Oxford Borough officials want Lennex to resign
10/11/2016 12:35PM ● Published by Steven Hoffman
Citing “a number of misrepresentations” and “a blatant lack of communication” regarding the Oxford Area Sewer Authority’s dire financial situation, Oxford Borough officials are calling for the ouster of Edward Lennex, the executive director of the Oxford Area Sewer Authority.
At Monday night’s Oxford Borough Council meeting, council president Ron Hershey read from a prepared statement outlining some of the issues that borough officials and residents have with the Oxford Area Sewer Authority’s operations. The message was clear: Local officials felt blindsided by the state of the Sewer Authority's financial situation, and the leadership of the Sewer Authority has fallen short of reasonable expectations.
The Sewer Authority is managed by an eight-member volunteer board. Lennex is the highest-ranking paid administrator, and is in charge of the day-to-day operations.
“Our residents have lost confidence in the current leadership, and specifically executive director Ed Lennex,” Hershey read from the statement, which concluded with a call for the Oxford Area Sewer Authority Board to demand Lennex’s resignation immediately.
Borough Council unanimously agreed to notify the Oxford Area Sewer Authority Board of its current position.
The Sewer Authority is facing significant revenue shortfalls and has been unable to make the debt-service payments on a $27 million loan that paid for a major expansion of the Oxford area’s public sewage system. In July, the Sewer Authority Board approved a 30 percent increase for customers, but the Sewer Authority could still be facing a budget deficit of as much as $1.5 million at the end of the year. Another debt-service payment is due in December.
In order for the Sewer Authority to secure that $27 million loan about five years ago, the four member municipalities – Oxford Borough, East Nottingham Township, West Nottingham Township, and Lower Oxford Township -- had to agree to back the loans. Each municipality accepted a portion of the debt-service payment in the event that the sewer authority could not make those payments in a given year. Oxford Borough accepted 44 percent, East Nottingham accepted 28 percent, Lower Oxford accepted 16 percent, and West Nottingham accepted 12 percent.
With the Sewer Authority facing significant revenue shortfalls, the burden of paying the balance of the debt-service payments could soon fall to the four municipalities. The supervisors and council members in those municipalities have been having discussions with Sewer Authority officials about the best path forward.
Elected officials of the four municipalities are not happy with the current situation.
Making matters worse is the fact that many current supervisors and council members were in the same positions when the Sewer Authority secured the large loan with the backing of the municipalities. At that time, Lennex told local officials that the municipalities would not be put in a position to cover the Sewer Authority’s financial obligations, because the Sewer Authority can raise rates on users to balance its own budget. What the sewer authority did not anticipate was having shortfalls so large that even a massive 30 percent increase couldn’t fully fund the debt-service payments.
Sewer Authority officials have said that the financial woes they are facing can be largely attributed to one factor – five years ago, when municipalities provided the sewer authority with the number of Equivalent Dwelling Units (EDUs) that they anticipated needing for projects that were on the books, those figures are much higher than the actual number of EDUs that have been purchased so far. Purchases of EDUs have been particularly slow in the three townships, and that has led to actual revenues being far short of anticipated revenues at this point.
At the meeting in July when the Sewer Authority board voted to raise the rates, several local officials expressed concerns that Lennex had made presentations to the municipalities within the last year and left them with the impression that the Sewer Authority's finances were in a strong position. As the top administrator at the Sewer Authority, Lennex was in the best position to know that a financial firestorm was in the offing.