Residents urge board to pull out of Towamencin sewer sale

Towamencin resident Kofi Osei speaks to the township’s supervisors about the pending sewer sale on Wednesday, June 14 2023. (Screenshot of meeting video)

TOWAMENCIN — With a new set of laws in Towamencin just weeks away from taking effect, residents are warning the township’s supervisors — act now, while you still can, to back out of the township’s long-discussed sewer sale.

“If you send a letter, they could back out. But if you don’t vote to terminate, we’re gonna get sued, as a township. So please, take the chance,” said resident Kofi Osei.

Residents and the supervisors have sparred for more than two years now about the pending sale of the township’s sewer system, which the supervisors voted to approve in May 2022 after several months of resident opposition due to concerns about steep rate hikes under a private owner.

Since the initial vote to sell the system to Florida-based NextEra for roughly $115 million, residents opposing the sale won a victory at the ballot box in November 2022 to set up a township government study commission, that commission met starting in December 2022 to draft a new home rule charter with referendum provisions that the study commissioners argue could stop the sale, and in May residents voted to adopt that new charter effective July 1.

During the supervisors’ meeting on June 14,  sale opponents continued to urge the board to terminate the sale agreement, which the supervisors voted in March 2023 to shift to local firm PA American Water at a roughly $104 million purchase price after initial buyer NextEra announced plans to pull out.

Osei, who chaired the now-dissolved study commission, started his public comments by noting that each of the five supervisors could make a motion to direct staff to authorize a resolution terminating the sale.

He then complimented Supervisor Rich Marino, whom he’s challenging for a seat on the board of supervisors in November’s election, for his “approach to being supervisor ” and responses to resident concerns, and compared that role to that of a sports team coach, with a league like the Towamencin Youth Association.

“After every TYA game I played, win or lose, we stood in a line, shook the opposing team’s hands, and said ‘Good game.’ You came to a GSC meeting, defended the GSC’s decision-making as being transparent, and then defended the sewer sale, thus participating in the contest in earnest,” he said.

Sending a letter to PA American that the township intends to withdraw from the asset purchase agreement based on the charter could end the debate at little cost, Osei added, without the legal expenses that a court battle could cost taxpayers.

“I’m asking, now that the voters of Towamencin have made their opinion clear, please concede by terminating the APA. We’re playing again in November; I’d rather not have another sewer sale election,” Osei said.

Residents cite charter vote

Public comments submitted via email to the board largely opposed the sale, with residents largely calling for the supervisors to follow the results of the charter vote in May and use language in the asset purchase agreement to terminate the deal at no fault to either side.

David McCreary asked if the board will “concede and obey the law as of July 1st, or do you intend to cut off your nose to spite your face? Do the right thing, and don’t spite the residents by forcing a lawsuit.”

Rebecca Curlett told the board “No one but you thinks this is a good idea. We the people have spoken, and it is time to move on. We do not want to sell our sewer. $100 million for the township, and all the things it could buy, sounds good — but remember, that money is not free. We, the ratepayers, will be paying back the money for eternity.”

Mary Jean Moroz said she’s “not asking for much, just that you simply honor your oath to uphold the constitution of Pennsylvania. Please listen to the wishes of your constituents, and make your decisions based upon the votes of the residents.”

Nancy Blackburn asked “Why do you want to ruin this township? Let the people have peace of mind. It is difficult enough to decide if you want to eat or buy your medicines. If the sale goes through, senior citizens will be moving out. They will not be able to afford the sewer rates. Stop and think about what you are doing. I love Towamencin with my whole heart. Do not break it.”

Judy and Andrew Phipps said a group of residents felt the board had been “persistently reluctant to face your residents with any semblance of honesty,” and aimed to “call you out for your failure to live up to the oaths of office each of you took upon your installation as supervisors.” While the board may have operated within the law, “you owe us an explanation for your failure to conduct this sale in a fair and impartial manner,” Phipps said, adding that residents of all parties have voted to say “we do not want our assets sold for your profit.”

Rate hike coming either way

Other comments asked how the proposed 2024 sewer increase mentioned by the supervisors in May compared to the much steeper raises proposed by new buyer PA American, and how the township’s residents would benefit from losing control of the plant.

Brian Gaynor said the charter “is a fact of life now. Despite this, a majority of the board continues to make legally dubious assertations that the sale simply cannot be stopped at this point, or this township will be subject to legal action.” Gaynor said he felt that claim is baseless, and “effectively, the adoption of the home rule charter gives the board an easy out in this matter,” and urged the board to “tell your supporters you had no choice because you don’t.”

In-person comments then continued, with Paul Andrews referencing Lansdale’s recent talks on a possible sewer rate hike there, and their discussion of incremental rate hikes totaling roughly 43 percent over the next 15 years, compared to the projected rates from Towamencin’s buyer.

“I’d sure like to pay $726 instead of the $2,100 I’m going to be paying if this sale goes through by that time,” he said. Andrews then noted several bills in the works at the state legislature that would modify Act 12 of 2016 which allowed private utilities to bid on and buy such utilities and pointed out how Bucks County recently backed out of a similar sale attempt with over $1 billion at stake.

“If all these municipalities and politicians can figure out that privatization is a (expletive) deal for residents, why haven’t you guys?” he said.

Geraldine Dilisi said she and her husband are 50-year residents, and in 2022 became involved in opposing the sale by attending the meetings, voting for the study commission, circulating petitions for the home rule vote, and campaigning for each. During the three votes in March to transfer the sale agreement from one buyer to the other, “With each ‘aye’ vote, my heart dropped. This was supposed to be democracy in action?” she said.

“Four of our five supervisors are digging their heels in, and still not listening to the residents of Towamencin Township. Hopefully, in the end, democracy will prevail,” she said.

Lessons from similar sale

Study commissioners Tina Gallagher and Gisela Koch and resident Lisa Patriarca pooled their comment time to read a letter from Amanda Johnson, a resident of Exeter Township, Berks County, urging the board to back out of the sale, based on their experiences in that municipality after a similar sale.

“At the time, it seemed like a good idea. However, what the former board of supervisors did not anticipate was American Water pricing residents out of their homes, as a result of vast rate increases over the last four years,” Gallagher said.

January 2023 brought resident complaints about high utility bills after a rate hike in 2022, Gallagher read in the letter to the board, and residents in Exeter are now paying “an exorbitantly high rate for wastewater, and it is only going to get worse.”

“This is not a mystery anymore. We know what this will do. This is harmful to people. That has always been the bottom line to me. Senior citizens, and people that are just making it out there, are going to be harmed,” she said.

Koch finished the letter, saying the majority of Exeter residents now buy water instead of using their public utility because the promised infrastructure upgrades never materialized.

“We are currently looking into ways to buy back the property, or outsource our wastewater, to alleviate the impact of the continually increasing wastewater bills. It is anticipated that there will be another request for a rate increase in the spring of 2024, causing more issues among the residents,” she said.

Study commissioner Martin Cohen said that based on the township’s numbers, he’s calculated the township would earn roughly $2.6 million on interest earnings from the sale proceeds, but residents would pay more than $10 million in increased rates at the same time.

“It’s pretty brutal, actually. It almost sounds like a payday loan. I’m just asking you to think about this again, one last time,” he said.

Mark Wohlpart said he’s been following the sale discussions from afar, and saw one positive: “The good part is that they’re a corporation, they don’t have feelings. Their shareholders might be a little disappointed that this little township, they don’t get to soak their profits out of, but on the whole, I don’t think they’ll cry any tears. If you want someone who didn’t uphold their contract, just look at NextEra.”

Resident Joe Silverman said he heard the board make two arguments in favor of the sale, to keep up with stricter state environmental regulations and to use the sale proceeds. The first could be covered by loans while maintaining control, he said, while the second could also, all while keeping the asset.

“All you have to do is take out a loan, pay it off, and you’re done. The bottom line is: why sell it? Would I sell my house ’cause my roof’s leaking, and then have to rent or buy it back?” he said.

Vanessa Gaynor said she had recently rewatched the public town hall meeting from April 2022 prior to the initial sale agreement and asked the board if their statements at the time still held, after a new buyer and two public votes opposing it.

“Since the town hall, a lot has changed. Now we’re receiving less money for the sale, now our buyer is different and steadily acquiring other water and wastewater systems across the state, which drive sewer rates even higher. Now residents have the full set of facts about what this will mean for their pocketbooks,” she said.

And Lorena Fields said she is “not sure how four of you sleep at night because I know I don’t,” due to concern about the pending rate hikes.

“Now you’re in a real pickle, that you created by simply not taking the time to do a little more research. Even if you truly believe that this was in the best interests of us, you should’ve at least given us the courtesy of listening to our concerns, and addressing them, before signing another contract,” she said.

After the close of the public comments, Wilson questioned the resident calculations about debt payments, noting that debt service is also paid by general fund revenue and traffic impact fee revenue as well as by dedicated millage from taxes. He then said PA American has been out to meet with several condo associations that are not currently metered, where residents have warned that rates could be hiked even higher than residential rates, and township Manager David Kraynik said more visits could follow once the firm gets an initial report on those calculations.

“Some of the feedback from Towamencin Condominiums was that they were actually glad to see the possibility of putting in separate meters because they can use those for their water billing as well, rather than be billed in bulk. So they saw a silver lining to that,” he said.

Towamencin’s supervisors next meet at 7 p.m. on June 28 at the township administration building, 1090 Troxel Road. For more information visit www.Towamencin.org.