Pocopson supervisors statement on Barnard House borrowing

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(Statement read by Pocopson Township Supervisors’ Chair, Steve Conary during the Township meeting, 2/27/12.)

Under the provisions of the Pennsylvania Act 153 of 1996, Pocopson voters approved a referendum in 2006 for a one-mill property tax dedicated to open space preservation.  As was discussed at public meetings before the vote, a provision was included in the enabling ordinance that commitments for open space preservation must be completed in a five-year period (2007 – 20011) with the tax to end after those commitments were satisfied. There has been no extension to that five-year commitment.

The township borrowed funds for open space preservation last fall at a very favorable 2.7% fixed rate based on appraisals and negotiations with three willing landowners on hand at the time. Late in the process, the final costs came in less than expected.

There are significant pre-payment penalties to turn back the unused portion of the open space loan. Discussions are underway with the lender to determine the lowest cost option for the township as choices are considered. One choice, if the board elects to proceed with re-purposing the Barnard House into the township municipal building to replace the former garage now being used, is to reclassify a portion of the unused open space loan as a general fund loan. This would take advantage of the existing low interest rate, avoid the pre-payment penalties and avoid new loan application and processing fees for the Barnard House work. In this case, no open space tax revenues would be used to pay off that portion of the loan. In any event, barring a significant shift in assessed values in the township, the open space tax is now expected to expire in 2022 – about ten years earlier than projected when the referendum was passed.

Spending one million dollars on the Barnard House is not in the plans and recent efforts have been focused on ways to reduce the costs to the minimum necessary to make the building usable. Some work was completed last year to correct structural issues – there is additional work necessary to ensure this 180+ year-old historical building does not deteriorate, e.g., fix windows that have rotted sills or allow water infiltration. The electrical, heating and plumbing systems must also be replaced for the building to be suitable and safe for occupants. Once the costs are better defined, the board will make a choice under the applicable provisions of the Pennsylvania Second Class Township Code.

A range of opinions have been expressed on these issues and discourse is always welcome.

 

(The township lender is Delaware Valley Regional Finance Authority)

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