The City of Lancaster plans to borrow some money in case state funding for its new fire stations doesn’t come through. 

Separately, it needs to serve as guarantor for bonds the Lancaster Parking Authority will be issuing to pay for its library and garage project in Lancaster Square.

City Council heard previews of both matters at its meeting Monday.

Fire stations

Replacing Lancaster’s fire stations at 425 W. King St. and 333 E. King St. is expected to cost $4 million to $5 million apiece

The city is seeking a $4 million grant though Pennsylvania’s Redevelopment Assistance Capital Program, which it would combine with existing funding sources to build the stations.

Lancaster's two King Street fire stations to be replaced

But it won’t know if it’s getting the grant until late this year or early 2020, Patrick Hopkins, director of administrative services, told council members.

Meanwhile, bidding has to move forward. So the city is looking to borrow the amount it wouldn’t be able to cover with existing funds.

If the state grant comes through, the borrowing can be reallocated to other projects on the city’s to-do list, such as street repairs, Hopkins said.

The city expects to seek the council’s authorization for the borrowing in August, Hopkins said. The amount is still being determined, he said.

Lancaster firefighters to relocate at Manheim Township station during city station overhaul

The city is looking to save around $200,000 by seeking bids on both fire stations together. It recently approved an agreement with Manheim Township that allows city firefighters to relocate to a township fire station while the first city station is rebuilt.

Lancaster Square garage

The Lancaster Parking Authority, meanwhile, is moving forward with its Lancaster Square plans.

The authority intends to build a 300-space parking garage on the square’s east side between the Holiday Inn Lancaster and 101NQ. The annex there now is to be demolished.

The garage would sit atop two floors occupied by the Lancaster Public Library, which plans to relocate from North Duke Street.

The authority intends to issue bonds for the project shortly after Labor Day, Jay Wenger of Susquehanna Group Advisors told City Council.

Parking authority appears close to launching Lancaster Square garage, library project

The city would guarantee an amount not to exceed $35 million. That’s far more than the tentative project cost of $23 million.

“We have to estimate high” to meet state regulatory requirements, Wenger told council members.

Debt service on the bonds will be paid out of parking authority revenues and City Revitalization & Improvement Zone revenue generated by 101NQ. Some funding could eventually come from the Holiday Inn Lancaster’s CRIZ increment, too.

The city’s guarantee would kick in only if those sources were insufficient.

Years ago, when demand for downtown parking was tepid, the authority struggled, and it needed some debt-service assistance from the city, Hopkins said.

That money was subsequently repaid. The authority reduced its debt and is posting healthy cash surpluses — $1.26 million in 2017 and $1.65 million in 2018. Its financial position is “quite good,” Hopkins said.

City Council is scheduled to introduce an ordinance authorizing the guarantee Tuesday, setting up a vote in August.