About the Sewer Sale
On May 27th, 2022, in a 4-1 vote, the Board of Supervisors voted to authorize the sale of the sewer system to NextEra.
When that sale fell through, on March 22, 2023 they voted again in another 4-1 decision to sell to PA American Water Company (PAWC).
Rates will go up significantly. In fact, they will triple.
Current Towamencin rates are $450 a year. Current PAWC rates are $1,272.
The contract with PAWC does not include any phased in rate increases. Additionally, there is no guarantee what PAWC rates will look like in the future. In 2021, PAWC received approval from the PA PUC to raise rates by 30%, and less than 2 years later received approval to raise rates by another 39%.
Costs such as infrastructure upgrades & repairs will exist, and need to be included in sewer rates, regardless of whether or not we sell to a private entity. However, by selling to PAWC, we would also be paying shareholder profits and for the expense of acquiring our own system (that we already own). Pending Fair Market Valuation, PAWC will be entitled by Pennsylvania law to recover $8-12 million a year on top of what is needed to run the system, forever. The repayment on the acquisition does not end when PAWC has extracted the sales cost from us. Towamencin residents will be paying back this defacto loan well after PAWC has recouped their money - we’ll be paying it forever.
The Supervisors are playing fast and loose… with our money
The Supervisor’s financial analysis, released only after they approved the sale, states that PAWC rates will be only $1,344 after 10 years. Considering that rates are already $1,272, and have seen steady increases over the past several years, it defies common sense that rates will only increase $72 over the course of a decade! This is the basis upon which they argue that this is the least expensive option to raise funds for our township. We, the residents, aren’t buying it.
The Supervisors choose to initiate this process BEFORE updating our Comprehensive plan, which dates back to 1989. How can we trust them with the proceeds of this sale, when they didn’t even bother to research and plan for the future needs and wants of our township?
The 4 Supervisors are choosing to fund initiatives with a back-door tax by subjecting residents to a lifetime of ever-increasing sewer fees. Corporate rate hikes affect low and fixed-income residents the hardest. Many citizens have spoken out, indicating that they fear they will be priced out of their homes by this sale.
Residents asked for transparency in this process but did not get it - TWICE.
Prior to holding town halls in 2022 regarding the advisability of selling the sewer systems, analysis of the bids and recommendation on the preferred buyer was completed by a ‘sewer committee’. By the Board’s own admission, only 2 of the 5 board members were included in the committee. Not only did this limit participation during in-depth analysis and discussion, but it also shielded the discussions from the Sunshine Act, which is in place to provide transparency in public matters.
During the public town halls, PFM (the firm hired to assess the bids submitted to the township) only presented an analysis on the bid from NextEra, the highest bidder. PFM’s consulting fee for analyzing the bids was nominal ($9,500) when compared to the fees they receive if the township sells (the higher the sale price, the higher their payoff - $807,000 in the case of NextEra & $728,00 in the case of PAWC).
Citizens asked to see the full analysis for all 5 bidders performed by the ‘sewer committee’ and PFM, but this information has not been released.
When the Board of Supervisors moved to change the buyer from NextEra to PA American Water Company, they did not include this business in the agenda required to be published beforehand. Despite knowing that there is great public interest in this sale, they voted at the beginning of the March 8, 2023 meeting to add it to the agenda, leaving citizens caught off guard & many without the opportunity to be present to provide public comment on the matter.
They took their final vote to authorize the sale to PAWC on March 22, 2023, but not before announcing new public comment guidelines, which included no response by the Supervisors to questions from the residents & that individuals should not repeat what others had previously said.
The Board of Supervisors also showed a lack of judgment in their original vote to sell to NextEra.
At the time of the 2022 vote, NextEra had no experience in operating municipal sewer systems and was not approved as a utility by the Pennsylvania Utility Commission. They were headquartered out of state. The owners of the system wouldn’t have even been involved in the operation of the sewer system, but would have instead contracted that out to US Water, which was also unregulated in PA.
Towamencin residents were not the only ones taking note of this situation. Formal protests to the PA Public Utility Commission were filed by the PA Office of Consumer Affairs and the PA Bureau of Investigation & Enforcement, questioning the fitness of NextEra to purchase the sewer system.