Locally, Mount Carmel wrestles with municipal debt guarantees
MOUNT CARMEL - Mount Carmel Borough Council and the Mount Carmel Municipal Authority (MCMA) have recently wrestled with the issue of guaranteeing public debt.
The borough eventually gave its backing for the authority to acquire a $1.25 million loan to fund sewer plant repairs, but not before council members developed a list of stipulations and offered harsh criticism of the MCMA board.
Council members' concerns were in part about timing, with MCMA seeking permission at the last minute and after construction related to the loan had already begun.
The issue of municipalities providing guarantees on public debt for a municipal authority is the subject of a Senate bill. It would strictly limit that ability, the proposed legislation noting the risk created for taxpayers.
Mount Carmel Borough Council President Tony Matulewicz alluded to such risks in council's dealings with MCMA.
"It would be financially irresponsible and ridiculous to vote on this tonight," he said at a June 20 meeting.
Council members said, for example, they had no information on whether rates would increase because of the work.
In August, council did vote to approve the 20-year loan at a fixed interest rate of 2.4 percent.