[PRCo] County agrees to guarantee PAT losses

[Fred Schneider]

http://news.google.com/newspapers?id=vsEbAAAAIBAJ&sjid=Ck8EAAAAIBAJ&pg=1599%2C2603153
 

 

Pittsburgh Press,  Thursday August 23, 1963, page 1 (digital) or page 1 (print)

 

County Must Sign

 

Contract Drawn up for Transit System

 

  A contract guaranteeing bonds for the new mass transit system here has been submitted to the County for approval.   Judge Loran L. Lewis, chairman of the County Port Authority, said the $39,700,000 agreement has been turned over to Solicitor Maurice Louik.  Mr. Louik, now on vacation, is expected to have the documents ready for the commissioners’ signatures within the next few weeks.

    The bonds must have the County’s guarantee to be sold at a low interest rate.   The authority will use the money to pick up options on 31 independent transit firms and set up a unified system.

    January is the target date for initial operations.   The timetable has been slowed by prolonged negotiations with the Pittsburgh Railways Co. -- the lone holdout – which wanted more money than the authority offered.   Talks recently were broken off, however, and the condemnation proceedings against PRC will be instituted when the contract is signed and financing arranged.

   Judge Lewis said the authority might sell short-term notes to expedite purchase of the companies until the 30-year bonds are sold.  

   By guaranteeing the bonds the commissioners will argree to underwrite any revenue loss the system incurs.    

   The estimated first-year deficit ranges from $335,905 to $1,911,535.  The lower figure comes from the authority and the higher from a New York consulting firm. 

   Despite the deficit – which may be higher than anticipated because of rapid decline in fare paying passengers – the commissioners have indicated they will go along with the bond guarantee.

   The commissioners voted 2 to 1 last April to adopt the mass transit plan.   

    Since then the authority has been meeting with New York financiers and working out details of the bond issue.