$3.7 million transaction for Penn Township's wastewater treatment system is now complete
04/02/2014 10:44AM ● Published by ACL
By Steven Hoffman
On Tuesday morning, April 1, Aqua America, Inc. officially took over operations of the wastewater treatment system in Penn Township, completing a $3.7 million transaction that also includes approximately 45 acres of land.
Aqua America was the successful bidder when Penn Township put the wastewater treatment system up for sale last summer. The system provides service to 776 residential and 25 commercial customers, including Jennersville Regional Hospital. Aqua America plans to spend about $2 million to upgrade and expand the capacity of the system and bring it into environmental regulatory compliance.
Curtis Mason, the chairman of the Penn Township Board of Supervisors, who was instrumental in the township's purchase of the wastewater treatment system back in the mid-1990s, said that it was time for the township to get out of the business of operating a sewer system. One major reason to sell the system now is that it removes the township's responsibility for costly upgrades that would be necessary to stay in compliance with new environmental regulations that are being phased in.
“This is a win-win for the township and I'm happy that someone like Aqua America bought it,” Mason said, explaining that the company has expertise in operating a wastewater system that the township simply couldn't match. The township has relied on Lancaster County-based Singh Operational Services, Inc. to run the wastewater plant, and Mason said that the company has done a good job. But the chore of overseeing the operations was still taxing for Penn Township's small staff of three employees.
The wastewater treatment system will now be operated by one of the largest publicly traded water utilities in the U.S. Aqua America, Inc. serves nearly 3 million people in Pennsylvania, Ohio, North Carolina, Illinois, Texas, New Jersey, Indiana, and Virginia. Aqua America now has 1.4 million customers in 31 counties throughout Pennsylvania.
When the township initially purchased the wastewater treatment system from Jennersville Regional Hospital, which was known as the Southern Chester County Medical Center at that time, it had a capacity of just 100,000 gallons. The township completed that purchase for slightly more than $500,000 and then set out to expand and improve the system to meet the township's needs. The township specifically needed a public sewage system to attract commercial growth to the area.
“The only way that we could make the commercial district grow was by having public sewage,” Mason explained.
The acquisition of the wastewater system enabled the township to become a hub for commercial and residential growth in southern Chester County. The township specifically targeted age-restricted communities so that the residential growth didn't include adding students to the local school system. Several medical buildings were built in the commercial district. The Jennersville YMCA expanded. The technical college high school was built in Penn.
“Those new developments that we had wouldn't have happened without that public sewage,” Mason explained.
All those developments expanded the tax base. The township also made sure that developers paid their fair share to keep expanding the system or extending the sewer lines. This allowed the township to avoid utilizing taxpayer money to operate the sewer system. Rather, the burden was shared by the users of the system.
Eventually, the township implemented a second-use system where water was sent to the Conard-Pyle facility, one of the township's largest businesses.
Mason said that customers will soon receive a final sewage bill from the township and future bills will come from Aqua America. As part of the comprehensive acquisition agreement, Aqua America agreed to lock in rates for at least two years. The company will have to get authorization from the Pennsylvania Public Utility Commission for rate increases after that.
Mason also noted that the township still has considerable control over the operations of the sewer system because changes would have to be in compliance with regulations in the township's Act 537 plan and approved by Penn Township's Board of Supervisors.
Mason admitted a sense of relief in knowing that the township was no longer responsible for running such a large wastewater treatment plan.
“It was a lot of work, but in the end, it paid off for the township,” Mason said.
He added that now that the township officials no longer have to be concerned about the wastewater treatment system, there will be more time devoted to planning future projects. The township purchased the Red Rose Inn last year, and some of the building will be removed to create room for a right-of-way so that improvements can be made to the intersection of Route 796 and Baltimore Pike. The Red Rose Inn will be remodeled, and a community center will be built on the site. The township also may begin looking for property that is suitable for an active recreation park.