The Reading Area Water Authority is in a strong financial position as it prepares for costly regulatory mandates and major infrastructure projects, its executive director said.
William Murray, who has been at the helm of the authority for 10 years, said the authority has kept rate increases to a minimum while investing heavily in the water system and reducing its debt.
“The financial position is extremely strong,” Murray said during a recent City Council meeting. “Without getting into the specific numbers, we are very, very strong.”
Murray said the authority has raised water rates only twice during his tenure, by 3% in 2024 and 2% last year, for a combined increase of $3.83 per month per customer.
During the same period, he said, the authority completed more than $50 million in capital improvements and reduced its debt to about $50 million from more than $90 million.
The authority operates Reading’s water system, which relies primarily on Lake Ontelaunee, an approximately 1,082-acre reservoir about eight miles north of the city.
Water is treated at the Maidencreek Filter Plant, which has a capacity of 40 million gallons per day, according to the authority.
It also owns and operates a separate groundwater-based system in North Heidelberg Township and supplies major customers outside the city, including a natural-gas power plant in Birdsboro. Murray said connecting the plant to the authority system required more than $10 million in pipeline and system improvements.
The authority’s biggest financial challenges come from state and federal regulatory requirements, he said, particularly regarding heavy metals.
Murray said the authority initially faced the prospect of spending about $65 million to replace lead and galvanized service lines. After working with federal and state regulators to identify service-line materials and plan replacements, he said he now expects the cost to be closer to $5 million over 10 years.
“It just happens to be that Reading is a city that did not use lead,” he said. “It just didn’t.”
Another mandate involves treatment for PFAS and PFOA, commonly called “forever chemicals.”
Murray estimated the authority will need $5 million to $6 million in filtration plant upgrades over roughly three years to meet the requirements. The authority has received more than $3 million through litigation against companies associated with the chemicals, he noted.
Other major expenses lie ahead, Murray said.
Improvements to the more than century-old dam at Lake Ontelaunee could cost about $20 million, he said.
The authority also expects substantial costs associated with the planned reconstruction of the Route 422 bypass because major water lines crossing three bridges over the Schuylkill River will be affected by the project.
The authority also expects to refinance about $50 million in remaining debt in roughly 2½ years. Murray said refinancing could reduce annual debt payments to roughly $3 million to $4 million from about $7 million to $7.5 million, depending on how the debt is structured.
Murray said another rate increase of 2% or 3% is possible this year, primarily because of rising operating expenses, including employee health care costs.
Despite the challenges, Murray credited the staff and its relationship with city officials for the authority’s progress during his tenure. Nine of the 10 managers who were there when he arrived remain with the authority, he said.
“It starts with the employees, the management team,” he said.