BETHLEHEM TWP., Pa. — Bethlehem Township Board of Commissioners on Tuesday approved borrowing $2.71 million for much-needed improvements for public stormwater facilities.
Taxpayers won’t have to worry about any increases.
The board authorized the township manager to advertise an ordinance for the loan for construction, alteration and improvements to township public stormwater facilities.
Commissioners President John J. Merhottein said the project will help mitigate flooding around Walnut Street and Willow Park Road.
Construction is targeted to begin in late 2024.
Originally, the project was estimated at $4.7 million, but a low bid of $3.4 million was accepted.
“The township Municipal Authority is the one that is tasked with dealing with our stormwater as well as our sanitary sewer system, and the township backs it sort of as a guarantor for the Municipal Authority's debt, but we will not be using taxpayer money to repay the loan."Bethlehem Township Board of Commissioners Vice President John K. Gallagher
Board Vice President John K. Gallagher said the township Municipal Authority would actually take on the debt.
“The township Municipal Authority is the one that is tasked with dealing with our stormwater as well as our sanitary sewer system," Gallagher said.
"And the township backs it sort of as a guarantor for the Municipal Authority's debt, but we will not be using taxpayer money to repay the loan.
“It will be the Municipal Authority using our stormwater fee income to pay for all of the stormwater projects. Some we've actually paid out of that fund directly, but most of it is going to be from borrowing.”
Spreading out the payments over time via a loan payback lets the project get underway without decimating the stormwater fee funds in one fell swoop, Gallagher said.
"Very favorable' interest rate
The $2.71 million loan will come from PENNVEST, “a financing authority that provides low-cost financial assistance to address water, wastewater, stormwater, and non-point source pollution problems that impact public health, safety, the environment, regulatory compliance, and economic development.”
Gallagher said the initial interest rate on the loan was “very favorable,” at 1.7% over the first 10 years, followed by a rate of 2.2% for the next decade.
“I don't know how it is that they derive those interest rate figures, but that's what they've offered, and given today's market for borrowing, it is very favorable,” Gallagher said.
"It experiences quite a bit of flooding, even with storms that you would not think there'd be enough rain to cause a problem, but we've gotten many complaints from residents in that neighborhood."Bethlehem Township Board of Commissioners Board Vice President John K. Gallagher
According to Gallagher, the loan will help cover new infrastructure, a new sewer pipe and inlets on Walnut Street in an area “that currently has no stormwater infrastructure at all.”
“That's one of the oldest neighborhoods in the township, and Walnut Street is one of the low areas geographically in the township," he said.
"And it experiences quite a bit of flooding, even with storms that you would not think there'd be enough rain to cause a problem, but we've gotten many complaints from residents in that neighborhood.
“So we’ve got our stormwater engineer who has designed this system of pipes and inlets to carry that water, get it off the street, get it underground, carry it down, and it will ultimately flow into Nancy Run.”
The Nancy Run tributary, running about 4.1 miles, ultimately leads to the Lehigh River.
Gallagher said the project is among many under the stormwater plan that aim to mitigate flood damage and pollution, as well as reduce sediment in the stormwater outflow.
