City finalizes authority’s sale to Pennsylvania American

The $159 million sale of the Municipal Authority of the City of McKeesport to Pennsylvania American Water Co. has been finalized.

“Today’s closing brings great excitement and financial hope to the city of McKeesport, but it’s important to start looking ahead and working to correct the city’s deficit,” Mayor Michael Cherepko said Monday, the day the deal closed.

Under the terms of the sale, Pennsylvania American Water will not increase the base wastewater rates for the first calendar year. The rates are regulated by the Public Utility Commission and any future change would have to be approved by the commission.

Low-income customers of the former authority will be eligible to apply for assistance through Pennsylvania American Water’s H20 Help to Others Program.

All of the employees of the authority who operate the wastewater system have been offered employment, subject to a standard pre-employment screening.

At a meeting earlier this month, Mr. Cherepko said mostof the funds from the sale of the authority would be invested, but he stressed that some of the money will be needed in the immediate future to address paving and demolitionin the city.

“Our goal is to have at least 150 houses down next year,” Mr. Cherepko said.

The sale of the authority to Pennsylvania American Water is the first acquisition completed under the state’s Act 12 of 2016, which allows municipalities to sell water and wastewater systems for a price based on the fair market valueof the system.

“Prior to the passage of Act 12, the depreciated cost of this system might have prevented the city of McKeesport from the opportunity for financial stability,” said Jeffrey McIntyre, president of PennsylvaniaAmerican Water.

Before the sale was approved, it had been reviewed by the U.S. Environmental Protection Agency, the state Department of Environmental Protection, the state Public Utility Commission and the Allegheny County Health Department.

Customers who were served by the authority in McKeesport, Dravosburg, Duquesne, East McKeesport, Elizabeth Township, Glassport, Liberty, Lincoln, North Versailles, Port View, Versailles and White Oak will now be served by PennsylvaniaAmerican Water.