Lansford Borough Council last night agreed to borrow $306,100 for a 20-year period from Jim Thorpe National Bank to purchase municipal street lights – including traffic signals – from PPL Electric.
The borough is hoping that by owning the lights, there will be a long-term financial savings for residents.
Tim Moran, of Municipal Energy Managers, Olyphant, said if electric rates increase at the rate of 3 percent a year, the borough's savings will amount to $402,896 over the 20-year period.
Once the debt is repaid in 20 years, the borough will enjoy annual savings of about $28,590, Moran said.
Moran told council his firm contacted 20 different banks to obtain financing proposals. The only two banks interested in providing Lansford with the loan were Jim Thorpe National Bank and Mauch Chunk Trust Company.
Jim Thorpe National offered a fixed rate of 4.5 percent over the 20-year length of the loan, while Mauch Chunk's rate would have been 4.6 percent for the first 10 years, then a variable rate for the second half of the loan.
The actual loan agreement is expected to be available in about 30 days.
Among the financial benefits to the borough, pointed out by Moran, are:
• The borough begins ownership with fully renovated streetlight system.
• The project has no additional budgetary impact as the annual costs will be paid from the street lighting budget.
• The borough continues to out-source maintenance responsibility to a third-party contractor, via 20-year fixed cost contract.
• Assists in containing ongoing utility costs as ownership provides protection from approximately two-thirds of any future rate increases by the electric utility.
According to figures presented by Moran, the borough is paying $62,320 in 2009 for PPL charges.
At 3 percent annual increases, the borough would be paying PPL over $100,000 by the year 2025.
The financing approved by the borough is to be used "towards the design, acquisition, construction, renovation, and improvement to the municipal street light system of the borough."