Borough sewer authority reps balk at payment

OXFORD » The Oxford Area Sewer Authority is turning to its four member municipalities to help pay the $1.2 million debt it owes on a $27 million USDA loan, with mixed results.

The situation was discussed at the Monday, March 27, meeting of the Authority Board, which was postponed from March 21 due to the snow storm.

While East Nottingham, Lower Oxford and West Nottingham have each approved motions to pay a share or a portion of it, for the past due amount due by Aug. 1 or the upcoming regular payment, due in June. Their motions are conditioned on all four authority members making payments, and Oxford Borough is declining to pay.

The loan originated in 2010 to cover costs of sewer plant capacity expansion, but with an unexpected downturn in new housing starts, the authority income dropped and they were unable to meet expenses.

The Sewer Authority has come to a “work out agreement” with USDA to the effect that they will continue to make their scheduled payments on the loan while taking steps toward repayment of the $1.2 million they defaulted on in 2016.

According to the agreement, the authority must have a balanced budget, and take steps to sell a 35acre lot on Brick Street and their Third Street office building. The parcel of land has been listed for sale, but so far the authority has not listed the building.

John Schaible, one of the borough’s two representatives on the Authority Board, pushed for action to list the building for sale, but could not get a motion on the floor. “I don’t see how we can pass the buck without doing our due diligence and put this building on the market,” he said.

For some board members, the building sale is in question since the borough condemned a 600 square foot area behind the structure and an easement from the back of the building to Second Street. Both are wanted by the borough for the construction of a threelevel parking garage that is planned. The authority may be contesting the condemnation, and until that is resolved it clouds the potential sale.

In a response letter to the authority, the borough contends that they were not given proper notice of a shortfall for this year so they could prepare and budget for the payment. They also object that the failure to list the property for sale as USDA has required.

The authority is hoping the townships will reconsider, and make payment even if the borough does not. Authority Board member Frank Lobb made a motion to require payment from the municipalities, but action was tabled until next month.

“There is a guarantee all the municipalities signed,” Lobb said. “It lets the authority go forward with a good set of books.”