Grand Hassle Nets Grand Facility

How a charter school got a USDA loan and grant for a Monolithic Dome facility

“The result was worth the effort!”

That was how Robert Melosh, facility project coordinator, at the Children’s Reading Center (CRC) described all he and school administrators had to go through to get their new school.

The result Mr. Melosh referred to is five Monolithic Domes, completed in 2008 for CRC, a charter school started in 2003 for Kindergarten through Grade 5, in Palatka, Florida.

On its 11-acre site, CRC now has a Monolithic Dome with a diameter of 132 feet that encompasses ten classrooms surrounding a central, open library. Its second largest dome, with a diameter of 75 feet, functions as a multipurpose area with a cafeteria, assembly room and two kindergarten classrooms. Three remaining domes, each with a diameter of 44 feet, serve as an entrance and administrative area, a teacher resource center and staff break room, and a science-technology lab.

But while the result – those five domes – went up with relatively few problems, the effort to get the project started is another story.

Getting the funds

In recent communications with David B. South, president of Monolithic, Mr. Melosh recounted the process. He began applying for a USDA Rural Development Loan in 2004, long before the actual construction of the domes started and soon learned that CRC had to meet 26 requirements. He got all that information to his USDA Representative, who soon retired, forcing Mr. Melosh to begin again with a new representative.

Then Mr. Melosh learned that the USDA considered Monolithic Domes “exotic construction” that they were reluctant to fund. Information about already constructed and fully operational Monolithic Dome schools that provided what FEMA called “near-absolute protection” from natural disasters and that were both energy-efficient and low maintenance changed that perception. The USDA was particularly impressed with the dome’s ability to survive hurricanes.

So the paperwork and documentation continued. Meanwhile, Florida construction went up in time and money because of hurricanes Francis and Katrina.

Approved, but …

Eventually CRC won a USDA Rural Development loan and purchased land, but were not able to start construction until they completed two plan revisions and got a qualified construction bid within their budget.

Construction began in November 2006, but, according to the USDA, required an onsite inspector that cost CRC an additional $10,000. Other expenses, such as those for the re-documentation of an architect’s feasibility studies began popping up. So, for an additional $3,000 Mr. Melosh hired a financial advisor experienced in USDA loans.

Worth the effort

According to CRC’s website, their “…choice of dome construction grew out of the idea that literacy and thus the library should be central to the school.” Architect Jesse Harris of LPDJ Architects, LLC in Salt Lake City, Utah who designed the facility listened and gave CRC exactly what it wanted.

Mr. Melosh said CRC also wanted a structure that would make a statement, that would provide disaster shelter and that would use energy conservatively.

And he was interested in keeping costs down. CRC’s five Monolithic Domes, built by South Industries of Menan, Idaho, cost between $135.00 to $145.00 per square foot of finished floor space. Currently, the Florida Department of Education considers $186.00 per square foot as a reasonable price for school construction. So CRC realized a 25% savings.

Savings go on

CRC moved into its five new domes just about a year ago and are reporting about a 50% savings in energy use. Best of all, since it’s a non-profit organization, CRC’s USDA Loan has a 4.62% interest rate for 30 years, and payments during the first two years are interest only.

Advice

In an email to Monolithic, Mr. Melosh wrote, "There are two ways in which USDA Rural Development can help with the money issue for construction of a charter school: 1) As a guarantor of a bank loan; 2) As the loan provider. USDA prefers to serve as guarantor rather than provider.

“In the best case scenario, an organization would be able to find a bank that for reasons of need in poor communities would give a loan at a below-market rate (matching the USDA rate) as long as the bank could have the USDA guarantees.

“I think that would decrease the bureaucratic hassles of working with the government. I think it would also save some money by eliminating having to get a separate source (bank) for the construction loan and for the final loan (USDA).

“To obtain either type of USDA assistance, one must demonstrate certain rural poverty need. To get a direct loan, one also has to prove that no local banks will loan for the project; You might also need some luck.

“The major controls placed on the charter school are related to how things can be done. For example, ‘design and build’ or ‘cost plus’ methods were not acceptable. Of course, finding a contractor who will guarantee a final total price can be difficult, plus the contractor will increase a bid to cover for the risk.

“There are also project bidding rules, etc. that had to be followed. There were multiple other requirements costing money or time, either before obtaining the loan or during construction. For example, before the loan was confirmed we were required to get a specialized financial feasibility study, and during construction, we had to hire a ‘resident inspector.’

“But at the end of construction, the result is worth all the extra effort and extra short-term costs.”

March 16, 2009