Firehouse loan payment to rise as interest forgiveness ends, officials say

Borough officials told council that the five-year interest-rate forgiveness on the loan for the new firehouse has ended and the scheduled payment will revert to the original amortization, significantly increasing the borough’s annual debt service. Roger, the borough representative for public-safety finance matters, said the borough has paid about $75,000 on the loan during the forgiveness period; when the forgiveness ends the annual payment will rise to about $129,000. Officials said negotiations with Jonestown Bank have been discussed but the original loan rate (about 4.5% when issued) is already lower than current market rates, so substantial concessions are unlikely. Council members discussed alternatives. Roger said North Londonderry Township has suggested paying their share of the loan balance; that option would require changing the loan agreement and North Londonderry would cover related legal costs. Councilors also discussed bonding and tax-rate adjustments; one councilor noted the borough may have to increase the fire tax rate to cover the higher payment. Why it matters: The higher annual payment will pressure the borough’s fire protection fund and potentially require adjustments to the fire tax rate or other budget changes. Next steps: Officials continue to negotiate with the lender for any relief and will return with more detailed proposals. Council also noted potential options if North Londonderry confirms a willingness to alter the agreement and pay their share.