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Five-year interest forgiveness ends; borough faces higher firehouse loan payment
Summary
The borough’s temporary interest-rate forgiveness on the firehouse loan expires this year, and payments will revert to a higher amortization schedule; council discussed options including renegotiation, a bond or North Londonderry paying its share.
Palmyra Borough officials were told the five-year interest-rate forgiveness on the new fire station loan has ended and the borough will revert to its original amortization schedule, increasing annual payments.
Staff said the borough has paid about $75,000 on the loan during the forgiveness period but that the annual payment will rise to roughly $129,000 under the original terms. The original loan rate was about 4.5 percent, which staff said is lower than many current market rates; borough negotiators have spoken with Jonestown Bank but do not expect substantial concessions, though even a small reduction would help.
Council discussed other options raised in the meeting, including whether the borough could issue a bond or whether partner North Londonderry Township would pay its outstanding share to reduce the borough’s burden; staff said if North Londonderry pays it would need to change the loan agreement and that the township offered to cover the administrative costs of any agreement change. There was no formal motion recorded at this meeting to change the agreement.
Officials said the loan’s final payment schedule runs through 2045 and that the borough may need to adjust the fire tax rate to cover higher payments. The council did not take a formal vote on rescoping the loan at this meeting but directed staff and township partners to continue discussions.
