reimbursement due to a freeze could lead to breach of contract. His current focus was planning for “a way out” should the worst happen.

“The contract, and the reason for that, is we’re paying for this with grant funds” Sanderson explained. “In the last two weeks, we’ve seen a lot of federal grants get canceled, postponed or frozen. My concern is if our grant money gets frozen. This contract is with a contractor. They don’t care whether our grant money is frozen, and we would be obligated to pay that money, and we would be in breach of contract.

“And so, I want us to have a way out that we can stomach in the event that happens,” he added. “I mean, hopefully, it’s never going to happen, but in light of the things that have gone on in the last two weeks, it really has me concerned, and I want us a reasonable way out, in the event that it does happen to us.”

While a freeze is currently a hypothetical concern, Sanderson said he’s already putting plans into place, although he did note, regardless of what happens, there will be penalties.

“I’ve got it figured out, but again, we don’t have an agreement yet as to the language” he said. “I mean, obviously, there’s going to be penalties to us if we have to walk away. But again, it has to be penalties that we can stomach because the contract is close to a million dollars. We don’t want to be stuck with having to pay a million dollars, which the federal government had promised us, if they don’t pay us.”

Commissioner Ray Clark Fisher asked if they had other options available that were used in the past, such as having the money transferred to the project. Mayor Alice Butler said there wasn’t.

“No, this is totally different branches of government, and every one of them does contracts differently,” she explained. “On this particular grant, the town actually pays the money, and then we get reimbursed from the government. I mean, they’re just all different.

“The way this was funded was, once a month, the contractor will bill us, we pay it, and then we ask the federal government for it,” Butler added.

Sanderson said this has become an issue among his other clients, and the one Roseboro could potentially face was the one to fear most.

“I’m dealing with some of those with some of my other clients as well, and those are the scariest ones,” he said. “Why? Because even if it’s a a temporary freeze, you’re basically floating this money to get money back from the federal government. If there is a a freeze, or whatever, we just want it to be something that we can handle.”

Clark further inquired about any steps being planned to help remedy the situation. “How do you ever feel comfortable?” he asked. “I know you’re probably going to have to renegotiate, is that what you’re doing?”

“Yes, that’s what we’re talking about; we’re talking about the terms to get out in the event that we have to get out,” Sanderson replied. “Specifically, I mean, we told them that this is our concern and we’re not wanting to get out of this contract. That said, all the other normal things that are in a contract and why you get out really wouldn’t apply.”

He continued, “If they don’t do what they’re supposed to do, then we’ve got ways out. But if they’re doing what they’re supposed to do, they being the contractor, and the only reason that we’re wanting to get out is because the federal government is not giving us the money that they promised us, then again, the contractor doesn’t really care about that, so again, it’s not going to be pain free if that happens. But we need to have something that we can live with.”

Butler also highlighted how the situation stemmed from struggles in finding an architect and contractor for the project.

“This, to be honest, it’s because we had trouble with finding an architect and we had trouble finding a contractor, so we’ve had to bid it out,” she said. “That said, this is obligated ARPA money, so it’s definitely federal money, and the project has to be finished by December 2026.”

Sanderson said the concern has been one in the back of his mind, even before the talk of freezes. “The last two weeks has made it a concern in front of my mind. Hopefully, it’s worrying for nothing, but it has become reality for a lot of people recently.”

Butler said, while nothing is certain yet, they are actively working on renegotiation and will host a special meeting at a later date to vote on the RTG contract.