{"id":146234,"date":"2026-03-23T19:47:08","date_gmt":"2026-03-23T19:47:08","guid":{"rendered":"https:\/\/www.newsbeep.com\/us-pa\/146234\/"},"modified":"2026-03-23T19:47:08","modified_gmt":"2026-03-23T19:47:08","slug":"mount-penn-lease-back-proposal-for-water-authority-raises-concerns-over-rates-legality","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/us-pa\/146234\/","title":{"rendered":"Mount Penn lease-back proposal for water authority raises concerns over rates, legality"},"content":{"rendered":"

Mount Penn officials are considering a proposal that would take ownership of the Mount Penn Borough Municipal Authority\u2019s water system and lease it back to the authority.<\/p>\n

Supporters say the move could stabilize borough finances, but critics fear it would divert money away from water quality and infrastructure improvements.<\/p>\n

The concept, known as a conveyance lease-back, would transfer ownership of the authority\u2019s assets to the borough while allowing the authority to continue governing the system.<\/p>\n

Authority staff would become borough staff under the proposal.<\/p>\n

The authority supplies water to roughly 30,000 households in Mount Penn and St. Lawrence boroughs and parts of Lower Alsace and Exeter townships.<\/p>\n

\"TheThe pump house is part of the Mount Penn Borough Municipal Authority’s water system. (Courtesy of Mount Penn Borough Municipal Authority)<\/p>\n

At a recent authority meeting, Mount Penn Borough Manager Hunter Ahrens said the proposal is intended to address long-term financial pressures on the borough while preserving public ownership of the water system.<\/p>\n

\u201cWe\u2019re trying to strike a balance,\u201d Ahrens said Thursday at the authority\u2019s monthly meeting. \u201cIt\u2019s a clear opportunity to relieve long-term financial pressures from the borough through lease-back revenue, not to aid a struggling borough, but to support regional flourishing of a shared community.\u201d<\/p>\n

\"HunterHunter Ahrens, Mount Penn Borough Manager
\nBILL UHRICH\/READING EAGLE<\/p>\n

Ahrens said the borough faces rising costs for services such as police, fire and emergency medical response and has one of the highest local tax rates in Berks County.<\/p>\n

The lease-back proposal, he said, would generate an annual payment from the authority while also encouraging closer coordination between borough staff and the authority.<\/p>\n

Private companies such as Pennsylvania American Water have shown interest in acquiring the system, he said, and a lease-back arrangement could introduce new protections against a future sale.<\/p>\n

Authority leaders raised numerous concerns during the meeting.<\/p>\n

Joseph Boyle, chairman, said the proposal could redirect funds currently reserved for infrastructure and regulatory requirements.<\/p>\n

\u201cIt seems like this is a cash grab,\u201d he said in an interview after the meeting. \u201cMount Penn borough has financial issues, and I get it.\u201d<\/p>\n

\"JosephJoseph Boyle, chairman of the board of the Mount Penn Borough Municipal Authority.
\nSTEVEN HENSHAW\/READING EAGLE<\/p>\n

Boyle said the authority has built financial reserves to address major projects, including federal requirements expected to take effect in coming years to remove certain contaminants from drinking water.<\/p>\n

Those upgrades alone could cost $3 million to $6 million, he said.<\/p>\n

His biggest concern, Boyle said, is that revenues currently set aside for infrastructure could be diverted if the borough controls the assets.<\/p>\n

Water rates will go up, he said, if those funds are used by the borough for other purposes and the authority later needs money for system improvements.<\/p>\n

Authority officials also questioned how governance would work if the borough owns the system but the authority still operates it.<\/p>\n

Ahrens said the authority would remain intact and continue governing the system, with the borough and authority budgets kept legally separate.<\/p>\n

The proposal has also drawn pushback from the nearby borough of St. Lawrence, whose residents make up a share of the system\u2019s customers.<\/p>\n

St. Lawrence solicitor Joan London said the borough believes the plan may violate the state Municipal Authorities Act.<\/p>\n

\u201cMunicipal authority funds cannot be used for any purpose other than a service or project relating to the authority\u2019s mission,\u201d she said in an interview after the meeting.<\/p>\n

London said diverting authority revenues to Mount Penn\u2019s general fund would conflict with that requirement.<\/p>\n

In a letter to Mount Penn\u2019s solicitor, London argued on behalf of St. Lawrence, saying the proposal could undermine a 1968 agreement under which St. Lawrence transferred its water system assets to the authority with the understanding that the authority would operate the system for the benefit of its residents.<\/p>\n

Boyle noted that about 67% of the authority\u2019s customer base lives outside Mount Penn, about 40% in Lower Alsace, 19% in St. Lawrence and 8% in Exeter.<\/p>\n

Under the conveyance plan, those customers living outside Mount Penn could end up helping fund borough expenses, he said.<\/p>\n

Authority officials said customers will receive a notice on upcoming water bills informing them that rates could increase if the proposal moves forward.<\/p>\n

Mount Penn officials say the proposal is still in the due-diligence stage, with financial and operational records under review.<\/p>\n

The borough has not yet finalized a valuation of the authority or the structure of potential lease payments.<\/p>\n

Both the borough council and authority board, which includes two council members, are expected to continue discussions in the coming months as the proposal evolves.<\/p>\n","protected":false},"excerpt":{"rendered":"Mount Penn officials are considering a proposal that would take ownership of the Mount Penn Borough Municipal Authority\u2019s…\n","protected":false},"author":2,"featured_media":146235,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[349,1411,182,8512,29643,139,28,128,130,129,22305,706],"class_list":["post-146234","post","type-post","status-publish","format-standard","has-post-thumbnail","category-reading","tag-berks-county","tag-exeter-township","tag-local-news","tag-lower-alsace-township","tag-mt-penn","tag-news","tag-pennsylvania","tag-reading-city","tag-reading-city-headlines","tag-reading-city-news","tag-st-lawrence","tag-top-stories-reg"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/146234","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/comments?post=146234"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/146234\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/146235"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=146234"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=146234"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=146234"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}