Hagerstown declares intent to reimburse wastewater plant costs, cites preliminary $17M MWIFA loan
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Summary
Council approved a resolution declaring the city's reasonable expectation to reimburse WWT plant improvement project costs from future bonds or interim financing and directed staff to work with bond counsel; at the meeting MWIFA was cited as having preliminarily approved up to $17 million for the project.
The Hagerstown mayor and city council on March 24 approved a resolution evidencing the city's reasonable expectation to reimburse certain expenditures for the wastewater treatment (WWT) plant improvement project from proceeds of future general obligation bonds or interim financing.
Council member (speaker 11) presented the resolution and told the council that the Maryland Water Infrastructure Financing Administration (MWIFA) has preliminarily approved a loan to the city of up to $17,000,000 for project purposes; an additional $3,000,000 taxable loan option was also mentioned during remarks. The resolution as approved preserves the city's ability under federal tax code rules to use proceeds of borrowing for reimbursement of expenditures paid prior to closing but did not itself authorize any borrowing.
The council directed staff to work with the city's bond counsel to develop authorizing legislation and other needed documents in preparation for borrowing, noting that formal borrowing authorization will be undertaken by separate legislation in accordance with applicable law. The transcript records the preliminary loan figures and staff direction but does not provide final loan terms, interest rates, or an approved borrowing ordinance.
A city official read that MWIFA's interest on the expected loan was anticipated to be tax-exempt for federal income tax purposes; the council emphasized that the resolution preserves reimbursement options rather than committing the city to a specific lender or final financing package.
Next steps identified in the meeting record: staff work with bond counsel on necessary authorization documents and return to council with legislation to authorize borrowing if and when the city elects to proceed.
