Council hears proposal to guarantee PENNVest loan for Altoona Water Authority ozone-treatment project

Council members heard a presentation Monday evening from a representative of the Altoona Water Authority about a proposed Pennsylvania Infrastructure Investment Authority (PENNVest) loan to fund ozone-treatment improvements at the Horseshoe Curve and Kettle treatment facilities.

Jens, speaking for the authority, said the project is a continuation of prior water-system improvements and that PENNVest requires a loan guarantee and a pledge of water-system revenues tied to the authority’s existing lease with the city. Jens said the loan’s principal amount is $9,000,007.50 (a maximum figure), with an initial construction-period interest rate of 1.743% and 2.179% for the remaining term; the ordinance introduced by the council would allow the city to incur lease-rental debt not to exceed $9,750,000 and to guarantee 100% of payments due under the authority’s debt obligation to PENNVest.

City staff and Jens said the maximum principal is a ceiling and that final loan amounts will depend on bids; they said the city historically has reduced maximum figures once final bids are received and recorded with PENNVest.

The ordinance was introduced for first reading by Councilman Beatty; the council did not vote on final adoption at this meeting. Staff asked that any questions be directed to the water authority or to city staff prior to final reading.

What happens next: The ordinance proceeds to a final reading and vote at a subsequent council meeting. If adopted, the city would execute guarantee documents and sinking-fund arrangements described in the ordinance language.