Council committee clears PENNVEST loan offer for replacement of 108 lead service lines
Loading...
Summary
Mayor and finance staff presented a PENNVEST funding package that combines a $953,206 grant with a $756,132 30‑year loan at 1% to replace 108 known lead service lines; the loan would be repaid from the water enterprise fund and staff said the project was in the capital plan.
Lancaster City officials told the finance committee on Nov. 3 that the city has an award offer from the Pennsylvania Infrastructure Investment Authority (PENNVEST) to finance a project to replace 108 known lead water service lines.
Director Tina Campbell and municipal finance adviser Daryl Peck of Concord Public Finance described the package: PENNVEST offered a $953,206 grant and a $756,132 loan for a total project cost of roughly $1.7 million. Peck said the loan term would be 30 years at a fixed interest rate of 1 percent and that there is no prepayment penalty.
“This is the water fund. So this is the enterprise fund,” Campbell said, adding that the project was included in the 2026 capital plan. Peck summarized the estimated debt-service trajectory: interest-only payments (roughly $6,700) in the first year and then modest annual principal-and-interest payments beginning in 2027, reaching about $29,185 annually for most of the term.
Staff said PENNVEST suggested applying for smaller tranches of funding as the city proceeds to replace additional lead lines so the city can compete for grant funding in multiple rounds. The project timeline in the presentation called for bidding and award in December, closing the PENNVEST financing in mid‑January and construction in 2026 with completion in 2026.
Councilors asked routine implementation questions, including whether there is a prepayment penalty (staff said there is not) and whether the projected debt-service was already included in the capital budget (staff said the project was part of the capital plan and the water fund would absorb the loan repayment).
The committee voted to move administration bill 13 to the full council meeting on Nov. 11 for ordinance readings and final action.
