Consultant hired to oversee Oxford Area Sewer Authority
02/21/2017 01:18PM ● Published by Steven Hoffman
Keystone Alliance Consulting has been hired as a consultant to oversee the Oxford Area Sewer Authority as it attempts to resolve significant financial issues that have developed just a few years after a major expansion of the wastewater treatment plant that serves the Oxford area.
The Oxford Area Sewer Authority Board interviewed three different firms and ultimately decided to hire David Busch and Keystone Alliance Consulting, a company based in Ambler, Pa., to lead the operations of the Oxford Area Sewer Authority. The firm will be handling most of the duties that were previously the responsibility of Ed Lennex, the former executive director of the Oxford Area Sewer Authority. The sewer authority board voted to terminate the contract with Lennex in January.
The sewer authority hasn't been able to make the debt-service payments on a $27 million loan from the U.S. Department of Agriculture that was used to expand and increase the capacity of the wastewater treatment plant. The sewer authority blamed its revenue shortfalls on the fact that purchases of Equivalent Dwelling Units (EDUs) for commercial and residential developments have lagged far behind the projections that the submitted by the municipalities when the sewer authority updated its Act 537 Plan six years ago. The sewer authority board, comprised of eight members—two each from Oxford Borough, East Nottingham Township, Lower Oxford Township, and West Nottingham—voted last July to raise rates by 30 percent. But even with the sizable increase, the sewer authority was still facing significant revenue shortfalls.
In order for the sewer auhtority to secure the $27 million loan, the four member municipalities had to agree to back the loans, with each municipality accepting a portion of the debt-service payment in the event that the sewer authority could not make its debt-service payments in a given year. Oxford Borough accepted 44 percent of the financial responsibility, followed by 28 percent for East Nottingham, 16 percent for Lower Oxford and 12 percent for West Nottingham.
Elected officials and solicitors for the four member municipalities spent the latter part of 2016 attempting to work out an agreement with the USDA that would give the sewer authority board some time to find a long-term solution to the financial issues. The top priority for Busch as Keystone Alliance Consulting comes on board will be to work out a plan with the USDA to address the immediate financial issues plaguing the Oxford Area Sewer Authority.
Keystone Alliance Consulting has worked directly with municipalities and engineering consultants to provide a wide range of municipal financial services, including completing rate filings for submission to the Public Utility Commission, preparing cost-of-service rate studies, calculating tapping fees and other services related to developers, and assisting with bond and note financings for capital projects. The firm also does valuation studies in connection with the sale or acquisition of municipal and private systems.
A committee comprised of representatives of the member municipalities and the Oxford Area Sewer Authority is still working on developing a long-range strategy to provide wastewater treatment services to the Oxford area. One possibility that is being explored is the sale of the state-of-the-art sewage treatment plant to a company like Aqua Pennsylvania Wastewater that is in the business of running wastewater treatment plants.
Ron Kepler, a supervisor from Lower Oxford Township who also serves on the Oxford Area Sewer Authority Board, said that the member municipalities have all entered into an inter-municipal agreement to analyze all the options for how to proceed.
“We're all going to work together to come up with the best possible solution for everyone,” Kepler said.