Monroeville hears primer on municipal borrowing as public-works project nears decision

Monroeville Borough Council received a presentation Tuesday from Mike McKay, managing director of public finance at Raymond James, introducing options for borrowing to finance upcoming capital projects including a planned Public Works building.

McKay told council, "It's a loan. It's a debt," and explained the practical differences between bank loans and municipal bond issues, while noting the borough's strong credit standing. "Monroeville has the ability to borrow in excess of a hundred million dollars according to the state," he said, summarizing a state borrowing-base calculation he described in the briefing.

Why it matters: Council is preparing a five-year capital plan and an August vote on a capital budget that could include debt. The presentation was an early step to give councilors enough information to decide whether to issue bonds or use cash, and to preserve the borough's favorable credit rating.

McKay sketched key choices: smaller, shorter-term needs are often handled with bank loans; larger, longer-term, fixed-rate financing typically uses municipal bonds. He noted Monroeville’s current Moody’s rating as Aa2 and said that the borough’s low outstanding debt and recently enacted millage changes strengthen its borrowing story for rating agencies. He also explained the state DCED borrowing-base framework used to compute theoretical capacity and said the borough’s calculation produced an amount "in excess of a hundred million dollars," though he cautioned that is not an endorsement to borrow that full amount.

Councilors asked for concrete examples. McKay presented a scenario commonly used in planning: a $30 million bond issue amortized over 25 years at roughly 4.79 percent would raise the borough’s net annual debt service compared with current budgeted debt; he said the example would add about $700,000–$800,000 in annual payments once older debt drops off. He emphasized municipalities can refinance when market rates change and that there are typical cost-of-issuance and prepayment considerations.

Mayor Griesock and borough staff framed the talk around the Public Works building decision. The mayor said the borough is aiming to present a firm first-year cost in August and that the remaining four years of the plan will be refined annually. Council members pressed staff to produce near‑final project cost estimates and to include borrowing scenarios that preserve the borough’s credit rating.

No formal financing decision was made. Council directed staff and its financial advisors to continue developing detailed cost estimates for the Public Works options and to return with recommended financing paths before the August capital‑budget vote.