Oxford Borough Council receives update about efforts to sell public sewer system
03/21/2017 12:40PM ● Published by Steven Hoffman
Joel Brown, a member of the study committee that is exploring options for the public sewer system that is currently operated by the Oxford Area Sewer Authority, provided a brief update about the committee's progress to Oxford Borough Council at the meeting on Monday night.
One option that the committee has been exploring is the possible sale of the entire sewer system. The wastewater treatment plant was extensively upgraded to meet the long-term needs of the area. Brown said that five entities have expressed some level of interest in acquiring the sewer system.
The Oxford Area Sewer Authority is owned by its four member municipalities—Oxford Borough, East Nottingham Township, West Nottingham Township, and Lower Oxford Township.
The sewer authority is facing significant financial issues after falling behind on the debt-service payments on a $27 million loan from the U.S. Department of Agriculture. That funding was used to increase the capacity and modernize the wastewater treatment plant.
The sewer authority blamed its revenue shortfalls on the fact that purchases of Equivalent Dwelling Units (EDUs) that were submitted by the municipalities when the sewer authority updated its Act 537 Plan six years ago. The sewer authority board voted last July to raise rates by 30 percent. But even with the sizable increase, the sewer authority is still facing significant revenue shortfalls that could continue into the future.
In order for the sewer authority 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. With the municipalities facing the real possibility of having to spend hundreds of thousands of dollars annually to keep the sewer authority current with its debt-service payments, a committee was formed to explore the possibility of selling the entire sewer system.
The study committee has compiled a list of items that they would like a potential buyer to consider as part of the sale. Brown explained that the price that a potential buyer would pay for the sewer system is important, obviously, but it is not the only consideration. Brown said that it's essential that they get enough funding to pay off the outstanding portion of the loan. Beyond that, they also want any potential new owner to be able to make the necessary investments in the system.
Brown said that some of the considerations that have been discussed include the installation of public sewer lines along Baltimore Pike, which would allow for more users to connect to the system and boost revenues.
The member municipalities would maintain control over all zoning and land-use decisions. The purchasing company must also adhere to all the provisions of the Act 537 Plan.
The Study Committee would like to get an assurance from the purchasing company that the existing rates won't increase for rate users for a minimum of three years, and that there would be no more than a five-percent increase during the first ten years.
The study committee would like the purchasing company to continue to employ those employees who operate the wastewater treatment plant for as long as possible.
Specific terms of an agreement between the four member municipalities and the company purchasing the sewer system would need to be worked out once a potential buyer has been selected from among those entities that have expressed interest.
In other business at the March 20 council meeting, Mayor Geoff Henry issued a proclamation recognizing April as “Pennsylvania 811 Digging Month.” Pennsylvania has established a telephone number—811--that can be called before any digging is done to ensure that no underground utilities will be damaged as a result of the digging. Residents, developers, contractors, or anyone else who may be moving earth are encouraged to dial 811 at least three days before the project is set to start. The proclamation is reminder of the 811 service's benefits.