Tuesday, April 2, 2019

Upper Pottsgrove Ponders Selling its Sewer System

Photos by Evan Brandt

Upper Pottsgrove Commissioners Chairman Trace Slinkerd outlines some of the financial challenges facing the township in the coming years.

Despite the fact that it does not own a sewage treatment plant, Upper Pottsgrove Township has been approached by two private companies about selling its sewer system, it was revealed during a work session Monday night.

The revelation was a while in coming, as Commissioners Chairman Trace Slinkerd began the discussion by talking about the financial challenges the township faces and he made no mention that he was trying to outline how selling the sewer system might alleviate some of those challenges.

But Commissioner Elwood Taylor pressed to make it clear to the small audience at last night's meeting.

After the meeting, Sewer Committee Chairman and former commissioner John Bealer said the township was approached by Aqua PA and Pennsylvania American Water about selling the system.

Ever since the passage of  Act 12 in 2016, private utility companies like Aqua and PA American Water have been on a buying spree.

The act changes the way the systems are valued and allows municipalities to charge much more to sell the system than they previously did. This makes overtures from private companies much more attractive because the sale prices are much higher.

Just last summer, Limerick Township sold its system for more than $75 million to Aqua PA, in a move that allowed the township to eliminate debt and fund several capital projects, but may also mean a rate hike for Limerick customers of as much as 84 percent.

To be fair, Limerick's annual average sewer rate of about $384 will be frozen for three years under the law. And Upper Pottsgrove's annual bill is about $860, one of the highest in the area.

That may be because the system has about 1,600 "equivalent dwelling units," which is how sewer charges are calculated, that together have to should the nearly $9 million in debt it cost to expand the system to homes with failing septic fields and failing systems, like the Regal Oaks subdivision off Gilbertsville Road.

Bearler said about 35 percent of the quarterly sewer bill goes to debt service on the system extension.

If the system is purchased, the debt would still be owed by the township, he said, so that would likely be the first place the money from the sale would be spent.

Bealer said because rates are often frozen for three years under the tenants of the law, as was the case in Limerick, the system might be attractive to private buyers because of the profit margin of higher rates to pay off a debt that no longer exists.

He said he would only support the sale if it could lower rates for customers, which both Krazalkovich and Slinkerd suggested could happen.

However, Upper Pottsgrove does not own a sewage treatment system, unlike Limerick.

Instead, Upper Pottstown, along with Lower Pottsgrove and West Pottsgrove townships, send their sewage to the Pottstown Wastewater Treatment Plant, owned and operated by the Pottstown Borough Authority.

There is no price determined yet and the township commissioners met in closed door executive session at the end of the meeting to discuss the matter. Comments by Slinkerd suggest that the municipal financial firm of PFM may be who he has in mind to determine that price.

But even without a price, Slinkerd and Vice Chairman France Krazalkovich were ready to start discussing how that money could be spent, including retiring the sewer debt, as well as funding improvements to the township's buildings.

However Taylor warned that once the system is gone, customers would no longer have the ability to complain about or dispute their bills with their local government, and would instead have to contend with a large corporation.

"Our people will not have a say," said Taylor, noting that local politicians are easier to replace than big corporations.

Krazalkovich, pointed out that local government tried to control trash collection in town and that did not work. But people saved money after the townwide contract expired and was abandoned because people had a choice of which hauler to chose. There was competition.

That will not be the case with a sewer system, said Taylor. "This is a monopoly interested in making money. The local government is not interested in making money," he said.

Slinkerd said that Fortune 500 companies like Aqua and PA American Water are better equipped to manage sewer systems than small townships. "Profit is not evil," he said.

PAL Carnival Coming?

Seth Lawrence talks about how the proposed carnival would be 

arranged on the PAL site in Upper Pottsgrove.
Before the Upper Pottsgrove Commissioners started talking shit (whoops), they heard from Seth
Lawrence about the Pottstown Police Athletic Leagues efforts to stage a carnival and fireworks at its fields off Chestnut Grove Road.

The carnival is planned for five days at the end of May and beginning of June, said Lawrence.

The group is hoping 4,000 to 5,000 people will visit over the five-day span, said Lawrence, who noted that the site currently has 1,000 parking spaces.

Concerns were raised about the impact of the event on neighbors of the site; safety; and the fact that currently, the township zoning code does not allow such events there.

Lawrence said the event would be similar to the fair the Norco Fire Company stages each year in July, and that the fireworks planned would last for 25 to 30 minutes.

More discussions are needed before the matter is decided, but the group is on a tight time-line and we might see some votes at the board's next meeting on April 15.

And with that, here are the Tweets from the meeting:

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