City adds $2M to loan for project
Warren City Council held a special meeting on Monday evening primarily to handle documents required for the financing of the wastewater treatment plant and pump station project.
One of the documents approved amends the total amount that the city will be borrowing from the Pennsylvania Infrastructure Investment Authority, also known as PennVEST. City Solicitor Andrea Stapleford explained to council that PennVEST originally awarded the city $24 million in funding $4,508,277 as a grant with the remaining $19,491,723 in the form of a loan.
After bids were opened for the project, Stapleford said it was determined that an additional $2 million would be needed to fund the project. PennVEST, according to Stapleford, approved an extra $2 million in loan funds to the city at its October meeting.
Other action regarding the project included passing a resolution for interim financing. Stapleford said that the resolution clarifies the interest rates for the project, 3 percent assuming the loan is tax-free and 4.5 percent if it is non-tax exempt or the city defaults.
Stapleford said she did not see that “happening for any reason.”
The interim financing totals $2.5 million. A legal notice published in the Times Observer on Oct. 31 says that the city will pay $112,500 in years one through four of the loan and a $2,612,500 payment in year five.
The resolution also states, according to Stapleford, that “we (the city) will pay project costs on an interim basis using the interim financing and (the) sewer fund account until proceeds from the PennVEST loan are received.” Once the proceeds start to roll in, the interim financing will be repaid and the sewer fund replenished.
Councilman Dr. Howard Ferguson asked if any of the documents, which were approved unanimously, are not typical. “It is very standard,” Stapleford said. “The documents are all very typical for what is used with PennVEST and interim financing.”
City officials have estimated construction for the new plant to take approximately three years.
The project will include a new control building, pump system, a lab for testing materials and a sludge dewatering system, a service the city has been contracting out.