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Washington Township Boulevard loan to be paid off with borrowed money

Move would extend loan, lowering annual loan payments

December 20, 2010|By JENNIFER FITCH | waynesboro@herald-mail.com

WAYNESBORO, Pa. — After more than an hour of discussion, the Washington Township (Pa.) Supervisors on Monday approved borrowing with Susquehanna Bank to pay off an existing loan for Washington Township Boulevard.

The supervisors agreed to borrow at 3.5 percent to pay off the $1.6 million balance of a Pennsylvania Infrastructure Bank loan. The move to Susquehanna Bank would extend the loan to 15 years, lowering the annual payment.

Township Manager Mike Christopher said he was prepared to make the $299,000 payment due in April to Pennsylvania Infrastructure Bank. He said early budget projections show money would be available for only part of the 2012 payment.

"2011 we're covered. 2012, 2013 we're not," Christopher said.

The Susquehanna Bank loan will lower the payment to approximately $160,000 a year. Supervisor Jeff Geesaman said the intent is to make payments using impact fees from developers, but that fee revenue dried up when the economy soured.

In addition to the $1.6 million refinancing, the supervisors took action to establish a $600,000 line of credit with Susquehanna Bank. They discussed using that money to extend Washington Township Boulevard, a relief route, from Old Forge Road to Country Club Road.

"It'd still take a vote of the board to pull out that money for whatever it'd be used for," Geesaman said.

"I can't think of a compelling reason to spend that money," Supervisor John Gorman said.

Old Mill Road resident Wayne Fry said he believes extending the road only benefits developers.

"No one is going to go off (Pa. Route) 16 and go on Old Forge Road to go to the country club," Fry said.

Gorman said the relief route would serve traffic coming from the north and give motorists various options for reaching Pa. 16.

The vote to borrow from Susquehanna Bank was 4-1, with Supervisor Carroll Sturm voting "no."

"Stretching it out, we're going to be paying more interest because we'll be paying less each year" over more years, Sturm said.

He also said he thought the money for the Pennsylvania Infrastructure Bank payments might be found through further belt-tightening.

"We've looked at this budget very carefully," Supervisor Stephen Kulla said.

Any further cuts would affect the level of services, including those offered by the police department, Christopher said.

In other business, the supervisors approved their 2011 budget. It includes a $52 local services tax that is new to the township. That tax replaces the $10 occupational privilege tax.

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