Phoenixville Borough Councilmembers Ken Buckwalter, Jeff Senley, and Mike Handwerk voted against the motion.
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Parking authority gets loan to meter lots
Friday, September 11, 2009
By Dennis J. Wright, dwright@pottsmerc.com
PHOENIXVILLE — The Borough Council has voted to guarantee the parking authority a $100,000 loan to begin implementing parking meters in several borough lots.
After council gave the authority $5,500 for a feasibilty/revenue study at its Aug. 25meeting, it voted to guarantee the $100,000 loan without seeing the feasibility/revenue study.
What the council did receive was a new narrative, provided by authority member Barry Cassidy, which lists a series of tasks and a potential scenario on how the authority plans to be up and running at no cost to the borough.
The authority plans to lease four lots (Bridge and Main, Mill Street, Taylor Alley, and Prospect Street), and establish a line of credit to enable them to do the necessary studies to implement a parking lot metering program. The borough would step forward and pay for the initial income study.
The narrative states that the authority would assume responsibility for the lots, cleaning, re-striping, general maintenance and administration, purchase meter boxes for the lots, and start making sure cars begin to move in and out of the lots without remaining parked for weeks without moving.
During this time, the authority will continue to work on developing a parking garage, the narrative states.
Richard Mark Kirkner (D-North) said that if council guaranteed the money to the authority, it should be able to look at the authority's books.
"While the loan is active, we need to get a monthly report from them," Kirkner said.
So Kirkner made the motion for council to adopt the ordinance authorizing the borough to incur lease rental debt in the maximum principal amount of $100,000 by guaranteeing a note of the Phoenixville Parking Authority for the purpose of funding capital projects and paying costs related to project operations.
Added to the motion is that the parking authority manager be directed to provide council with monthly statements, as well as execution of documents is pending of approval of the feasibility/revenue study.
Kendrick Buckwalter (R-West) said the motion should be contingent on a positive feasibility/revenue study from the authority.
"We should be shown that there is sufficient money coming in," Buckwalter said.
Kirkner replied, "If the study comes back and their plan isn't viable, it doesn't go forward."
Buckwalter asked authority member Jim Lolli what the authority's plans would be if the ordinance would pass.
"We will sit tight until we find out the results of the study," Lolli answered. "The study is on the way."
Borough Manager E. Jean Krack said that the authority's study should be back in three to four weeks.
http://www.pottsmerc.com/articles/2009/09/11/news/srv0000006363519.txt
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13 comments:
Maybe Lovely Rita Meter Maid can get a hot job for $125K like Big Barry Cassidy so the deal's guaranteed to lose money. You know it'll get approved then.
Don't they still need a bank to loan them the money? I thought a loan guarantee was for the bank's benefit, in case they did not pay the loan back, then the Borough would be on the hook for it. Is that what happened here?
I wrote a better story about this issue at http://phoenixvillefocus.com/?p=121
Anon September 11, 2009 2:43:00 PM EDT
“Don't they still need a bank to loan them the money? I thought a loan guarantee was for the bank's benefit, in case they did not pay the loan back, then the Borough would be on the hook for it. Is that what happened here?”
The bank does benefit from a loan guarantee. If they believe there may be a problem of repayment they want another party, in this case the Borough, backing the loan. Yes, the Borough would be on the hook.
This is no different than you co-signing a loan document for someone. If they don’t pay then the bank tells you that you are responsible for the loan. It is no different here.
So, if I am reaching the correct conclusion, the lenders at the bank think that this is a questionable loan. Is that correct?
If so, then why is the Borough volunteering to back it up, if the bank thinks there is a problem with paying it back? They would know, after all, it is their business to know.
You have reached the correct conclusion. The bank was NOT willing to take the risk without a cosigner. Most likely not because the "authority" wouldn't be able to repay the loan but because of the justification "memo" that the director presented, with board approval, to the bank. After they realized the "director" had no idea what a business plan was, I suspect the loan officer had a good laugh and immediately demanded the cosigner.
Another entertaining point here is that Councilman Handwerk asked Parking Authority Executive Director Barry Cassidy about 2 months back how many banks he had gone to with the loan request.
The answer was 1 (Phoenixville Federal).
Mr. Handwerk rightfully suggested that other banks be queried for the loan opportunity to determine if the loan guaranty was really necessary or not.
We never heard back on the results from other banks, or how many. Nonetheless, we have a guaranty signed (if Mayor Scoda does not veto the ordinance).
This was my comment from The Chicken Cacciatore Project on 5 September regarding the 100K loan:
"Can't Barry weasel a loan from his new buddy Richard Kunsch (CEO, Phoenixville Federal Bank & Trust) and fellow member of the Citizens Advisory Committee?
Maybe he doesn't see any future in the Parking Authority either."
I guess when the PA goes down the tubes at least Phoenixville Federal will make a buck and the taxpayers lose again.
So when the Parking Authority gets the money, are they required to be accountable to the Council for how it is spent? What keeps them honest? Who is keeping their books and who on Council will review them? It is a lot of money and especially if it is a line of credit, easy to spend.
Are the taxpayers counting on someone who can't even come up with a proper business plan, to keep an accounting of how that large sum of money is being spent? This is a recipe for yet another taxpayer disaster
I believe the CDC Board member is Richard Kunsch's son Kurt, who does indeed work at the bank for Dick.
Regarding which Kunsch is on the CAC, I'm just going by what was posted on Toohey's blog, 31 August.
That's the only reference to this group I've ever seen.
My confusion....too many Kunsches on too many useless boards.....CDC....CAC.....EIEIO...
i think it's long overdue for the member of the cdc and pa to read their by laws, and recognize their legal liabilities for being on a non profit board or authority
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