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The Art on the site is by Jack Fatzinger

Council Meeting Minutes

IMPORTANT NOTICE

After meeting with DEP last week, we have addressed the few details necessary for final approval of our Part II Construction permit which allows us to begin seeking financing.

The estimated cost of design, permits, construction, and decommissioning of the existing plant is 2.8 million dollars. The principal balance on the existing Waste Water Treatment Plant is $741,520 at 3.2% interest. That rate increases to 4.66% in 2024 thru the year 2044.. Adding the two, the debt service to be financed is 3.6 million dollars. The Borough will pay an additional yearly usage fee to Easton Sewer Authority of $89K .

Because of the two zip codes in the Borough, the Census, as it relates to household income, is skewed upward to show an average income of $86k per household which makes us ineligible to participate in the median household income survey.

However...as luck would have it, the Borough is applying for a grant recently made available from Pennsylvania H2O. This project is considered high priority by DEP, who’s goal is to regionalize all independent treatment plants. This is a big plus for us. Applicants are eligible for up to one million dollars with a 50 50 match, which “could” reduce our debt service, optimistically, by one million dollars. More realistically, we are in a very good position to
receive some portion of the H2O Grant allotment.

There are several options from which to secure additional financing.
1, PENNVEST, Pennsylvania’s low cost financial assistance for water and waste water projects, will have a fixed rate of interest between 2% and 3% depending on the project costs and funds available at the time. PENNVEST will not allow an existing loan balance to be wrapped into the loan.

2, Local Banking Institutions with rates of at least 4% with a step-up interest rate on long term loans.

3, A Bond Issue with an average fixed rate of 2.95% on a 25 year bond and 3.05% on a 30 year bond. With a bond, the existing debt can be incorporated into the loan and the interest is fixed for the life of the bond. The annual audits and reporting documents are minimal compared to those associated with a PENNVEST loan.

We are researching all options with the ultimate goal of structuring a loan around the current resident’s ability to pay by avoiding a large monthly increase. Securing a shorter term loan to achieve a lower interest rate puts an unfair burden on current residents. Whereas, extending the length of the loan increases the total amount to be repaid but reduces the payments to a more acceptable level. This sewer connection will service the Borough for many years to come and therefore the loan should be structured to include future generations in it’s repayment.

In conclusion, we await a decision on the H2O grant awards which will dictate how much we will finance and under which terms. Grant awards are expected in mid January 2020.

When financing is secured, the project will be bid and construction could begin in mid summer of 2020. There’s a lot here to absorb. If you have questions, please feel free to ask.

Borough Council

 

 

 

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