Lancaster seeks PennVest loans for lead-line replacements and to advance 8-mile water main project; committee moves applications forward

City staff told the public works committee on April 1 that Lancaster will apply to the Pennsylvania Infrastructure Investment Authority (PennVest) for low-interest financing to cover a package of water projects, including a targeted lead service line replacement application and steps to advance a large-diameter transmission main replacement.

Director Tina Campbell said one PennVest application (Resolution 27-2025) would seek $1,709,338 to replace about 108 suspected lead water service lines the city has identified. "This represents approximately 108 lead water service lines," Campbell said. City staff described per-service-line costs in a range of about $6,000 to $20,000 depending on excavation, stonework and sidewalk restoration. The city said it has currently confirmed roughly 25–27% of its suspected internal lead lines and expects a machine-learning upload in the coming months to increase coverage to roughly 60–75% of lines for planning.

Campbell and other staff emphasized that, for this program, PennVest applications are written as loans even where grant funding may be available. City staff said they will pursue available grant components for lead-line replacement but must submit the application as a loan request to be considered for PennVest funding.

On the larger transmission main project, staff described a multi-phase, roughly $41 million effort to replace aging steel mains that bring water from the Susquehanna Water Treatment Plant to Oyster Point Reservoir and then to the distribution system. City staff said the line supports about two-thirds of the system’s customers. Because some materials and equipment are on constrained supply timetables, the city is considering short-term interim bank financing (approximately $27 million) to purchase materials and begin phases of the work; staff said any short-term financing would be refinanced later by PennVest if the PennVest application is approved. The city also has a $3 million grant tied to the project with a deadline that factors into timing decisions.

Committee members asked about budgetary impacts and who will pay the debt service. Staff said the borrowing is intended to be as low-cost as possible (PennVest provides lower rates than bond financing) and that debt service for utility capital projects is typically paid from the relevant utility fund and recovered through rates subject to Public Utility Commission (PUC) review for customers outside the city.

Councilors and members of the public asked several follow-up questions about targeting neighborhoods for lead-line work, how neighborhoods are selected, the possibility of applying for additional rounds later, and the program timeline. Staff said they believe PennVest funding, if awarded, could be available in early 2026 and that state rules currently require replaced lines to be identified and removed within about ten years unless policy changes. The public works committee voted to forward the PennVest application resolutions to full council for consideration.

The committee’s action advances three related PennVest resolutions (applications): the lead-line replacement application (approx. $1.709 million for ~108 lines) and two additional resolutions related to the large transmission-main project and interim financing; staff said final award amounts and loan terms will depend on PennVest and other funding outcomes.

Sources: Public works committee discussion, April 1, 2025; Director Tina Campbell (city water/sewer planning); committee Q&A and motions to move PennVest-related resolutions to full council.