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Crafton bond fund to back $8M in projects; Crafton Boulevard grant pending, bond arbitrage rule flagged
Summary
Staff updated the bond tracking sheet to August and said the bond fund will be drawn down by planned projects; staff applied for a Crafton Boulevard streetscaping grant and cautioned that an IRS-style bond arbitrage payback (1.45% threshold) may require a roughly $70,000 rebate next year.
Borough staff told council the bond tracking sheet is reconciled through August, aside from a $3,700 timing discrepancy, and the bond fund will finance about $8 million in infrastructure projects scheduled over the coming year.
Staff said committed and completed projects would leave about $1.4 million in the bond fund by the end of next year. If the borough wins a grant applied for through state channels (staff referenced an application to Chris DiLuzio's office for Crafton Boulevard streetscaping in front of the school), the post-project bond balance would be about $1.1 million.
Staff also flagged a post-issuance bond issue: after five years, if a bond fund earns interest above a stated threshold (presented in the workshop as 1.45%), the issuer is required to remit excess earnings. Staff estimated that the boroughs liability under that rule could be approximately $70,000 next year and said they would account for that in the bond fund budget.
Staff told council they had reached out to the EPA to coordinate drawdowns for two capital projects (the C-20 project and Broadhead) and noted they had not yet received reimbursements for those projects. The bond tracking sheet and a capital costs spreadsheet were updated with Gateway estimates and other current numbers.
No formal action was taken at the workshop. Council asked staff to continue reconciling the bond fund and to return with updates as grant awards and reimbursements materialize.
