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The Mount Penn Borough Municipal Authority supplies water to about 3,700 customers in Mount Penn and St. Lawrence, and Lower Alsace and Exeter townships. (Courtesy of Mount Penn Borough Municipal Authority)<\/p>\nThe Mount Penn Borough Municipal Authority has agreed to reopen negotiations with the borough over a proposal that would transfer ownership of the authority\u2019s water system to the borough and lease it back to the authority.<\/p>\n
Officials say they hope the move will avoid costly consequences tied to a loan through Pennsylvania Infrastructure Investment Authority, or PENNVEST.<\/p>\n
The authority also voted at its meeting last week to authorize its solicitor to send a letter to PENNVEST, indicating that it will continue discussions with the borough regarding the proposed conveyance of assets and lease-back arrangement.<\/p>\n
The action came after Mount Penn Mayor Ryan Maurer urged the board to resume negotiations and asked council to delay implementation of an ordinance adopted in April that would dissolve the authority.<\/p>\n
The Mount Penn Borough Municipal Authority supplies water to about 3,700 customers in Mount Penn and St. Lawrence, and Lower Alsace and Exeter townships. (Courtesy of Mount Penn Borough Municipal Authority)<\/p>\n
Maurer said PENNVEST recently warned that if the borough proceeds with dissolving the authority and assuming its assets without an agreement, the authority\u2019s low-interest loan for the new water storage tank could be called due immediately.<\/p>\n
The tank on Spook Lane is under construction and will replace an older tank nearby.<\/p>\n
Borough manager Hunter Ahrens said the authority borrowed about $2.83 million through PENNVEST for the $3.7 million tank project. A $750,000 state grant will cover the remaining costs.<\/p>\n
Ahrens said PENNVEST told the borough that it would not transfer the loan to the borough if the matter was not resolved amicably.<\/p>\n
\u201cEssentially, what that means is we\u2019d have to pay off the loans right away and get new loans,\u201d he said.<\/p>\n
Under one scenario outlined by borough officials, replacing the PENNVEST financing with new borrowing at current market rates could cost ratepayers about $900,000 more in interest over 25 years.<\/p>\n
\u201cWe don\u2019t want to see ratepayers have to shoulder that cost,\u201d Ahrens said after the meeting. \u201cWe\u2019re trying to figure out a way to move forward through that.\u201d<\/p>\n
Maurer stressed the borough\u2019s preference for a cooperative solution, saying borough council wants to continue working with the authority rather than proceeding with dissolution.<\/p>\n
\u201cCouncil is committed to this path,\u201d the mayor said, \u201cand would like the authority as partners.\u201d<\/p>\n
The authority unanimously agreed to continue negotiations and appointed Chairman Joseph Boyle and board member Kevin Blackburn to represent the authority in the talks.<\/p>\n
Ahrens said Mount Penn is pursuing three primary goals: creating a unified public works department by integrating authority employees into borough operations; establishing protections against a future sale of the water system to a private company; and creating a lease-revenue stream to help stabilize the borough\u2019s finances.<\/p>\n
Boyle said the authority remains willing to negotiate but wants assurances that the interests of water customers throughout the service area are protected.<\/p>\n
The authority supplies water to about 3,700 customers, Boyle said, noting about 67% of the authority\u2019s customer base lives outside Mount Penn, about 40% in Lower Alsace Township, 19% in St. Lawrence and 8% in Exeter Township.<\/p>\n
The renewed negotiations also come as St. Lawrence pursues legal action challenging the proposed conveyance, arguing that authority assets must continue to be used solely for water-system purposes.<\/p>\n
St. Lawrence solicitor Joan London has said the proposal could undermine a 1968 agreement under which St. Lawrence transferred its water system assets to the authority with the understanding the authority would operate the system for the benefit of its residents.<\/p>\n
Boyle also expressed concerns that a lease-back arrangement could divert money needed for future water service infrastructure projects and regulatory requirements.<\/p>\n
The authority has built financial reserves to address major projects, he said, 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
Under the framework outlined last week, representatives of the borough and authority are expected to negotiate lease terms over the next several weeks.<\/p>\n
Maurer said council would suspend further action on dissolving the authority while those discussions continue.<\/p>\n
Both sides hope to have a draft agreement completed by late July.<\/p>\n","protected":false},"excerpt":{"rendered":"The Mount Penn Borough Municipal Authority has agreed to reopen negotiations with the borough over a proposal that…\n","protected":false},"author":2,"featured_media":219675,"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-219674","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\/219674","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=219674"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/posts\/219674\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media\/219675"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/media?parent=219674"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/categories?post=219674"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us-pa\/wp-json\/wp\/v2\/tags?post=219674"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}