New Castle News

January 31, 2014

Union OKs sale of sewer system

Mary Grzebieniak
New Castle News

NEW CASTLE — The Union supervisors have agreed to sell the township’s sewer system to the New Castle Sanitation Authority.

The authority will buy the system — including lines, pump stations and equipment — for $2.29 million and take over service and billing for the township’s 2,000 customers.

Union Township’s auditors put the 2014 value of the system at $2.05 million.

Supervisor Pat Angiolelli and Bryan Whiting voted in favor of the sale Wednesday night. Supervisor Robert Eckert could not attend because of a family obligation. However, a letter from Eckert was read aloud at the meeting and in it, he said he supports the sale.

As part of the agreement, sewer maintenance equipment will remain with Union and “sewer expert” Mickey DeLeone will continue to be a township employee until retirement. He will be the first one to respond to sewer problems in the township. He also will act as a liaison to the sanitation authority board and will attend all their meetings Angiolelli said.

The other two full-time sewer employees, clerical workers who do billing, will be retained for the time being to finish up township sewer billing and help with the transfer to the transit authority.

Angiolelli said the township is trying to figure out a way the two women also can be retained as township employees. He said they could possibly do code enforcement for rental properties. Angiolelli said dilapidated properties are increasingly a problem in the township and an effort to increase enforcement is in the works.

Angiolelli said the sewer system is only netting $44,279 annually for the township.

In 2012, the latest figures available, the operating revenues were $736,710. However, wages and other expenses amounted to $188,319 and government goods and services, mostly comprised of costs to transport the sewage to New Castle’s treatment plant, was $504,112.

Angiolelli noted the township would have to continue operating at that same rate for 50 years to match the sale price.

In addition, Angiolelli said, the sale frees up for other projects a $2.5 million court settlement the township had won in the 1980s because of defective sewer joints. The supervisors had voluntarily limited spending of that money to sewer expenses. Solicitor Jason Medure said he has checked and there are no limits on what that money can be used for.

Angiolelli said interest on the purchase price also can be used as a hedge to keep township sewer rates down if they are increased. Richard Christofer, sanitation authority director, said at a previous meeting that he anticipates no rate increase for at least two years.

About three dozen residents attended, many of them critical of the sale.

Some objected to loss of township control, but Angiolelli said that because Union already sends its sewage to the sanitation authority for treatment, it has no control over rates except “those we put on top ... for administration.”

He said the township also needs permission to add new business tap-ins on the system.

Angiolelli acknowledged the township will be unlikely to have a member on the sanitation authority board because state law allows the New Castle mayor to recommend members, who are then approved by city council.

Some residents questioned why the sanitation authority would make such a generous offer and whether there might be some hidden disadvantage to the township that will come to light later.

Patricia Peiffer of McCracken Drive said, “It concerns me that somewhere under the table someone is working something to their benefit, not ours.”

Angiolelli and Whiting said they knew of no disadvantages that have not been discussed. Angiolelli said the supervisors consulted with sewer departments across the state, township engineers and Pennsylvania Resource Development and Management Inc. Financial evaluation also was done by township auditors Phillip Weiner Co. and by a bonding company.

Angiolelli said the sanitation authority gains leverage in its bond rating and ability to obtain grants and loans and reduced rate financing by picking up the additional customers.

The sale is effective immediately. The supervisors were not sure when the changeover would be complete.

(Email: grzebieniak@ncnewsonline.com)