Infrastructure Bank provides funding for community projects
Since 2018, the county Infrastructure Bank has provided $40 million in low-interest and subsidized loans for 13 projects vital to the economy and health of communities.
Funded by disbursements from fees from Act 13 that the state imposes on natural gas wells, the bank was created with the philosophy to help municipalities and municipal authorities afford long-lasting improvements.
“It really was a philosophy,” said Mark Gordon, the county’s chief of economic development and planning, who administers the program.
The state limits spending of Act 13 money to certain projects, including roads, bridges, and water and sewer projects. If the county had placed its disbursements into the general fund budget and grew to rely on it, the money would have to be replaced every year, Gordon said. But Act 13 money isn’t guaranteed, and the amount counties receive depends on the amount and value of the gas that is extracted from wells in the county, he said.
So the county commissioners and Gordon created the bank to award funding for projects that will produce “lasting dividends in the community,” he said.
Infrastructure Bank loans come with an interest rate of 0.5% and must be repaid in 10 years.
When evaluating loan applications, the bank advisory board tries to determine if the project can be completed, whether it benefits the community, whether it can be completed at the anticipated cost and if the municipality can repay the loan. Loan repayments are placed back into the lending pool.
From Act 13 impact fees collected in 2021, the county received $2.4 million, and municipalities will receive a combined total of a little more than $4 million for a total of around $6.4 million, according to the Pennsylvania Public Utility Commission.
Last year, the county received $1.4 million, and municipalities received a combined total of about $2.5 million for a total of about $3.9 million.
“The board asks questions. Sometimes (municipalities) have to do more homework,” Gordon said. “I go to each site before, during and after. I lead from the front. I’m an integral part of each project.”
Three rounds of loans have been awarded so far, and five or six applications are being reviewed. Successful applicants will be notified before the construction season begins in the spring.
In the first round, four applications were approved. Two were from Butler City and two were from Cranberry Township.
In Butler, the bank loaned the city $470,000 to match funding provided by the state Department of Environmental Protection for the Sullivan Run flood control project and a little over $1 million for new lighting and streetscape improvements on Main Street.
Cranberry Township received a $4.5 million loan for the MSA Thruway project and $1.67 million for several new sewage lines.
Second-round loans included $3.05 million to Zelienople for the second and third phases of the Main Street streetscape project, $2.2 million to Jackson Township for safety improvements on Route 19 and hiking trails, $250,000 to Winfield Township for the reconstruction of Gerner Road and stormwater control improvements, and a little more than $1 million to Cherry Township for the reconstruction of Harrisville Road.
Gordon said Harrisville Road sees a high volume of traffic from employees at Iron Mountain in Marion Township, but the cost of reconstructing the road was well beyond what the township could afford.
The township used the Infrastructure Bank loan to pay contractors and then paid off the loan using a grant from the Commonwealth Financing Authority.
“There is a lot of use of that road. We’ve had complaints for years,” said township Supervisor Dave Mishler. “We knew to fix it would take a fair amount of money.”
He said the township unsuccessfully applied many times for grants to reconstruct the road.
Commonwealth Financing Authority funding created a “Catch 22” situation for the township. Mishler said the authority awarded the grant, but provides it as reimbursement after it inspects and approves the completed project.
“The state won’t give you the grant until they inspect and approve the results, but if you don’t have money, you’re stuck,” Mishler said. “Mark Gordon was tremendously helpful. Without the involvement of the county and people like him, it would not have been done.”
Before the reconstruction, Harrisville Road was made of tar and chipping material, which usually is applied to the surface of asphalt roads to extend the life of the road.
“The road never had a base. For years and years it was just tar-and-chipped. It probably started out as a dirt road years ago,” Mishler said.
The third round of loans included $10 million for the Western Butler County Authority to rebuild the Harmony pump station and loans to Butler Township to build a recreation complex adjacent to the Pullman Center Business Park, to Prospect for the Monroe Street Extension project and Crab Run culvert replacement, and to Chicora Sewer authority for holding tank repairs.
The Western Butler County Authority’s pump station project, the streetscape project in Zelienople, and the Route 19 project in Jackson Township form a cluster of proximal projects.
WBCA manager Autumn Crawford said the authority hopes to be able to advertise for project bids next year if the DEP approves the project and final design can begin.
She said the pump station is the largest one in the authority’s system and the project includes replacing it with a larger pump and installing larger pipes leading in and out of the pump station
The authority looked into state funding, but found the interest rates were higher and loan term was 20 years, she said.
“By using the infrastructure loan process, we were able to make the overall project cost affordable to our rate payers, which was the ultimate goal,” Crawford said.
In Zelienople, the streetscape project is part of an ongoing project that started eight or nine years ago to improve Main Street, said Don Pepe, borough manager.
He said money from several grant and loan programs and from the borough has been used to finance the project, but the infrastructure bank loan was the easiest to obtain.
“The infrastructure bank money was the easiest money to use. We’re very grateful it exists. The infrastructure bank program has been a blessing,” he said.