Bucks County Water and Sewer Authority (BCWSA) recently announced that it is considering an offer from Aqua to purchase its sewer (but not water) assets for $1.1 billion dollars (read “Bucks County Moves Ahead on $1.1 Billion Offer to Sell Sewer System to Aqua Pa.”).
BCWSA and Aqua are now hosting a series of private and public meetings to answer questions from municipalities and the general public. As a “municipal partner” local elected officials – including Newtown Township supervisors – were invited to a special meeting on July 25, 2022, at the Bucks County Community College (BCCT).
The following 12-minute audio clip from that meeting, which ran on for more than 2 hours, focuses on concerns relevant to Newtown Township. Speakers include John Cordisco, BCWSA Board Chair and Benjamin Jones, BCWSA CEO.
Dubious “Rate Stabilization” Plan
The clip begins with John Cordisco, BCWSA Board Chair, giving an overview of the purchase agreement under consideration. He specifically discussed some details of a “rate stabilization plan” (aka “Customer Benefit Fund”) designed to shield customers from anticipated increased rates should the deal go through. “We will NOT move forward,” said Cordisco, “unless there is at least a 10-year rate stabilization.”
According to a July 27, 2022, Philadelphia Inquirer article, however, “The nature and mechanics of such a fund have not been spelled out, and are not part of Aqua’s proposed sale agreement.”
This was the first time I heard about this plan and asked Mr. Cordisco specifically how it would work. I was concerned that the money from the sale to fund this would be managed by the Bucks County Commissioners – elected officials who can change over a 10-year period. Unless there were specific restrictions on the fund, how can it be guaranteed that the Commissioners will continue to use the money to offset rate increases? There was mention of a Trust Fund, but very little details were available.
Barry F. Luber, the township manager of Warrington, said at a July 26, 2022, public forum, “You can’t obligate a future elected official, so there’s no guarantee that rate stabilization would happen.”
Aqua distributed the following chart showing how what it calls the “Customer Benefit Fund” will offset projected monthly rate increases over a period of 10 years.
As reported in the article cited above, “The Bucks County authority argues that its own projected rates would increase at a faster rate than Aqua’s in the next decade because it faces about $250 million in upgrades and repairs. The responsibility for those repairs, and compliance with a 2021 court settlement involving with environmental regulators, would shift to a buyer.”
How is Newtown Township Impacted?
Newtown Supervisor Dennis Fisher had a question regarding customer service, which he felt was excellent under the Newtown Bucks County Joint Municipal Authority (NBCJMA) but might not be so good if a “conglomerate” took over. Mr. Benjamin Jones, BCWSA CEO, informed him that Newtown Twp is a “wholesale customer,” and its sewer facilities will not be sold as part of the plan. Newtown residents will continue to be serviced by NBCJMA. Mr. Jones also provided more details about how the sale might affect NBCJMA expenses and hence payer rates.
Meanwhile, for residents that may be directly affected by the sale, there will be future public meetings where they can voice their concerns. There were, however, at least two consumer organizations (e.g., Food & Water Watch and StopTheSewerSale.com) outside the BCCT meeting room handing out materials such as the chart below.
Posted on 26 Jul 2022, 10:32 - Category: Environment