SHARON

$300,000 loan eyed for sewer repairs

City Finance Director Michael Gasparich said Thursday they have applied for a PENNVEST loan to cover most of the cost of the project. PENNVEST is a low-interest state loan program available to cities.

Gasparich said the loan will not come through until August or September, and work needs to begin soon.

The storm sewer is damaged and causing problems for Budd Street residents.

Gasparich said a sink hole caused a parking lot to flood. He said there are also houses that have basements with water damage because of the leaks.

Council president Fred Hoffman asked how the loan would affect the budget. Gasparich said it will have no impact on the budget this year, but repaying the loan could result in tax hikes.

Gasparich said the money could come out of the general fund or the sewer fund. Councilman Lou Rotunno said he wants the money to come out of the sewer fund because it’s a sewer problem.

Council will borrow $300,000 from Sky Bank at an interest rate of 5.58 percent. He said the city had other bids, but Sky Bank had the best offer.

Engineers originally projected the work would cost $396,000, Gasparich said. A 10 percent contingency was built in to the loan application to provide for extra costs that may be incurred during the work, Gasparich said.