Pennsylvania American Water Company is making a $231.5 million offer to buy the Butler Area Sewer Authority.
Details of the deal were released today at the sewer board’s monthly meeting. The deal would be the second highest purchase price of any sewer system in Pennsylvania.
Butler Township Commissioner Dave Zarnick says he understands that customers may want to keep the authority as is, but the authority is facing financial troubles.
“I’d like to stay the same way too. The problem is that we kicked the can too far down the road that we’re in this problem. We’ve got to come up with a solution for this,” Zarnick said. “I give the [BASA] board members credit for the time and effort they put to get us to the point.”
“People have to remember that board members are members of this community too. We’re tax payers; we are going to be paying like everyone else. Do I want my tax bills to go up? Absolutely not. Is it a necessity? Yes,” Zarnick said.
Specifics of the deal include $49 million set aside to pay off the debt of the authority, $75 million for new infrastructure projects, and other dollars for preservation of pension funds. The rest of the funds will most likely be split between the City of Butler and Butler Township, who own the authority.
The agreement also included that current BASA employees will retain their jobs at their current salaries. The employees will also get credit for vacation and sick days.
The board also cited a new clause in the agreement that will see Pennsylvania American Water plan to initiate a pilot program that would replace or repair a customers’ current laterals to address stormwater flow.
Officials also say that the deal includes Pennsylvania American Water Company agreeing to use Butler area contractors for future capitol projects.
One of the issues customers have brought up during the eight-month negotiating periods has been fear of rate increases. According to the agreement, upon closing there will be a $2.50 monthly increase on customers bills, which would work out to an extra $7.50 per quarter. That rate will freeze for one year before Pennsylvania American Water can increase rates. However, any rate increase must be petitioned to the Pennsylvania Utility Commission.
Butler City Mayor Bob Dandoy believes the process for any other rate increase offers customers reassurance.
“There’s actually probably more consumer protections moving in this direction. At this point in time, BASA can increase rates any time they feel necessary to do so. In the future any rate increase will have to go through the PUC and be vetted in that process,” Dandoy said.
The potential purchase of BASA is a part of an ongoing trend in Pennsylvania of privately-owned water systems seeking to purchase both water and wastewater systems. In fact, last yeaer an estimated 97 percent of sewage was treated by government-operated systems.
The sale is not official and the public will have opportunities to weigh-in.
A website has been established, which can be viewed here.
There will be public meetings to allow for comments from customers. The first will be at St. Peter’s Social Hall in the City of Butler at 10 a.m. on September 27th along with another meeting at 6 p.m. that evening
The Butler Township Municipal Building will then host two meetings on September 29th–the first at 10 a.m. and the second at 6 p.m.
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