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City to introduce ordinance for $6 million financing package for two sewer/water projects
Summary
An attorney for the financing group told the Frostburg City council a proposed ordinance would authorize up to $6 million in financing for two sewer/stormwater projects, with up to $3 million available as loan forgiveness; the ordinance will be introduced for first reading and set for public hearing at the next council meeting.
Anna, an attorney at Labara Woods, told the Frostburg City council the package before them would fund two projects to remove combined sewer and stormwater infrastructure. "What is before you in ordinance in order to approve a financing in the amount of $6 million," Anna said, adding that "we're approved for 3 million of loan and 3 million of loan forgiveness, but we don't have to go that high."
The financing structure described by Anna ties loan forgiveness and reimbursements to project draws: the city will spend project dollars, then apply for reimbursement from the Maryland Department of the Environment. Anna said the final interest rate will be set closer to closing and that the loan agreement includes the formula for determining that rate. She also said the city would not be obligated to repay the full $3 million forgiveness amount if it does not draw that much in bonds.
City staff said the ordinance will be presented for first reading at the upcoming council meeting and scheduled for a public hearing thereafter. Councilmembers asked procedural questions and staff confirmed required public notices will be posted at least twice before the hearing.
Why it matters: the package funds capital work intended to reduce stormwater and combined-sewer overflows, a long‑standing infrastructure priority for the city. The ordinance introduction begins a formal public process that will include additional detail on project scopes, repayment terms and any conditions attached to using the forgiveness funds.
Next steps: staff will finalize the loan documents and return the ordinance for first reading at the next council meeting; a public hearing will follow in May when the council will consider adoption.
