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Council approves two interim financing notes to refund 2022 debt and fund water project
Summary
On second reading the Lock Haven City Council approved Ordinance 2026-03 to issue a $1.7 million Series A fixed-rate note to refund a 2022 bond and a $1.5 million Series B tax-exempt drawdown note to finance current wells-and-mains project; M&T Bank was named as proposer.
The Lock Haven City Council on March 2 approved Ordinance 2026-03 on second reading, authorizing two general-obligation interim financing notes to manage near-term cash flow for debt refunding and an ongoing water infrastructure project.
Daryl Peck, the city's finance presenter, summarized the solicitation results: a Series A note for $1,700,000 to refund a 2022 C note and a Series B drawdown note for $1,500,000 to support the wells-and-mains project. Peck said M&T Bank offered the lowest fixed rate for the Series A (3.67%) and also presented a variable-rate option for Series B; the staff recommendation incorporated the bank proposals into the ordinance.
Jennifer Perrin, bond counsel, told the council the ordinance authorizes the issuance of the two general-obligation notes, appoints M&T as paying agent and creates a capital project account for Series B draws. Perrin said the ordinance was updated to include exhibits that disclose maximum exposure as required by the Local Government Unit Debt Act, including the Series B cap of 7.99 percent, and that the closing on the notes is scheduled for March 30 if state approvals proceed.
Peck provided cost expectations: he estimated interest expense on Series A under present assumptions (3.67% fixed) and projected the expected interest on Series B under the variable-rate assumptions based on short-term indices; Peck said assumptions include an expected payoff timeline that would limit interest exposure. Council members asked clarifying questions about drawdown structure, rate caps and the implications of drawing the full Series B amount immediately.
The ordinance was moved, seconded and adopted by roll-call vote. Council directed staff and bond counsel to sign proposals and file required documents with the state, and to return executed closing documents to the bank.
Next steps: city staff will file the ordinance and required documents with the Department of Community & Economic Development and proceed toward the planned March 30 closing pending the 20-day state review.
