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Community Lending Program Success Stories

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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