Infrastructure Bank converts plans to reality
Awaiting its second round of applications, Butler County’s Infrastructure Bank had already helped advance projects and fostered an air of intergovernmental cooperation, according to Mark Gordon, the county’s chief of economic development and planning.
“Some of our county’s municipalities are taking that proverbial piggy bank, turning it over and shaking out the pennies because they aren’t in a position to put out substantial funds for infrastructure projects,” Gordon said. “By putting this low-interest funding in place, we can help them make needed improvements more manageable.”
Gordon said the program fosters municipalities working together with financially attractive funding that won’t break the bank. In turn, he said the effort leads to opportunities being more solutions-oriented.
And, with increased shale gas impact fee revenue this year, the county has even more to invest.
Impact fees are paid per-well by drillers to the state Public Utility Commission, which then divvies up the total. Over the past eight years, the PUC collected nearly $1.7 billion in fees.
The bulk of those funds return to the counties and municipalities hosting wells. Butler County has been among the more fortunate recipients. With a reported 579 wells, the county this year has the seventh-highest number of unconventional gas wells of those where drilling is under way.
Since it’s first $741,000 allocation in 2012, the county’s revenue share has ebbed and flowed. This year, it received $3.1 million, according to the PUC.
In authoring the 2012 controlling legislation, officials identified 13 categories potentially affected by the drilling process where revenue could be used to cover costs. Those include roads, bridges and public safety.
Butler County has traditionally allocated the largest slice of its revenue to the general fund. However, beginning last year it distributed its first round of funding through the Infrastructure Bank. Gordon explained that impact fee revenue deposited into the bank is leveraged in the bond and financial market to create low-interest funding.
In that first round, $8.5 million was used to fund four projects at a 1.5 percent interest rate and 10-year loan term. Projects included:
n The MSA tunnel that will allow access to Cranberry Woods under Route 228.
n Main lines in a sewer replacement project in Cranberry Township.
n Butler Main Street streetscape.
n Flood control along Sullivan Run in Butler.
Those projects, Gordon said, have until the end of this year to draw down their allocated funding, after which they will be on a twice a year repayment schedule. The incoming payments coupled with new fee revenue will perpetuate infrastructure bank lending.
The infrastructure bank fund also receives a portion of the county’s Marcellus Legacy Fund revenue. The fund provides financial support for environmental infrastructure throughout the state. This year, Butler County was allocated more than $200,000 of the state’s $90 million fund.Gordon said the Infrastructure Bank also carried a $1.1 million fund balance.
While county officials note the large scale impact of projects in areas like Cranberry Township, County Commissioner Kevin Boozel said he also finds it gratifying to see initiatives by smaller municipalities that “don’t have grant writing staff and engineers and the resources of the larger municipalities but they still need the same infrastructure, and turnkey organizational help.”
Boozel said the success of the infrastructure bank’s first round of funding helped alleviate any community skepticism about the program, and now officials are receiving inquiries from municipalities around the county.
Applications are still being accepted for the second round, which will be awarded around year’s end. But, officials warn, interested municipalities should express intent as soon as possible as these application require a developed action plan.
Already, Gordon said, at least a handful of municipalities have spoken to county officials about applications planned for the new round. Officials in Zelienople, for example, are expected to seek more than $3 million for stormwater management and continuation of the Main Street revitalization initiative.
“Municipalities are working collectively to improve the overall state of affairs,” said Gordon, who noted one of the program goals is to level the application field for all interested communities.
“Ask 100 people, ‘Where is center of economic activity in Butler County?’ And they will answer, ‘Cranberry.’ But we’re a county of around 200,000 residents, and we have some wonderful attributes throughout.”
