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11/2/2008 4:33 AM

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By Michael Jones, Staff writer

mjones@observer-reporter.com

North Strabane Township supervisors agreed Tuesday to guarantee a $1.5 million bank loan and offer advance payments for part of a $6 million bond to the township's municipal authority for a sewerage expansion project.

The cash advance of about $420,000 over five years for the bond, which the authority will pay back to the township, and bank loan are needed to complete the $4.37 million Linden Creek sewer line project.

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The township's willingness to become a backstop on the loan if needed and offer an advance on the bond means the authority will not have to raise rates or abandon the project that would service about 120 homes in the Gambles and Reedville area and Wylandville Elementary School. That would have been a painful proposition for residents in need of sewage systems, said Matthew Marasco, manager of the municipal authority.

"The number of phone calls that I've received have been increasing," Marasco said. "People are complaining about sewage discharges from septic tanks. They've been waiting for it for so many years; they're ready for public sewerage."

The first part of the Marasco's request was for the township to guarantee a $1.5 million bank loan as the authority makes annual payments of about $207,500 over the next 10 years.

The cash advance request offers assistance on the $6 million bond taken out in 2003. More than half of it was used on an earlier project, leaving $2.8 million to pay for part of the proposed project. The municipal authority and township supervisors are expected to set up a repayment schedule by the end of the year.

On Wednesday, the municipal authority board unanimously authorized borrowing up to $1.5 million from Brentwood Bank to pay for a portion of the cost of the Linden Creek project.

Marasco said last week the authority's $2.5 million spending plan for 2008 experienced a large increase in operating costs and the operating fund budget had a $221,000 deficit by mid-September. Marasco said the authority is no longer able to transfer money from the operating budget to the capital fund due to the shortfall.

The authority is receiving less revenue from tap-in fees and experiencing drops in interest earned on investments.

In addition, the state Department of Environmental Protection ordered the township to begin adding bioxide to a force main at its Route 19 pump station last year after studies indicated that elevated levels of sulfide and hydrogen sulfide caused a rotten-egg odor. Marasco said the chemical is estimated to cost $200,000 annually and a bioxide tank is expected to cost $80,000.

Staff writer Amanda Gillooly contributed to this story.

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