It's official: New Garden to sell its sewer system
08/16/2016 12:48PM ● Published by Richard Gaw
By the time New Garden Township supervisors, representatives from Aqua Pennsylvania Wastewater, Inc. (Aqua), members of the township's Sewer Sale Evaluation Committee and about 50 residents sat down on Monday night at the township building, the general consensus was that it was all over but the signing.
As expected, the supervisors gave final and unanimous approval to the sale of the township's sewer system to Aqua for the price of $29.5 million, at its Aug. 15 meeting.
As part of the sale, Aqua will contribute $20,000 toward the township's closing costs, assume responsibility for the system's permits and assets, and be responsible for the provision of wastewater service to customers. Aqua will also complete all modifications, improvements and requirements, in order to meet all regulatory agency requirements, and make all repairs to the sewer system's infrastructure, which would save the township from having to shell out an estimated $12 million over the next four years, as specified in the New Garden Sewer Authority's five-year plan.
Proceeds of the sale will be targeted toward paying off the debt on the sewer system, reserving funds to satisfy pre-existing obligations of the system; establishing capital funds for vehicle and equipment purchases; funding several capital improvement and maintenance needs, such as repairing roads and bridges; establishing a tax stabilization fund to offset future real estate tax increases; and providing funding for the township's park.
Proceeds from the sale are also expected to go into the construction of a new home for the newly-formed Southern Chester County Regional Police Department, a merged cooperative between the New Garden Township Police Department and the West Grove Borough Police Department.
As a result of the purchase, Aqua will complete all infrastructure repairs to what many in the township have deemed an outdated system, saving the township from having to invest about $12 million over the next four years, and passing off savings to its new customers.
Sewer rates will be frozen during the first two years following the sale, and in following years, rates will be compounded at a four percent annual growth rate over the next ten years. At the end of ten years, the anticipated user charge will be $263 per quarter.
Comparatively, those numbers fall well below the rate that users would pay if the township decides not to sell the system. With no sale, the cost of projected upgrades to the system's infrastructure – as well as increased financing and operating costs – would have increased sewer rates 40 percent in 2017, an additional 27.5 percent in 2018, and at the end of a ten-year period, customers would have paid $340 per quarter.
“The township needed to make the decision whether they were going to raise the money through a bond, or sell their assets and let us come in and put the capital in and make the necessary improvements,” said Charles Penrose, director of business development at Aqua. “Over the next few years, that is exactly what we intend to do.”
For many in the business of the township, the vote served as the culmination of two years of research, proposals, assessment, meetings and public presentations.
“I think they key is starting small and getting consensus among the (township's) Sewer Authority and supervisors as to the ultimate objective, which was to evaluate the viability, feasibility and the appropriateness of pursuing a sale,” said Spence Andress, a member of Sale Evaluation Committee. “It was not entered into as 'This is what we want to do.' Our whole approach was (to approach the potential sale) as an alternative, and we wanted to evaluate that alternative, and through the matrix, and at the end of the day, see which one comes out on top.
“Along the way in that process, to bring in experts as necessary, and the public, in order to keep the the information flowing. I think the length of time is testimony to how deliberate the process has been, and how involved and engaged both boards have been, and the commitment to make it as open and informative as possible.”
Penrose said that the transaction is expected to be finalized in the spring of 2017.
“Aqua treats every municipality and every customer as an individual,” he said. “Everyone has different needs such as public parks and open space, and anything we can do help and cooperate within the community, we will get involved. That's a reputation we've had for a number of years, and we want to continue it here.”
To contact Staff Writer Richard L. Gaw, e-mail email@example.com.