Questions over the merits of issuing $4.5 million in bonds for items that may only be around for a few years were resolved before the Township Council voted to adopt the ordinance that triggered the discussion.
The bond ordinance was introduced in August, and a public hearing began on September 7. But the council extended the public hearing into its meeting on September 13, and then adopted it on September 20, a week after the council heard from its assistant chief financial officer, John Mauder, about the life of the bonds.
Mauder explained at the agenda session on September 13 that under state law, a municipality is not permitted to bond or borrow money passed the weighted average for the items in the bond.
The bond covers a list of capital improvements — most notably a list of upcoming road reconstruction projects — that are estimated to last, on average, nearly 12 years (despite some of them having lower life expectancies). Some council members and residents criticized approving bonds that could potentially burden the taxpayers years into the future and long after their life expectancies.
The bond ordinance — a follow-up to the adoption of the township’s 2010 municipal budget — is for $4.7 million, but the township will issue $4.5 million in bonds or notes for the capital improvements, if passed. The township is expecting $225,000 in grants from the state Department of Transportation.
According to Business Administrator Robert Hary, Mauder explained that because the weighted average life expectancy of the items in the bond was 11.79 years, the township couldn’t issue a bond that went beyond that time period.
The bond ordinance includes funding for the decommissioning of the Duck Pond Run pump station. The bond ordinance also includes the annual funding toward the township’s road improvement program.
Smaller Bond Ordinance Approved The Township Council adopted a separate $1.17 million ordinance on September 20 that would fund road improvements on Meadow, Penn Lyle, and Alexander roads.
In the ordinance, $878,635 is set aside for Meadow Road, while $274,820 and $13,925 is set aside for Penn Lyle and Alexander roads, respectively. According to the ordinance, the township already has the funds for the work set aside in a trust account called “Off Tract Road Assessment.”
