Derry Township Municipal Authority bond issue saves money, funds project
NEW DERRY -- The Derry Township Municipal Authority is on track to save more than $179,000 by refinancing bonds originally issued in 1992 and 2001. Taking advantage of current low interest rates, the authority board on Wednesday approved the refinancing as part of a $4.4 million package that also includes $1.5 in new bonds issued to help finance extension of sewage service to 77 households in the Derbytown area of the township.
Consultant Alisha M. Phillips of Janney Montgomery Scott told the authority the average interest rate paid on the bonds will be just over 3 percent, compared to the 6.4 percent that had been paid on those originally issued. The bond issue is set to close on June 20, and final debt service payments are scheduled in 2032, she added.
Authority Manager William Chishko said, in addition to saving the authority some money and providing funds for the Derbytown project, the combination of refinancing and new bonds will simplify budgeting of the debt service -- with one schedule of payments instead of two. "All three of those goals are being accomplished," he said Wednesday.
Authority bond counsel Lisa Chiesa of Thorp, Reed and Armstrong pointed out that the favorable bond terms have kept the debt payments at existing levels, avoiding any need to raise customer sewage fees to cover the additional financing.
Chiesa reported she received word earlier Wednesday that the state Department of Community and Economic Development had approved Derry Township's guarantee of the bond issue, which helped in obtaining better interest rates.
The bonds that are being refinanced originally were approved to help pay for sewer extensions serving the communities of Kingston, Oaklawn and Elmadale.
The cost of the Derbytown project, which includes installation of a pump station, has been estimated at $2.3 million. The proceeds of the bond issue are to be matched with a $1 million grant from Pennsylvania's H2O program to help fund the Derbytown project.
Chishko expressed hope the project will be ready to go to bid by early fall with completion of construction targeted about a year later.
Also at Wednesday's meeting, the authority approved a requisition of $232,326.65 to cover initial costs associated with development of public sewerage in New Alexandria. That $9 million project, which has been planned for more than a decade, officially got under way Tuesday with a groundbreaking ceremony.
Authority engineer Ed Schmitt, of Gibson-Thomas Engineering, said the requisition includes $219,141 for the sewer line contractor, Continental Construction Inc. of Ridgway, $10,885.65 for Gibson-Thomas' contractual fee; and $2,300 in reimbursement for the engineering firm's permitting costs.
Chishko explained Continental has cleared stone fill and vegetation from around a previously bored crossing that will carry a sewer main underneath Rt. 22.
Schmitt said the New Alexandria project budget includes about $330,000 to address storm water in the area to be served. In some areas, he noted, the new sanitary sewer lines will be installed above existing storm lines.
His said his firm, working with the local conservation district, has recommended the creation of contoured swales rather than installation of pipe to direct storm water more economically along some streets. He acknowledged that plan will require the cooperation of property owners since rights of way the authority has obtained pertain only to installation of sanitary sewers, not storm sewers.
In downtown New Alexandria, Schmitt said, permeable asphalt that will allow water to drain through is being recommended on some major alleys and parking areas.