A low-interest loan awarded to the Abington Regional Wastewater Authority on Tuesday will save the authority more than $1.5 million and allow it to move forward with the estimated $34 million project to upgrade the treatment plant.
At a meeting in Harrisburg, the Pennsylvania Infrastructure Investment Authority approved a $9.7 million loan - nearly 30 percent of the project's cost - to the wastewater authority, which serves Clarks Green, Clarks Summit and South Abington Twp.
The loan, which carries an interest rate of 1 percent for the first five years, will save the authority $1.7 million in interest during the course of the 20-year term, according to the authority's financial consultant, Christopher Gibbons.
The interest rate for the remaining 15 years is 1.868 percent.
Just as important, authority Chairman Donald Snyder said, the loan provides the authority with the financial stability it needs to "confidently move forward on the project" - one that has been in the works since 2008.
"We were very fortunate to get a pretty substantial loan, because there was no guarantee," Mr. Snyder said. "It will certainly help us out in the long run and will likely save residents money in sewer rates."
The authority will hold a special meeting Oct. 30 at 6:30 p.m., when it will vote to adopt next year's budget - which includes the monthly sewer rates residents in the three communities will have to pay.
This year, included in their sewer bills, residents paid the authority $29.47 a month per equivalent dwelling unit - a figure that will likely increase in the upcoming years as the authority works to pay off the loans.
South Abington Twp. sewer users pay $120 a quarter, while Clarks Summit sewer users pay $43 a month and Clarks Green sewer users pay $41 a month.
"This will certainly help to defray the costs a little bit for our residents," said South Abington Twp. Supervisor David O'Neill, who recently noted he wouldn't be surprised if the township's rate jumped to $180 a quarter by 2015.
Also at the special meeting, board members will discuss how they plan to cover the remaining $24.3 million.
"We will look at our different options, including bank loans and bond issues," said Robert Davis, executive director of the wastewater authority. "Right now, we are just happy we got this (Pennvest) loan. You always want more, but this was a good amount."
Board members said they plan to advertise the project within the next several weeks. Construction is scheduled for April.
The multimillion-dollar project is designed to bring the treatment plant into compliance with a federal mandate meant to reduce pollution that eventually ends up in the Chesapeake Bay.
"This was a big day for residents in the Abingtons," Mr. Davis said. "We are very fortunate."
Contact the writer: miorfino@timesshamrock.com, @miorfinoTT on Twitter