Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Municipal Finance topic
No spam. Unsubscribe anytime.
Columbia council adopts ordinance authorizing $5.03 million BIOS loan; repayment schedule based on sale assumptions
Summary
Council voted to adopt Ordinance 9-62 to enable borrowing under the borough's BIOS funding package. Solicitor staff said state debt-law procedures required a formal amortization schedule, so the ordinance assumes phased repayment tied to future property sales.
Columbia Borough Council on July 15 adopted Ordinance 9-62 to authorize a $5,028,030 loan portion of the borough's BIOS funding package and to comply with state debt-proceeding requirements.
The ordinance, approved by a motion from Councilperson Stahl and seconded by Councilperson Fisher, passed with the council voting in favor; the mayor will sign the ordinance on Monday. Legal staff explained the ordinance had to include a formal repayment schedule to satisfy state review even though council's intent is to repay most or all of the loan from project proceeds or property sales.
Evan, a staff member who presented the ordinance language, said, "anytime the borough increases its indebtedness, you have to do what's called a local government unit debt act debt proceeding" and that the state reviewers required an amortization schedule rather than a one-time repayment assumption. Evan told council he had assumed, for the schedule, a $1 million sale of property early in the project and repayment of the remainder over the loan's 19- to 20-year life to create a conservative repayment plan for the statute's purposes.
Council and members of the public pressed for clarity on how much of the BIOS project cost the borough would ultimately carry. Evan said the total BIOS project estimate on the record is about $10.52 million and that the loan portion proposed in the ordinance represents roughly 60% of the BIOS funding award (about $5.03 million). He also said the borough's long-term debt now mainly consists of a refinanced general obligation bond with an outstanding balance around $7.04 million.
A resident, Kyle Ricker, asked whether the loan funds would be used to ready property for sale rather than to pursue further development; Evan and other staff said the current plan is to use the remediation funds for site completion and repositioning for sale. Evan noted the loan is a reimbursement loan and interest does not begin accruing until either property sales commence or five years after closing, whichever comes first.
The council adopted the ordinance at the meeting and directed staff to obtain the mayor's signature. No separate vote was taken on related budget appropriations at the meeting.
Background: the BIOS funding discussed at the meeting is a mix of grants and a loan award the borough is using to fund remediation and initial infrastructure work on the referenced project. The ordinance language reflected a repayment assumption required by the state financing authority for its review and closing process.
Looking ahead: council members said they expect to return to the topic as project phasing, sales prospects and actual expenditures become clearer.
