HARMONY — The borough's downtown beautification may still be outside the box — but it'll likely be inside a square.

Borough council voted Tuesday to look at using grant funds to make improvements to the town's square at the intersection of Main Street and Mercer Road, rather than beautifying or upgrading the borough's sidewalks.

Questions remained about how the borough will fund some $167,000 to match the state grant.

Both project options were the result of a Feb. 25 meeting in which community members offered ideas on how to use $167,600 allocated by the state to the borough as part of a joint grant awarded to both Harmony and Zelienople under the Redevelopment Assistance Capital Program. Zelienople received the other two-thirds of the $500,000 grant.

Under the RACP, grant funds must be matched dollar for dollar. That means Harmony would be expected to self-fund $167,600 toward the project should it use every available grant dollar — bringing the total to $335,200, plus any amount it spends over that figure.

Downtown beautificationAs a result of the vote, the borough will ask Downtown Redevelopment Services — a consultant that helped officials design the project — for feasible ways to beautify the town's square, along with cost estimates associated with them.The decision to improve the town square over the sidewalks aims to make the overall project more centralized, rather than spread out throughout the borough. Councilwoman Phyllis Metz said she hopes having the results be centrally visible would demonstrate that Harmony was a good steward of the grant funds.“I think we should centralize it, so everybody notices something happened,” Metz said. “And then, maybe we can generate some more grant money.”Another aspect of the vote was that upgrading sidewalks throughout the borough would yield more limited results as the borough is obligated to add curb cuts to sidewalks when they are upgraded to comply with the Americans with Disabilities Act.While one idea suggested to the borough by DRS early in the process was to gradually turn the Main Street section of the town's square into a pedestrian space, that idea has since been nixed.

Funding improvementsWhile looking at how to use the funds on the square, borough council was split on how to come up with funds to match the grant.According to Councilman Don Sims, the amount is about one-fifth of the borough's annual budget. Contributing that much toward a single project would likely cause an otherwise austere municipality to enter into some form of debt.Council President Greg Such said Harmony currently has no debt, so entering into a loan or bond for the purpose of matching funds would be an unfamiliar experience for the borough.While municipalities have a number of ways to enter into low-interest debt — for example, the Butler County Infrastructure Bank offers 10-year loan terms with a 1.5 percent interest rate subsidy — some council members were opposed in general to entering any debt.“I just try to look at this as running a household,” Councilman Jason Sarver said.Another issue the borough might face during a project is that the state reimburses municipalities for work performed in relation to the grant, rather than granting the money in cash upfront. Because there is a waiting period for remuneration, according to the RACP website, some grantees take out interim — or bridge — loans to fund monthly construction costs.While the RACP website lists land matching — that is, using the assessed value of land directly related to the project — as a possible way of matching the grant, Such said there might be some restrictions that prevent Harmony from doing that.Additionally, the program has restrictions on loans taken out to match the grant. Typically, according to the program website, loans are required to be permanent financing, such as having a minimum term of 20 years. That limitation does not apply to bridge loans that fund monthly construction costs.Taking less grant money than the total amount that has been awarded also has a general impact on the awarding of the grant. RACP projects are required to be at least $1 million, and because the grant was jointly awarded to Harmony and Zelienople, the latter municipality would have to take on more financial responsibility.