The 'pooling' arrangements for loans could save municipalities money.
By VIRGINIA ROSS
NEW CASTLE, Pa. -- Lawrence County officials are looking at forming a partnership with several municipalities to borrow up to $20 million for various capital improvements.
County commissioners, at their caucus on Thursday, said they would like to know how many municipalities are interested in pursuing the effort -- which is being spearheaded by the county municipal authority -- and how much money each of those municipalities would like to borrow.
School districts and other government entities may also participate.
Jim Gagliano, municipal authority director, said he has approached several municipalities already and he intends to work with them to determine each of their financial needs.
Under this arrangement, the county and participating municipalities, working as a unit, could take out one loan for a larger amount of money, rather than borrowing smaller amounts individually.
Doling out funds
The borrowed money would be disbursed to participants according to how much each originally requested. Each participant would be responsible for paying its own share of the loan.
The money would be used for projects such as sewer and water treatment programs.
Atty. Thomas W. Trimm of Pittsburgh, who has been advising Gagliano, told commissioners that he helped organize a similar effort in neighboring Washington County several years ago that has been very successful and economical.
On Thursday, commissioners said the county is looking at borrowing several million dollars. They also said they will make a final decision on whether to borrow the money once they receive feedback from other potential participants.
Gagliano said the city of New Castle has expressed an interest in joining the pool and borrowing $7 million for several projects and to pay off some of its debt. Neshannock Township is looking to add $3 million to the loan.
"Basically, the more you borrow, the lower the interest rate and other costs associated with a loan," Gagliano said.
"You save on paperwork and other costs. By working together, we could cut costs dramatically."
Gagliano and Trimm said the current fixed interest rate is about 4.5 percent. Floating interest rates could be even lower, they added.