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Housing & Community | Real Life Stories « Community Lending Program »
Community Lending Program Success Stories
Three Municipalities Upgrade Their
Infrastructure; Local Bank
Commits $8 Million with the Help of CLP
 How
does one community bank meet the needs of three municipal
authorities, save local taxpayers money and enhance
its own reputation for excellent customer service?
Three northeastern Pennsylvania localities have embarked
on major upgrades to their public water and sewer systems
using innovative financing that will keep the projects
moving while saving tax dollars, and First Citizens
National Bank of Mansfield has found FHLBank Pittsburgh’s
Community Lending Program (CLP) the key to sealing
such deals.
Backed by CLP, First Citizens has committed a total
of $8 million in financing to the three authorities.
The financing includes $2 million for additional support
of Canton Borough’s storm water and sewer system,
$2.2 million for the refinancing of existing debt on
a water filtration plant and construction of a new
water storage tank in Mansfield Borough, and $4 million
for a water and sewer project in Sayre Borough.
CLP is an $825 million revolving line of credit from
which member-owners of FHLBank like First Citizens
can draw needed financing for community projects at
FHLBank’s cost of funds. Its availability is
consistent with the Bank’s public mission of
fostering community stability and growth.
Canton Borough
In Canton Borough, work is under way on the replacement
of 7,000 feet of a combined storm water and sewer system
with EPA-compliant sanitary and storm water lines.
The existing sewer system, built around 1910, is being
upgraded to separate storm runoff from waste disposal.
“Using a First Citizens line of credit supported by FHLBank, we are able
to pay the contractor working on these installations in a timely manner while
we await reimbursement from the state for these costs,” said Les Hilfiger,
Canton Borough Authority Manager. “The result is better pricing from
our contractor, savings to the taxpayer and an unbroken work schedule.” The
project is expected to be completed in the fall of 2007.
Mansfield Borough
In Mansfield Borough, Ron Weed, superintendent of
the municipal authority, saw a need to refinance the
remaining $1.9 million of $2.6 million in debt undertaken
in 1984 for construction of a water filtration plant,
raw water reservoir and associated work. Working with
First Citizens, Weed lowered the interest rate and
was able to borrow an additional $294,000 for construction
of a new water storage tank this year. By restructuring
the loan, the authority will also be able to keep the
same monthly payment, thereby eliminating any impact
on water rates. Again, FHLBank’s cost-of-funds
Community Lending Program supported the low-cost lending
to the authority.
Sayre Borough
The Borough of Sayre’s first experience with
innovative financing from First Citizens was in 2003
when Borough officials met with bank representatives
to discuss the possibility of refinancing an existing
$6 million bond. First Citizens, realizing the long-term
needs of the borough, established a multi-million dollar
line of credit for capital and infrastructure improvements.
Recently, the borough again worked with First Citizens
to refinance the existing loan, resulting in a savings
of more than $250,000 that enabled the borough to reinvest
more into the sanitary sewer system.
“We were able to do more with less, upgrading
a more than century-old sewer system while improving
our pumping station,” remarked Borough Manager
David Jarrett. “Due to the attractive financing,
we were also able to move forward with our projects
and we received fantastic bids – one came in
almost a million dollars below what we had anticipated.
This was a wonderful windfall and a tremendous savings
for taxpayers.”
“Through FHLBank’s Community Lending Program,
community banks like First Citizens are able to provide
local municipalities with a cost-effective option to
pay for special community projects,” said Randall
E. Black, chief executive officer and president of
the Mansfield, PA-based bank. “We have been able
to utilize this program for various community projects
over the past few years. This program is truly a win-win
situation for all parties involved.”
More Success Stories…
Creative Refinancing Clears
Way for Senior Housing Renovation
At a ceremony at One West Penn Apartments in Carlisle,
PA, this July, U.S. Rep. Todd Platts and Christopher
Gulotta, executive director of the Cumberland County
Housing and Redevelopment Authority (CCHRA), announced
$6.7 million in Community Lending Program (CLP) funding
that has resulted in the innovative refinancing of
the complex's existing mortgage and a lowered interest
rate.
Updated Fire Company Facility Improves Equipment,
Service for Community
Mercer County State Bank, Sandy Lake, PA, led the way
in Community Lending Program funding in one local community.
Mercer County State Bank used a $600,000 CLP loan to
help the Stoneboro Fire Department replace an existing
fire company building in 2003. The loan enabled the
fire department to benefit from updated facilities,
as well as add two new bays for the firefighting equipment.
Comprehensive Plans Redevelop Reading's Downtown District
For 20 years, developers had tried to revitalize the
former Wyomissing Club, a historic building in downtown
Reading, PA, to no avail. Finally, in 1999, Phoebe Ministries
— a not-for-profit organization specializing in
health care, housing and support services for older
persons throughout eastern and central Pennsylvania
— completed a major renovation of the vacant building
into 58 affordable apartments for lower-income senior
citizens.
Community-building Effort Generates Income, Jobs for
Area Residents
In a collaborative effort to enhance community development
in an economically distressed area, the Mingo Junction
Redevelopment Authority developed two commercial buildings
for lease to the West Virginia Department of Motor Vehicles
and to the West Virginia State Police. The project took
advance of a loan of nearly $1.1 million from the FHLBank
of Pittsburgh’s Community Lending Program, made
through the First National Bank of Williamson. The project
provides additional local income and created jobs for
area residents.
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