Lock Haven council advances debt ordinance to finance water-system projects
June 16, 2023 | Lock Haven, Clinton County, Pennsylvania
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Lock Haven — The city held a second reading and moved forward on a debt ordinance to issue two drawdown notes to finance water-system improvements and related refinancing.
A city finance presenter told the council the proposal splits borrowing into a Series A note totaling $2,000,003.24 to cover city-only projects (wellfield land, easements, Zindel Park bridge engineering and construction) and a Series B note of $1,326,000 to be shared with the Central Clinton County Water Filtration Authority and the Suburban Lock Haven Water Authority. The presenter said the city solicited offers from 33 banks; Kish Bank provided the most favorable all-in proposals highlighted in the financing packet.
Bond counsel Jennifer Caron of Eckert Stevens reviewed final ordinance edits and procedural steps. She said the ordinance appoints Kish Bank as paying agent, designates the notes as tax-exempt bank-qualified obligations under the Internal Revenue Code, and pledges "the city's full faith credit and taxing power" for repayment. Caron also said legal notice required under the Local Government Unit Debt Act was published and that the closing was scheduled for July 19, subject to Department of Community and Economic Development approval within 20 days.
On pricing, the presenter said Kish Bank offered a Series A fixed rate of 4.27% for the first seven years with a variable rate thereafter capped at 5.5% (a worst-case blended rate shown at about 4.733%). For Series B the presenter reported a 4.23% initial rate with the same seven-year fixed period and 5.5% cap (worst-case blended 4.716%). The council was told both notes were for 20-year terms. The presenter also showed projected budgetary impacts: the Series A full impact coming in 2025 of roughly $189,000 and the combination of new and existing shared debt service arriving at a total impact in the range of $333,000 annually in the illustrative schedule.
Council members asked for clarifications about ordinance language and project-account wording. One council member requested a reading of Section 19(c) and noted the paragraph's syntax could be cleaned up; counsel said the wording is longstanding boilerplate but recorded the concern for later revision.
Next steps: the ordinance authorizes the notes and the staff team and bond counsel said they would finalize closing documents and file required materials with the Department of Community and Economic Development; the council also appointed members to a water-rate subcommittee to review a related 10-year rate study.
A city finance presenter told the council the proposal splits borrowing into a Series A note totaling $2,000,003.24 to cover city-only projects (wellfield land, easements, Zindel Park bridge engineering and construction) and a Series B note of $1,326,000 to be shared with the Central Clinton County Water Filtration Authority and the Suburban Lock Haven Water Authority. The presenter said the city solicited offers from 33 banks; Kish Bank provided the most favorable all-in proposals highlighted in the financing packet.
Bond counsel Jennifer Caron of Eckert Stevens reviewed final ordinance edits and procedural steps. She said the ordinance appoints Kish Bank as paying agent, designates the notes as tax-exempt bank-qualified obligations under the Internal Revenue Code, and pledges "the city's full faith credit and taxing power" for repayment. Caron also said legal notice required under the Local Government Unit Debt Act was published and that the closing was scheduled for July 19, subject to Department of Community and Economic Development approval within 20 days.
On pricing, the presenter said Kish Bank offered a Series A fixed rate of 4.27% for the first seven years with a variable rate thereafter capped at 5.5% (a worst-case blended rate shown at about 4.733%). For Series B the presenter reported a 4.23% initial rate with the same seven-year fixed period and 5.5% cap (worst-case blended 4.716%). The council was told both notes were for 20-year terms. The presenter also showed projected budgetary impacts: the Series A full impact coming in 2025 of roughly $189,000 and the combination of new and existing shared debt service arriving at a total impact in the range of $333,000 annually in the illustrative schedule.
Council members asked for clarifications about ordinance language and project-account wording. One council member requested a reading of Section 19(c) and noted the paragraph's syntax could be cleaned up; counsel said the wording is longstanding boilerplate but recorded the concern for later revision.
Next steps: the ordinance authorizes the notes and the staff team and bond counsel said they would finalize closing documents and file required materials with the Department of Community and Economic Development; the council also appointed members to a water-rate subcommittee to review a related 10-year rate study.
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