Bids to be opened March 16 for sale of sewer system

UPPER POTTSGROVE » Township commissioners are pressing ahead with their exploration of the sale of the sewer system.

During Feb. 18 commissioners’ meeting, board Chairman Trace Slinkerd said bids for the system will be opened on March 16.

The board of commissioners will meet in “executive session,” from which the public is excluded, on March 18 and March 25.

Also on March 25 and on April 2, Slinkerd said public meetings will be held to entertain questions and comments from the public on the matter.

(Additional meetings may be scheduled on April 6 and April 8 if needed, he said).

Slinkerd said the commissioners are expected to vote on the matter on April 20.

That will make about a year since the matter was first raised publicly.

Last April, 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.

Aided by Act 12, Exeter Township in Berks County sold its sewer treatment plant to Pennsylvania American Water Co. for $96 million in October.

More recently, on Nov. 19, Royersford Borough Council voted to sell that borough’s sewer system to Pennsylvania American, which provides the borough’s public water, for $13 million.

In August 2018, neighboring Limerick Township sold its much larger 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.

Limerick’s annual average sewer rate of about $384 will be frozen for one more year under the law.

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 nearly $9 million in debt, money spent to expand the system to homes with failing septic fields and failing systems, like the Regal Oaks subdivision off Gilbertsville Road.

About 35 percent of the quarterly sewer bill goes to debt service on the system extension.

If the Upper Pottsgrove system is purchased, the debt would still be owed by the township, so is one place the money from the sale could be spent, Bealer said last year. Slinkerd has said money from the sale could additionally be used for needed facility upgrades, like to the police station and a desperately needed new salt shed.

In the meantime, work continues on the system.

Tuesday night, the commissioners approved a bid from Doli Construction for another phase of the Regal Oaks sewer system project. The bid of $537,440 was within the budget for the project, which benefits from a $200,000 state grant to cover part of the cost.

In response to a question from Commissioner Martin

Schreiber, Township Manager Michelle Reddick said the township will not have to pay back the grant if the township sells the sewer system.

The project will connect 26 homes on Rose Valley Road and Holly Berry Court, as well as seven homes on Gilbertsville Road.

The one thing that makes the Upper Pottsgrove system sale different from other recent area sales is that the township does not own a treatment plant. Like parts of Lower Pottsgrove and West Pottsgrove townships, Upper Pottsgrove pays to have its sewage treated at the Pottstown Wastewater Treatment Plant on Industrial Highway before being discharged into the Schuylkill River.

As a result, the Pottstown Borough Authority, which owns and operates that plant, may have a say in the sale.

There is a “sewer services agreement” under which the authority agrees to accept and treat the township’s outflow.

The authority would have to approve the re-assignment of that agreement to a new owner, or the new owner could negotiate a new agreement with the authority, explained Authority Solicitor Vincent Pompo.

Additionally, moving that agreement from a government body to a forprofit company would also require approval by the Pennsylvania Public Utility Commission.

This article first appeared as a post in The Digital Notebook blog.