Newtown Hook & Ladder President Rick Camejo and Building Committee representative Rob Manna reported to the Board of Finance May 11 that the all-volunteer company could be facing as much as a $1 million deficit against projected costs on a new headquarters being built on Church Hill Road.

The Newtown Bee reported last week that workers on the public project would likely qualify to be paid prevailing wages, adding as much as a half-million dollars to anticipated costs. In order to get the building outfitted for basic functions for the fire company, Mr Camejo and Mr Manna said they learned other related costs could double that deficit.

The town’s central fire company was originally planning on constructing a new headquarters on donated land on Sugar Street near its intersection with South Main Street. But after neighbor complaints and protracted land use agency deliberations, Hook & Ladder failed to receive necessary permits to complete its project on that site.

Company leaders previously told town officials that costs tied to the consideration and review of the Sugar Street parcel tapped funds that could have been used for actual construction. Then, following a lengthy search which included consideration of another site on South Main Street, the fire company was able to acquire an approved parcel just below the flagpole on Church Hill Road.

But that parcel did not come free — and the company had to pay $500,000 to complete that purchase, putting the project even further over budget. The final blow came last week when Hook & Ladder representatives learned that the prevailing wage requirement would likely be enforced for construction of the facility.

Mr Manna told finance board members that the overall cost projection for the new headquarters could now exceed $2.5 million, and that would only get the company into a safe and functional facility. Any interior finishing, including the entire second floor, would come later at added expense.

The town has pledged up to $1.5 million to help the project get built, and to help expedite getting millions of dollars of apparatus and dozens of volunteers out of the facility behind Edmond Town Hall that has been deemed structurally unsound.

Mr Manna said the company is working with a local bank for a mortgage, as well as an additional $500,000 line of credit so they have enough fluid cash to keep the building project on track once construction begins. He said the company is poised to sell an easement on a part of the property to Aquarion Water Company for a pump house, but the rate being negotiated would not come close to eliminating the deficit.

The two firefighters said most of the balance of funding would have to come from fundraising, although they said after the meeting that Hook & Ladder would not decline any qualified offers from local benefactors who might come forward to assist with underwriting the new building.

“We won’t know any real numbers until bids [come back],” Mr Manna said, referring to actual construction costs. But both officials praised Claris Construction for providing “a lot of the budgeting work gratis,” and soliciting ballpark costs so the company could solidify its project budget expectations.

Mr Manna said the company would ultimately like to secure a $2.5 million construction loan, and once members occupy the facility, use the town’s $1.5 million as a down payment for a mortgage covering any outstanding debts for the project.

The company is also looking into possibly securing a USDA loan that has a 40-year term — allowing it to borrow more and closing the deficit gap. He said Hook & Ladder’s annual fund drive generates between $30,000 and $35,000 — enough to cover annual interest costs for the mortgage.

Finance Board Chairman John Kortze asked the fire company officials to keep in touch with town leaders as they solidified project costs.

A waiver of prevailing wages would certainly make a difference, but lawmakers were far from reaching an agreement on adjustments to the standard. First Selectman Pat Llodra previously reported that the town sought a legal opinion on the issue on behalf of the local volunteer fire company.

But she said case law — specifically a 2009 case involving a Weston volunteer fire company headquarters — stipulated projects involving public service agencies are subject to the standard, after an inquiry was made to the state Labor Department.

Prevailing wage is a higher, state-regulated pay rate for labor on construction or remodeling efforts of any public building, such as schools and town halls. Under this law, the cost of construction increases by nearly a third over what the original estimated cost would be.

Currently, under the Connecticut General Statues, prevailing wage legislation applies to each contract for the construction, remodeling, refinishing, refurbishing, rehabilitation, alteration, or repair of any public works project by the state or its agents, or by any political subdivision of the state.

State Senator Tony Hwang, who represents Newtown, has been working with colleagues and leaders of state labor unions trying to negotiate agreements he believes has great potential to increase the number of more sizable projects subject to prevailing wage. Those larger projects, he said, would result in a higher corresponding number of jobs for state union workers and the wages coming to them for their work.

“One of the two bills we are looking at would increase the prevailing wage threshold [on qualifying projects] from $2 million to $4 million,” Senator Hwang said.

But Mrs Llodra, who is closely following the prevailing wage deliberations at the capitol, said, “I’m hopeful, but word on the street is it’s unlikely to happen.”