Sewer Authority director offers update to Oxford Borough Council about loan responsibility
By Steven Hoffman
Oxford Area Sewer Authority director David Busch had some good news and some bad news to deliver to Borough Council on Monday night.
The good news,” said Busch, “is the Sewer Authority signed an agreement to sell a 33-acre parcel on Reedville Road and we also have a lot of interest on our property at 14 S. 3rd St. where the Authority is currently located.”
However, the bad news is that that the Borough of Oxford, East Nottingham, West Nottingham and Lower Oxford Townships were recently told they are left owing $1.2 million that resulted from two missed payments on a USDA loan that the Sewer Authority took out.
According to a Guarantee Agreement signed by the four municipalities, the municipalities will need to pay a proportionate payment in April of this year. Since the majority of rate payers are in the borough, the borough will be paying the largest portion of that amount—44 percent.
Busch said, “The problem is that all four municipalities have to agree on how this money is paid.” He explained that there are a number of options such as a re-amortization of the past due amount, but there would be costs with that scenario, and it would raise payments.
Busch explained, “We could borrow but when you are in default, which we are, we would be borrowing at higher rates.”
“On top of that, we also need a new guarantee agreement between the municipalities and the Sewer Authority,” Busch said.
The other option is each municipality could give the Authority a check for the proportionate amount they owe. Busch said three of the municipalities have agreed to do that. But with the Borough paying 44 percent, that is a big number to come out of their budget.
When the Reedville Road property sells, that money will go toward the USDA loan. Busch, who came in to the authority after the loan default, has been the director for three years.
“We have made many changes. Growth continues to increase and will continue when we add a line through East Nottingham on to West Nottingham Township.”
When asked by borough council member Ron Hershey if this could happen again, Busch said, “There is no guarantee what works today will work tomorrow. We need to replace sewer lines. We are fixing sections at a time, but we need to do more. We need to replace whole lines.”
Busch said, “We are trying to do this in a reasonable manner. No one is getting a free ride. Developments grow slowly here. We are selling about 35 EDUs a year. We are looking at grants, and saving anywhere we can, but we would have to talk to our solicitor if no decision can be made.”
Borough Manager Brian Hoover said, “Hopefully, the property sales will reduce the check that has to be written. We have to protect the Borough. This is not a taxpayer issue.”
Council said the discussion was better suited for executive session.