Macungie Needs $1 Million—Where Will it Come From?
The borough's three capital projects require about $1 million. Borrowing options will be presented April 1.
The borough of Macungie is seriously considering taking on three big projects for which it will need serious financing.
It is already committed to the construction of Lumber Street which is already the site of the partially constructed Devine School.
The other two projects include a traffic study and the probable installation of a traffic light at Church and Main streets and the reconstruction of Cotton Street.
Together the projects will cost about $1 million, and borough council has agreed to consider financing all three projects at one to avoid having to do it three separate times, possibly under duress or when rates are not as favorable as they are right now.
To guide them them through the process council has hired Gary Pulcini of Valco Capital Ltd, a specialist in municipal financing, according to Borough Manager Chris Boehm.
Pulcini will hold a workshop to outline the borough's financing choices at 6:30 p.m. April 1, immediately preceding the next coucil meeting.
Options include loans and bonds, and withing those options, Boehm said at council's Monday meeting, are several term variations including length of repayment times.
For example, taking out a loan for $1 million will cost the borough $61,000 per year if it chooses to repay over 20 years; $73,000 if it chooses a 15-year repayment plan, or $100,000 a year for repay a loan over 10 years.
Pulcini will present general numbers at the workshop and take questions from council members. He will compile more specific numbers as per council's instructions on April 1 that will be presented at the April 15 council meeting.
The borough's other option is to issue a bond, Boehm said. Bonds have higher fixed costs but lower interest rates. Loans have lower fixed costs but higher interest rates.