Financing Approved for Jacob Street Re-Paving

by Jonathan Weaver

A majority of Kittanning Borough Council unanimously voted to enter into a loan agreement with a regional bank to complete a local paving project, but it remains unclear when the contractor will resume work.

Last night, six council members voted to borrow $250,000 from First Commonwealth Bank at a 1.99 percent interest rate with $250 due at closing.

Missing from last night’s special meeting were First Ward Councilman David Croyle and Fourth Ward Councilman Andy Peters.

Council members opened bids from six lending institutions at April 4’s regular meeting. The financing agreement with First Commonwealth at that time was pending Solicitor Ty Heller’s further review.

A few weeks ago, Heller explained why he and other Borough officials recommended borrowing.

“With some of the funds coming back from PennDOT on the Market Street project, there’s a temptation to think that we can pay some of that money and reduce the amount we borrow,” Heller said. “Because of the timing (PennDOT’s) coming to ask us for a match is uncertain, and because we don’t want to impede the Borough’s ability of cash flow, because you’re only paying interest on the money as you borrow it and since we’re anticipating the borrowing is only a short-term thing, it seems to us the best option would be to borrow the money.”

Earlier this month, Senate Engineering’s Mike Malak reported Russell-Standard contractors from Pittsburgh tentatively wanted to begin resurfacing yesterday, but colleague Bill Braun explained why the contractors were not in town despite the humid weather.

“Late last week, they called me and said they changed their plans for three reasons: because the samples taken were not representative of the project, their density testing was good (and) their third reason was that they haven’t been paid anything yet,” Braun said.

Contractors milled and paved the road in October, but two of the three core samples failed testing and Kittanning Borough adhered to PennDOT’s advice and refused payment.

Kittanning Borough hopes to pay Russell Standard through two grants: a $250,000 Keystone Communities grant and a nearly-$220,000 Transportation Alternatives Program (TAP) grant. About $137,000 in TAP grant funds remain.

The borough also borrowed a $700,000-low interest loan from Pennsylvania Infrastructure Bank for several paving projects in 2014.

Heller said it was important to have the financing agreement and to utilize as much of the TAP grant first.

“If we don’t use all the Keystone Communities funding on Jacob Street, that would be available for other things,” Heller said, such as the Phase III Market Street paving. “Just trying to stretch every dollar.”

Keystone Communities funding is also going toward the borough’s Phase II match.

County Planning and Development Project Manager Sally Conklin explained she was first informed that the Borough would be reimbursed by PennDOT provided a copy of the check was received. However, that process changed a few weeks ago as well and a check isn’t expected until about Memorial Day.

PennDOT officials previously accepted the first pay estimate of $254,000. The inadequate Jacob Street wearing surface deducted about $41,000 from the estimate to be paid.

“As soon as we have it, we’ll pay it,” Heller said.

Braun said PennDOT wants all invoices for the paving project by June to utilize all available grant funds.

Borough officials will try to set up a meeting with Russell Standard and legislative representatives as soon as possible.