County approves $64 million in bonds
A portion of the first bond will be funded through the new $5 motor vehicle registration fee.
NORRISTOWN >> The Montgomery County Board of Commissioners unanimously approved the issuance of two series bonds totaling $64 million Thursday aimed at funding capital improvement programs and refinancing old debt.
A portion of the first bond will be funded using a $5 motor vehicle registration fee, approved last fall, which will be earmarked for improvements to the county’s bridges and roadwork. The second bond will refinance a bond from 2009.
The commissioners also approved requests for proposals for seven bridge repair projects and seven other bridge construction inspection services. Four of the bridges on the list for repair this year were added because of the motor vehicle registration fee. Another four will be announced later this year, according to the county.
The $64 million is divided into two separate series bonds. The first, series A of 2017, is $50 million for capital improvements. The second, series B of 2017, is for $14 million, which refinances an older bond.
Series A aims to fund the county’s 2017-18 capital improvement program. Included in that $50 million is $35 million to fund longterm capital projects like: the county’s $281 million campus project; parks and trail projects; large equipment and rolling stock replacements; the county’s contribution to SEPTA; and technology projects across the organization.
“That is to get us through (2017) and get us into (2018),” said chief financial officer Dean Dortone. “By then we will have reevaluated the capital improvement program, gone through the budget process and have a better idea what we need to do in (2018) and beyond.”
The remaining $15 million of the bond will be used to fund the county’s 2017 road and bridges capital improvement program, which provides funding for 34 bridge projects in various phases (including planning, design and construction). To pay for 100 percent of the debt service related to the $15 million portion of the bond, the county launched the $5 motor vehicle registration fee last fall. Dortone reiterated this program will not impact property taxes. The funding from the fee will be dispensed in June and again at the end of the year. The county estimates $3.2 million will come from the fee for the year.
Of the 133 bridges in Montgomery County, 62 were considered structurally deficient in 2012, said Lorie Slass, Montgomery County Director of Communications. At that time, there were only seven active bridge projects underway. Since 2012, the county has repaired or replaced 16 of the 62 structurally deficient bridges. This year, there will be 34 active bridge projects underway either in design or construction bringing the total of active or completed bridge projects to 50 since 2012.
In fact, the county is requesting proposals for seven bridge repair projects and seven bridge construction inspection services. The seven repair projects are for:
• Bridge 38 on Moreland Avenue in Hatboro
• Bridge 119 on Davis Grove Road in Horsham
• Bridge 150 on Camp Wawa Road in Lower Salford
• Bridge 163 on Swamp Pike in New Hanover
• Bridge 177 on Sterigere Street in Norristown
• Bridge 262 on Moyer Road in Upper Salford
• Bridge 274 on Henry Road in Douglass
The projects in Horsham, Lower Salford, Hanover and Norristown were included in this year’s list of bridge replacements due to the $5 motor vehicle registration fee. Four more bridges are expected to be announced later this year, Slass said.
Commissioner Joe Gale, a long time opponent of the $5 fee, called it “another government money grab when vehicle owners are already taxed enough at the gas pump and elsewhere.”
That said, as a commissioner he said he has a responsibility to vote on how county revenue is spent “regardless of whether I think the additional money should have been taken from car and truck owners in the first place.”
The seven bridge construction inspection services will be needed for the following bridges:
• Bridge 4 Conshohocken State Road in Lower Merion
• Bridge 7 Black Rock Road in Lower Merion
• Bridge 8 Morris Avenue in Lower Merion
• Bridge 9 Old Gulph Road in Lower Merion
• Bridge 122 Rupert Road in Lower Pottsgrove
• Bridge 206 Paper Mill Road in Douglass
• Bridge 231 Peevy Road in Upper Hanover.
The second of the two bonds, series B of 2017, will be used to refund and refinance $14.9 million of the county’s series 2009 C bonds. Refunding will generate future general fund debt service savings between 2017 and 2024. Current financial markets are volatile; however, the financing team will continue to monitor this opportunity up to the bond sale date, according to the county.
“We had this refunding opportunity where we could refinance bonds that were issued in 2009. Typically they’ll have a five- or sixyear (refinance) on them, which means after five or six years, the county can (refinance) them if the interest rates are lower. That’s what’s happening here,” Dortone said. “The interest rates are lower than the bonds that were issued in 2009. So we (refinance) the bonds, notify all the bond holders we’re going to buy them back and reissue new debt. So they still get all their interest that they would get and everything but that’s it they’re done with the bonds.”
“Typically they’ll have a five- or six-year (refinance) on them, which means after five or six years, the county can (refinance) them if the interest rates are lower.” — Dean Dortone, chief financial officer