Commissioners back $17M revenue bond
Disposal area to be expanded
LOCK HAVEN — After nearly a month of legal negotiations, the Clinton County commissioners voted Thursday to secure $17 million in 2018 guaranteed revenue bonds issued by the county Solid Waste Authority to finance expansion of the Wayne Township Landfill.
The total bond amount will probably come to around $14 or $15 million, said Jay Wenger, managing director of Susquehanna Group Advisors, Inc. of Harrisburg.
SGA developed a self-liquidating debt analysis that projects the landfill’s revenue stream over 25 years, including its ability to cover costs and make debt payments.
The authority will use about $10.5 million of the bond money to add about 15 acres of disposal area, buy new equipment, construct a new compressed natural gas station, erect a new maintenance building and refinance two bank loans.
In the event that the authority has a year where it cannot make debt service payments, it will be able to draw from a debt service reserve fund created by the bond proceeds, Wenger told commissioners Thursday.
Commissioner Paul Conklin asked what the risks to the county might be if the authority had to use the reserve account due to a payment shortfall.
“If they have to use that reserve, there is no obligation of the county to refund that reserve,” said county solicitor Larry Coploff.
Due to the county’s good credit standing, the average interest rate over the life of the bond is 5 percent.
“I think the risk to the county is very minimal,” said Commissioner Jeff Snyder.
Snyder said that, without the county-authority agreement, in-county haulers would not be able to have the low tipping fee the authority provides.
Over the last two decades, the authority has been able to reduce the tipping fee for in-county haulers from $57.50 a ton to $36.50 a ton, according to the authority.
Commissioner Pete Smeltz commended the authority, saying the bond agreement will have a positive impact on future county-authority operations.
“It’s a well-managed landfill,” he said. “We want to make sure for the future board of commissioners and the future landfill managers that we can protect this relationship.”
Because of the county-authority agreement, the authority pays the county a $1.50 per ton fee for garbage taken to the landfill, helping to reduce the tax burden. Additionally, the authority pays a $1.25 per ton fee to Wayne Township, allowing the municipality to not have a property tax. Funds are given to local fire companies, for scholarships.
“Your help is affecting the bottom line of $7 million,” said Jay Alexander, general manager of the landfill, to the commissioners.
With a county guarantee of repayment, the authority’s interest payments would — under current market conditions — be about $7 million less than if the authority used a different creditor, officials said.
The authority and its counsel said they believe that, based on estimated net revenues, the authority will be able to pay the annual debt service on the bonds. The bond report will be filed next week with the state Department of Community and Economic Development and Wenger said the authority hopes to have an answer in mid-December.
He said they expect to close on the 2018 bonds in early January.
If the authority were to default on its bond payments, the county would become the owner of the landfill, with the ability to sell it.
But the agreement mandates the landfill to present its budget every September to the commissioners for transparency purposes.
Other representatives from the landfill present at Thursday’s commissioners meeting were authority authority Chairman Terry Weaver, authority member Jim Lovette and Administrative Manager Marci Orndorf.
Mike Flanagan, president and CEO of the Clinton County Economic Partnership, commended the landfill for its role in helping the county.
He said everyone should understand “how important it is to have a landfill in our community, from a residential standpoint.”