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New Ken authority accepts $6.7M loan for replacing, extending water lines

| Friday, Nov. 8, 2013, 12:46 a.m.

The Municipal Authority of New Kensington accepted a $6.7 million state loan package on Thursday and approved advertising the project it will finance.

The PennVEST loan package will pay for a major upgrade of old water lines and finance a water line extension into part of Allegheny Township.

Authority Manager Jim Matta said more than 7 miles of water lines along 21 roads in Arnold, Lower Burrell and New Kensington will be replaced.

The locations include Craigdell Road on the Lower Burrell-New Kensington line, Chester Drive in Lower Burrell, Kimball Avenue in Arnold, Sixth Avenue in Parnassus and parts of Freeport Road in Arnold and New Kensington.

Controls at the authority's treatment plant in the Valley Camp area of the city, close to the Arnold line, will be upgraded as part of the project.

Extending the water line into Allegheny Township, which adds about 62 houses along Melwood, White Cloud and Smail roads, will have to be bid as a separate project, said engineer Ed Schmitt of Gibson-Thomas Engineering, Latrobe, the authority's engineers. It will be financed using the same loan.

Matta said he expects the work to be completed by the end of next year.

Schmitt said the financing for the work will not require a rate increase for the authority's existing customers, who number about 15,000 in Allegheny Township, Arnold, Lower Burrell, New Kensington, Plum, Upper Burrell and Washington Township.

The average customer pays about $76 per quarter for water service, Matta said.

The new Allegheny Township customers will be charged a quarterly rate predicted to be in the range of $88 to $103, Matta said. They will be charged a one-time $2,350 fee to tap into the lines.

Authority seeks new lease on life

Before the authority closes on the loan, PennVEST, the Pennsylvania Infrastructure and Investment Authority, wants assurances that the authority will be around to repay it.

“One of the requirements of the loan is that the authority be in existence for the life of the loan,” Jim Matta, authority manager, told the board. “As it is now, the life of the authority extends through Jan. 7, 2032.”

With a term of 20 years, the loan will continue beyond that date.

To remedy that problem, authority solicitor David Regoli drew up a resolution that would keep the municipal authority in existence through 2042.

The authority unanimously approved it on Thursday and will pass it on to New Kensington City Council, which has the power to extend the life of the authority. Matta expects that will happen.

“We probably won't close on the loan until February or March,” he said. “That's why we need it to extend at least a couple of years.”

He pointed out that if the authority has to finance additional projects that require loans, the life of the authority won't present a problem if the resolution is adopted.

As for the project now on the drawing board, Schmitt said he is shooting to have a bid opening by January, award the contract in February or March and be ready to begin when spring arrives.

The authority set the stage for that by seeking bid proposals.

“I think we're going to see some good numbers,” Schmitt told the authority. “The contractors are hungry.”

Under the terms of the loan, the interest rate will be 1.41 percent for the first five years and 2.014 percent during years six through 20, Matta said.

Tom Yerace is a staff writer for Trib Total Media. He can be reached at 724-226-4675 or tyerace@tribweb.com. Staff writer Liz Hayes contributed to this story.

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