York County approves borrowing up to $32 million

David Weissman
  • York County taking out separate $18 million and $7.6 million bonds that will be paid over 10 years.
  • Bonds center around paying for current and future 911 radio systems; new system expected July 2017.
  • Bonds will add approximately $3 million of debt combined to yearly budget.

York County commissioners have authorized bankers to borrow up to $32 million on the county's behalf in a move that centers around paying for the current and future 911 radio systems.

The York County commissioners approved a five-year contract Wednesday worth more than $2.1 million for maintenance of the county's emergency management systems, including the 911 call center. Friday, July 22, 2016. John A. Pavoncello photo

The county has $21 million worth of debt due Dec. 1 from upgrading its 911 system in 2008, according to administrator Mark Derr.

The $21 million is "stranded debt" because it was used to finance a 911 system that will become obsolete in 2017 when a new, federally mandated, upgraded system goes live.

About five years after the existing system went online, Congress ordered 911 radio systems to be switched to a different radio bandwidth, following a recommendation from a federal commission formed after the Sept. 11, 2001, terrorist attacks. Under the plan, the county must shift from its current T-band frequency to the 700 MHz frequency, and the federal government has said it would pay back part of the cost for counties that make the switch.

However, that money was supposed to come from the federal government auctioning off the county's T-band frequency, which Derr said looks like it might be pushed off until about 2024.

York County could have to pay $21M debt in 2016

By that point, Derr said he doubts the check from the federal government would cover the entirety of the debt and, even if the government had been ready to auction it off by now, York County is still using it.

As a result, the county must take out an $18 million bond, which will be paid back over 10 years, to pay off the $21 million of debt due this December.

Derr explained that, because the prime interest rate is currently so low and York County has a high credit rating, banks are willing to give the county more than the bond is worth because they get a higher interest rate from the loan.

Wednesday, Feb. 3, 2016--Mark Derr, York County administrator. Bill Kalina photo

According to estimates by PNC Capital Markets, the county will pay approximately $5.25 million in interest over the course of the 10-year bond.

Second bond: The county will also take out a second $7.6 million bond that includes $4.2 million for upgrading to the new 700 MHz frequency system, Derr said.

Eric Bistline, executive director of the county's emergency services, previously said the new system is expected to be up and running by July 31, 2017.

County approves $2 million emergency system contract

The other portion of the bond consists of $3 million to fix the York County Prison roof and $250,000 for renovations to the Strickler farmhouse in Springettsbury Township, Derr said.

Derr said the prison might end up needing more than $3 million to fix its roof, and the Strickler farmhouse, an 18th-century structure next to the prison, could potentially become the new York County coroner's office.

Overall, the two bonds will add about $3 million of debt to the county's budget beginning in 2017, but Derr said much of that will be offset by the annual $2.7 million of debt coming off the books by paying off the $21 million in December.

Though the two bonds only add up to $25.6 million, Derr said the commissioners authorized up to $32 million of borrowing to give the bankers a little breathing room. Additional funds won't be borrowed unless they are absolutely needed, he added.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid.