New Garden forms team to explore potential sale of sewer system
06/14/2016 12:26PM ● Published by Richard Gaw
As a measure of assurance that both New Garden Township and its residents will benefit from the proposed sale of the township's sewer system, a 13-member committee has been formed to dot the “I's” and cross the “Ts” on a proposal that, if approved by its supervisors, would transfer the rights of ownership of the system to Kennett Square-based Aqua Pennsylvania Wastewater, Inc., by early 2017.
The Sewer Sale Evaluation Committee is made up of supervisors Richard Ayotte and Randy Geouque; Greg Hanson and Mike Wolf of the township's Sewer Authority; township solicitor Vince Pompo; township manager Tony Scheivert; Spence Andress, the township's director of planning and projects; township engineer Matt Brown; township attorney Steve Goldfield; Russ McIntosh, a local expert in water and wastewater utility financing; Helen Mountain, an attorney with the law firm of Lamb McErlane; and a consultant with the firm of AUS Consultants, a utility consulting firm located in Mt. Laurel, N.J.
Late last year, the township sent out request for proposals [RFP] in order to determine potential interest and qualifications from outside companies. Two of the three initial bidders – the Pennsylvania American Water Company, based in Vorhees, N.J.; and Chester-based Delcora – chose to withdraw from consideration.
That left Aqua Pennsylvania Wastewater, Inc., and although the committee likes the general content of the company's proposal, a lot of fine tuning still needs to be done. Over the next several months, the committee will determine the “best path forward” by evaluating the proposal further, so that it may may be able to craft the content and structure of a sale.
Part of the negotiation will include considering methods of allocating and leveraging the purchase price in order to achieve the best return. One way to do that will be determining how to work cooperatively with Aqua Pennsylvania in a “public-private partnership” (also known as a “P3 arrangement”), a scenario where the buyer would complete certain agreed-upon projects related to the purchase, the value of which would be used as credit toward the purchase price of the system.
The committee is also expected to deliberate what the township will do with the proceeds from the sale, which include the idea of using the proceeds to pay down the township's debt; creating programs to stimulate economic development and investment in the township; freezing sewer rates; dedicating funds toward open space preservation; and making immediate capital improvements, which would include addressing bridge, road, culvert and storm water infrastructure, park improvements and historical preservation opportunities.
A primary reason the township is exploring the concept of selling may have a lot to do with the fact that the current sewer system is considered to be too old, and too expensive to repair. Andress said at a 2015 November presentation that over the next seven to nine years, the township will be expected to spend between $9 million to $12 million to upgrade or replace these systems – if it chooses to maintain ownership of its sewage system.
The Toughkenamon stretch of the system was installed in 1969; another section was built in 1998; and the system in Somerset Lake was built in 2001 – all sure signs that there could be trouble in the future, given that the life expectancy of these systems range from 25 to 45 years.
Another pending talking point will be how the potential sale of the system will affect local sewer rates in the township. A vote on the sale will likely take place in July, and public meetings will be scheduled over the course of the next several weeks, prior to the final vote. The goal of the committee will be to a) keep the public informed during the negotiation process, through website postings and meetings; and b) encourage public input, which will serve as a factor during negotiations between the township, the committee and Aqua Wastewater, Inc.
To contact Staff Writer Richard L. Gaw, e-mail firstname.lastname@example.org.