Investment Agreement Approved After Snag Over Clause Settled

Posted: January 21, 1988

Upper Southampton knows how to make money quick. But there's a catch.

The township participates in a program with Philadelphia National Bank and Core States Capital Markets Group in which township funds are invested overnight. At the close of banking hours, PNB uses the township's money to buy government securities, then sells them back to the government when the bank opens the following day - with the township collecting the interest.

On Tuesday night, the Upper Southampton Board of Supervisors was asked to approve a new master repurchase agreement with PNB to continue the program. The supervisors balked, however, at one of the provisions of the agreement.

According to township solicitor Daniel Lawler, there is a clause in the agreement that permits the bank to invest the township's funds with funds from other businesses or municipalities.

Municipalities in Pennsylvania, however, are prohibited by state law from having their funds invested with funds from other entities. The board voted, 4-0, to approve the agreement with the clause permitting co-mingling of funds deleted.

Lawler said he has experienced this problem in Lower Southampton Township and Bucks County. According to Lawler, some banks on a countywide basis are rewriting their repurchase agreements to accommodate the county and other townships.

In other business Tuesday, the board asked township officials to approach the Centennial school board to determine if the district would join the township in arguing against an assessment appeal filed by C.W. Industries.

In October, the Bucks County Assessment Appeal Board denied a request by C.W. Industries to have the assessed value of its property, located at 130 James Way in the County Line Industrial Park, lowered from $153,500. C.W. Industries has appealed that decision to the Bucks County Court of Common Pleas.

C.W. Industries did not indicate in court papers how much it wants the assessment lowered. At the township's tax rate of 39.9 mills, C.W. Industries would pay $6,124.65 a year in real estate taxes under the current assessment.

Lawler suggested that if board members want to testify at the appeal hearing this spring, they may want to do so in conjunction with the school board. The two boards then would split the fees for a real estate expert to assess the property and attorney's fees on a pro-rata basis according to the millage rates of the township and the school board.

With a tax rate of 168 mills, the school district would collect $25,788 in taxes from C.W. Industries this year. The supervisors asked township manager Robert M. Pellegrino to find out if the school board would join the township, what portion of the fees the district would pay, and how much C.W. Industries wants to lower its assessment.

The supervisors will decide Feb. 2 if it is financially feasible to testify.

|
|
|
|
|