Easton saves thanks to increased credit rating
Updated On: Oct 13 2013 01:16:01 PM CDT
Easton’s push to rejuvenate the downtown took several big steps Wednesday, setting the stage for major construction projects in what was once a gritty river town.
The city sold $16.7 million in bonds to fund the construction of a new City Hall, transportation center and a center city market. Thanks to the city’s improving credit rating, which Standard & Poor’s Rating Services upgraded to A +, the city was able to lower its borrowing costs, saving about $1 million in principal and interest.
The majority of the debt will be used to build a new City Hall, replacing the Alpha Building which the city has agreed to sell for $4 million to a developer. About $9 million will fund construction of a new 375-space parking deck, transportation center on South Third Street.
City Council was briefed on the bond sale by Gary Pulcini of Valco Capital, a financial consulting services company in Ligonier.
Pulcini said the higher credit rating was based on the city’s “strong budgetary flexibility” that created a 9 percent reserve, or $2.4 million, in 2012 and strong management that has demonstrated the consistent ability to maintain balanced budgets. Pulcini said strong City Hall management has “stopped silly practices of the past …” He used a hypothetical example of previous administrations fixing potholes but not finding the cause of the problem.
Other negative factors weighing against the city include a weak economy with high unemployment.
“We’re not rich, but we’re stable,” Mayor Sal Panto Jr. said, referring to Pulcini’s comment that his positive remarks about Easton should not be taken to mean the city is floating in cash.
Easton, which currently has a millage rate of 15.26, is well below the 25-mill tax cap, meaning the city has plenty of room to raise taxes, Pulcini’s report pointed out.
Panto has proposed raising the city’s earned income tax by .2 percent to fill a $800,000 gap in the city’s $32.2 million budget.
If adopted as proposed, the increase would mean an additional $100 a year for a family earning $50,000. To give council more flexibility in the budget process, council agreed Wednesday to consider earned income tax increases ranging from .1 to .3 percent.
Council entered into agreements for the parking deck project with general contractor Wilmer R. Schultz of Emmaus, $9 million; Thomas Hoffman of Allentown for electrical work, $833,415; and KC Mechanical Services of Upper Mount Bethel Township for heating, ventilation and air conditioning and plumbing work, $813,000.
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