Avon Grove continues negotiations to sell its wastewater treatment plant to Aqua Pennsylvania Wastewater, Inc.
10/31/2016 12:38PM ● Published by Steven Hoffman
The Avon Grove School Board took three actions at its Oct. 27 meeting pertaining to the potential sale of the district's wastewater treatment plant to Aqua Pennsylvania Wastewater, Inc.
The district has long wanted to get out of the wastewater treatment business. The wastewater treatment facility provides service to the school campus that includes Avon Grove's administration building, the Penn London Elementary School, and the Avon Grove Intermediate School. The district sought requests for proposals from companies interested in purchasing the wastewater treatment plant early in 2015. The only company to submit a proposal was Aqua Wastewater, Inc., which provides water and wastewater services to approximately 3 million people in eight states. Negotiations between the district and Aqua Pennsylvania Wastewater, Inc. have been ongoing ever since.
Business manager Daniel Carsley explained at the Oct. 27 meeting that there are still eight or ten items that still need to be resolved before the sale can be completed. Carsley characterized the negotiations as challenging at times because there are so many complicated issues that need to be addressed.
The district also hasn't had the advantage of negotiating with more than one potential buyer. Avon Grove's wastewater treatment system is small compared to other systems that often serve multiple municipalities.
“We've had one interested buyer and it has been a challenge,” Carsley said.
There have been numerous changes in regulations made by the state's Department of Environmental Protection in recent years, and Avon Grove's wastewater treatment plant is not meeting the new standards. Upgrades to the system will be required, and there's also the possibility of fines coming from the state's Department of Environmental Protection as a result of the failure to comply with state standards. Regulatory approvals are required before a sale can be finalized.
Aqua Pennsylvania Wastewater, Inc. has offered to pay the district $100,000 for the sewage treatment plant. Along with that, Aqua would agree to spend an additional $150,000 for upgrades intended to keep the system in compliance with Pennsylvania Department of Environmental Protection regulations. Once the wastewater system is sold, the district will likely pay about $75,000 annually for connecting to the system.
The wastewater treatment system has sufficient capacity to meet the district’s needs into the future, and Aqua Pennsylvania Wastewater, Inc. would have the option of expanding the wastewater treatment plant and sell capacity to other customers in the area. The district would no longer have the financial obligations to operate and maintain the plant once the sale is finalized.
As the negotiations work toward their conclusion, the school board needed to take several preliminary steps. The school board approved, by a vote of 7-0, an Asset Purchase Agreement between the school district and Aqua Pennsylvania Wastewater, Inc. to convey assets related to the Avon Grove School District's wastewater treatment facilities and associated easements, and to authorize district officials to execute the documentation necessary for closing in accordance with the terms of the agreement.
Additionally, the school board approved an easement agreement regarding the treated effluent discharge pipe and the groundwater discharge pipe located on property owned by the school district. The Easement Agreement is to be delivered only at the closing of the related Asset Purchase Agreement. The vote was 7-0.
The school board also voted 7-0 to approve the Contract Operations Agreement between Avon Grove and Aqua Pennsylvania Wastewater, Inc. for the operation of the wastewater treatment facility.
Also at the Oct. 27 meeting, the school board approved a 36-month lease extension with Reliant Asset Management for the modular units that are utilized at the Fred S. Engle Middle School.
The next regular meeting of the Avon Grove School Board is set for Nov. 17 at 7 p.m. in the Avon Grove Intermediate School's music room.