Lock Haven council awards Old Dam Phase 1 contract, advances interim loan package and PennVEST ordinance on first reading

Lock Haven City Council voted July 11 to award Phase 1 of the city’s Old Dam project to Francis Palo Inc., Clarion, Pa., for $4,243,000 and advanced a financing plan that pairs short-term drawdown notes with a PennVEST low‑interest loan to fund the broader project.

The council’s action followed a presentation by city staff and the city engineer explaining that Phase 1 work consists of installing a parapet wall required by the project’s engineering design. The low bid from Francis Palo Inc. was read into the record at $4,243,000. Staff said the construction cost will be repaid from the $5,000,000 PennVEST award the city has been offered, and the council approved the contract by roll-call vote.

Council also reviewed and approved a recommended interim‑financing plan comprised of three separate drawdown notes intended to cover ongoing contract payments, preliminary design and engineering, and to refinance an outstanding 2018 note. The recommended notes are: Series A, $1,500,000 (two‑year term); Series B, $1,300,000 (one‑year term); and Series C, $1,700,000 (about a 3½‑year term). Staff reported that Jersey Shore State Bank submitted the lowest fixed‑rate proposals in the solicitation packet (reported packet rates: Series A 2.21%; Series B 2.11%; Series C 2.37%) and recommended those offers be incorporated into the ordinance the council will consider for final action on July 25.

A city financial advisor briefed the council on the mechanics: the interim notes are structured as drawdown, prepayable loans so the city pays interest only on funds actually drawn and can prepay without penalty. The advisor also reviewed a separate refunding resolution (Resolution No. 2022‑27) intended to authorize interim notes and permit later reimbursement to the general fund; council approved that resolution on the same evening.

Several council members asked about projected shortfalls related to the project budget; staff repeatedly said a contingency and a separate account would be established to cover a recorded shortfall figure discussed in the meeting (figures mentioned in the discussion included $68,048 and a $150,000 contingency set‑aside). Staff emphasized that the final financing ordinance and formal loan documents would include exact exposure limits and repayment mechanics. Council members then voted to approve incorporating the recommended bank proposals into the ordinance and to move the ordinance forward for final action on July 25; the roll‑call votes recorded all members present voting yes.

What’s next: The city will return the ordinance for a final vote at its July 25 meeting, at which time staff expects to present the formal loan documents and finalized ordinance language. If approved, the combination of interim notes and the PennVEST loan will fund construction and related work on the Old Dam and associated well/main projects.

Provenance: Topic introduced SEG 107; last related discussion and motion recorded SEG 566.