OP-ED: If something sounds too good to be true, it probably is
While the sale of the York City Wastewater System to Pennsylvania American Water Co. sounds good — no tax increases, financial stability — there is more to the story that people need to know. This sale is not in the best interest of the city or the member municipalities of the York Area Regional Sewer Authority who are contributing over 50 percent of the system flow.
It’s unfortunate the city continually chooses to communicate with the authority through op-ed pieces such as the mayor’s Jan. 28 submission, where he referred to the authority’s purchase price as “bargain-basement” (interesting because he never talked with us to discover what we would actually pay). In any event, we are forced to communicate publicly and respond to this op-ed because the public needs to hear what transpired during the RFP process and could occur as a result of this sale.
Impact from the sale:
About “Fact No. 3” — For “direct-service customers” (city residents), yes, sewer rates will be held for three years. However, this will not hold true for neighboring municipalities’ residents and businesses.
Rates could increase significantly and continue to rise year over year. After the three-year rate freeze is over, city residents will also feel the impact as evidenced by what is happening in other areas of the state where systems were purchased by Pennsylvania American Water.
This is not an attack on Pennsylvania American Water (or regulated utilities) — they seem to be a responsible public utility. This is a critique on the
city’s flawed process that produced a “Cadillac price” that will ultimately fall on the ratepayers in this region.
About “Fact No. 4” — The pending sale to Pennsylvania American Water is not a better deal for York customers long term. The mayor stated the per-customer rates would be less because Pennsylvania American Water can spread the costs over their entire customer base statewide (this is far from assured and obtaining that result requires PUC approval).
But what happens when Pennsylvania American Water continues to purchase
treatment plants across the state? Who pays then? The city’s residents and businesses along with the authority member municipalities because they can spread these purchases outside of our region onto us.
About the RFP process: The mayor stated in this same op-ed that the authority did not “produce any real proposal and chose not to participate in the public bidding process, despite receiving advance notice.”
The RFP process was designed to discourage, if not ensure, the authority could not participate.
The authority requested the option to purchase the wastewater treatment plant only (as opposed to both the plant and collection system together, which was the parameters of the RFP) before the RFP deadline. This request was denied, which is why the authority did not submit a proposal.
It is also important to note, after the initial RFP deadline of Aug. 6 had passed, the window to resubmit was reopened and ended on Oct. 12. During this time, the authority was never notified about submitting a bid.
The fact is, the city has not been open to a meeting with the authority and contrary to what has been conveyed, any request the authority made during the RFP process was not illegal. For some reason, the city did not want the authority to participate and did everything they could to keep us out of it.
Instead of communicating as the partners we thought we were, we are communicating via op-eds, which makes you question the entire process the city has undertaken.
Broadcasting your position to thousands is apparently legal, but having a discussion with your largest customers is illegal? This doesn’t add up.
The idea that an investor-owned utility can purchase an asset for $235 million dollars (when only $197 million was needed) and the customer base will feel minimal impact, is just not true. An appropriate price results in appropriate rates and rate increases. All the authority has wanted from the beginning was a fair outcome for the city, its residents and our community.
Unfortunately, we are left with no choice but to protest this sale to protect the communities we serve.
For more information, visit YorkRegionalSewer.com.
— Kelly Kelch is the West Manchester Township manager and chief information officer for the York Area Regional Sewer Authority.