Council seeks to borrow $7.7M
Move would pay for capital improvement projects, equipment
City Council on Wednesday introduced an ordinance that authorizes the borrowing of $7.7 million in 15-year bonds for capital projects, including street resurfacing, curbs and sidewalks, traffic signal and streetlight upgrades, storm sewer improvements, parks and recreation enhancements, building improvements and new information technology equipment.
The borrowing will bring the city up to the 10 percent recommended maximum in debt service, as a function of net operating revenues — with the probable necessity of a similar borrowing in two years that would take the city beyond that limit, said City Manager Ken Decker, in keeping with his recent argument that city finances aren’t as robust as they seemed after Altoona exited the state’s Act 47 distressed municipalities program in 2017.
Moreover, the new borrowing will pay for some equipment with expected useful lives shorter than the payback period — including personal protection equipment and radio upgrades for the fire department, Tasers and virtual reality training equipment for the police department, an IT network upgrade, servers, computers and copiers for various departments, security cameras and phone system upgrades, purchases that should be made within a municipality’s regular budget, if possible, Decker has said.
For now, however, the borrowing is needed to get the city out of a “tight spot,” Decker said.
His hope is to eventually cut expenses and raise revenues so the city can fold many such expenses into the annual budget, Decker said last month.
Council can adopt the bond ordinance at its next meeting, then settle on the bond issue 30 days hence, said Finance Director Omar Strohm.
In another matter, the city should be able to make use of at least a portion of a $350,000 grant it was recently awarded for purchase, rehabilitation and outfitting of the former J&J recycling center on Margaret Avenue, even if council decides not to proceed with the project, according to Decker.
The original plan was for the grant to reimburse the city for buying the property for $187,000, then use the rest of the money, in combination with a $39,000 local match, to do the upgrades and buy the necessary equipment.
But last month, council members suggested that re-establishing a recycling center in the heart of an area that’s losing its longtime grittiness to redevelopment would be counterproductive.
Officials thought that if the city declines to follow through on the project, it would lose the entire grant, but a conversation with the Department of Environmental Protection made clear that the city can accept the portion of the grant that’s slated for equipment purchases, then redirect that money for recycling-related equipment at the Buckhorn, where the Intermunicipal Relations Committee — of which Altoona is a member — has a recycling facility, Decker said.
Officials on Wednesday didn’t know, though, how much of the grant is slated for equipment.
One of the concerns about accepting the entire grant and proceeding with the project is that it would bind the city to use the building for a recycling center, officials said last month.
The recent conversation with DEP provided only partial clarity on that, according to Decker.
Accepting the grant would indeed commit the city to keeping the property as a recycling center, but the department declined to say how long, Decker said.
Instead, it said that it would monitor the use of the property, then decide at some future date when it has outlived its usefulness as a recycling center, he said.
Mirror Staff Writer William Kibler is at 949-7038.