Borough Hall, Water, Sewer Bond Out to Bid Tuesday

As authorized by Phoenixville Borough Council at its Nov. 29 special meeting, a bond with an estimated cost of $10.9 million goes to bid at 11 a.m. on Jan. 10.

The bond includes $2 million for the water fund, $500,000 toward the borough’s sewer costs and $8 million for new borough hall along with costs of issuance for a total of approximately $10.9 million. Council’s meeting on Jan. 10 includes a presentation by Gary Pulcini, financial adviser for the borough, as well as an ordinance to finalize the 2012 bond issue.

At the November special meeting, Finance Director Steve Nease told council that the estimated cost of a new borough hall, to be located at 347 Bridge St., would be $8 million, which would mean a tax increase of 0.71 mill to the general fund to account for the debt service hike.

That amounts to $71 more per year for every $100,000 in assessed value and makes up the bulk of the 0.84 mill tax increase approved for 2012. The total tax increase amounts to 19 percent for this year.

In November, Pulcini reviewed the next steps for the bond issue and told council that a vote to move the bond forward meant an auction on Jan. 10 and a final ordinance that same evening.

“That’s when you’re locked in,” Pulcini said.

Following the auction, which is set at a not-to-exceed amount of $23.27 million including refinanced debt from 2003 bonds, council will vote on the final ordinance at Tuesday’s meeting and then a final official statement will be prepared within seven days and sent to the Securities and Exchange Commission.

Though council still has that one last vote on Jan. 10 regarding the bond issue, Pulcini assured members at the November meeting that council was taking a big step by moving forward then.

With the November vote, council sent the bond issue to the rating companies in New York and began to incur more costs. Council could still change its mind on the bond issue, Pulcini said, but he explained that it would be frowned upon.

“Even though it’s not the official vote to approve the bond issue, you know, you have to understand that you don’t want to float bonds and then on the 10th have council say hold it,” Pulcini said.

He added that “if missiles flew and interest rates went up to 10 percent,” then council changing its mind would be understood, but short of that, he said the November vote was a big step forward for the bond issue.

“This is the time for council to really sort of fish or cut bait so to speak,” Pulcini said.

At the November meeting, council voted unanimously to move forward with the bond issue. At its Dec. 13 meeting, with Councilman Marc Reber opposing and Councilman James Evans absent to finalize execution on the purchase of 347 Bridge St. from 3-D Property Group for $975,000 with a $50,000 non-refundable deposit due by Dec. 30. Closing on the property was set for no later than Feb. 29.

To view the Jan. 10 borough council agenda, visit the borough’s website. To see information regarding today’s bond auction, visit the MuniAuction website.