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During Monday's council meeting, Ebensburg Borough officials approved opening a line of credit with First National Bank for a maximum amount of $3.5 million to cover the payments of all contractors for the Lake Rowena dredging and concession stand/restroom projects.
First National Bank's 3.75% interest rate was the most attractive quote the borough received, officials said.
Council Vice President Theresa Jacoby said the administration of payments to contractors will be in a 60-day schedule, so the borough has to cover the costs and then be reimbursed by the grant funder.
The borough needs to fund payments near $3.4 million and await reimbursement, which could take between six to 10 weeks, Jacoby said, adding the borough will inquire whether the interest expenses can be covered with the grant submittal for its administration of the grant funds.
The borough has $1.8 million to $2.5 million in reserve and can temporarily borrow from those funds, but it will not have enough to cover all expenditures within the tight window of bill payments, Jacoby said.
Borough officials plan to use their existing account and Pennsylvania Local Government Investment Trust funds up as collateral, according to Monday's meeting agenda.