Thank you abc27 News for the coverage on the sale of York City’s wastewater treatment plant and a look at what could happen to rates for our residents.

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We, the members of the York Area Regional Sewer Authority, are disheartened by the actions taken Wednesday, March 24 by the York City Sewer Authority Board. In a 3-1 vote, the Board approved the $235 million asset purchase agreement of the city’s wastewater treatment and collection system with Pennsylvania American Water (Roderick Artis, Michael Connor and H. Michael Buckingham voted in favor while Philip Briddell voted against). The next step is for the York City Council to approve this purchase which will happen at their next meeting on April 7. 

Should this vote be approved (which is the likely outcome), this means only the York City residents will benefit from a three-year moratorium on rate hikes, and that the municipalities that provide over 50 percent of the flow to the system are not protected from rate increases. Based on historical data of other systems PA American Water has purchased, PA American’s goal is to move ratepayers to their zone 1 rates as quickly as possible which are 2-3 times more than the rates currently paid.  

The Regional Authority’s next steps are to protest this sale at the Pennsylvania Utility Commission (PUC). But we need your help. Please sign our petition as well as contact local legislators to share your feelings about this sale. Also, if you want to stay informed of the steps we are taking, please sign up for our newsletter for additional updates.   

Your voice matters and we strongly encourage you to get involved. But in the meantime, please be assured, the local municipalities who are impacted by this sale are doing everything in our power to protect ratepayers and the increases that will occur as a result of this sale. 

Sincerely, 

Members of the York Area Regional Sewer Authority representing: 

  • Manchester Township 
  • North York Borough 
  • Spring Garden Township 
  • West Manchester Township 
  • York Township
news and updates background

The following statement was made on March 24, 2021 at the York City Sewer Authority meeting by Tim James, chairman of the York Area Regional Authority.

Based on your prior meetings, we believe that the York City Sewer Authority plans to approve the sale of the York City Sewer Authority’s sewage collection system, interceptors and wastewater treatment plant to PA American Water in the amount of $235 million dollars at tonight’s meeting. Our review suggests that the valuations do not support this record-breaking purchase price. The impact of this deal, if approved by the PUC, will result in significantly increased user rates for everyone for years to come.   

During the Sewer Authority’s last public meeting, you stated your only role is to determine whether there would be sufficient capacity if this sale were to go through. Thus, you don’t believe it is your role to consider the dramatic impact on rates, and you are telling all of the system’s customers, including the connected municipalities whose residents contribute over 50 percent of the flow to the system, that you could approve this sale knowing that future rates could easily be double or even triple today’s rates.  

We strongly disagree with your thought process. The York Area Regional Sewer Authority, representing all of the impacted municipalities, urges you to find a solution that is in the best interest of all of the citizens in your service territory. As public servants, you are obligated to look beyond the capacity of the system when you vote tonight. You own the system, not the City, the Mayor or City Council. If you don’t have the right to find a better alternative that lessens the negative financial impact to the residents of our community, then we don’t know who does. You, more than any organization, will also shoulder the responsibility for the rate increases that PA American Water will impose if you approve this deal.  

Over the past several months, the York Regional Sewer Authority has developed a competitive alternative that would keep the entire system under local control, provide the City with the funds needed to satisfy its obligations and have less of an impact on rates versus what we will be seeing over the next few years and well into the future should PA American Water purchase our system. One only needs to look at PA American’s Zone 1 rates and compare them to existing system rates to understand that rates will go up dramatically after the 3-year gimmick is over for York City residents. The Sewer Authority should demand from PA American before they approve the sale answers to these questions– “What will the average City sewer customer pay after the rate freeze is over? And what is the projected rate 5 years out and 10 years out?” 

It is inconceivable that your deliberations wouldn’t consider the severe financial impact on rate payers, among whom are thousands of our neighbors who have struggled through to make ends meet during the pandemic. If you approve the sale this evening, knowing that there is a responsible, fiscally sound alternative, you set the stage for rates that will be double or triple today’s rates. There’s simply no hiding from that inconvenient truth.  

We may not be able to influence the outcome or stop your vote tonight, but we will be doing everything we can to protect our ratepayers by protesting this sale before the Public Utilities Commission.  We respectfully request that you delay this vote by one month to hear what we are willing to offer. Should this request be denied, please know that the York Area Regional Sewer Authority remains ready, willing and able to purchase the system in the event that the aggressive timelines PA American Water, Mayor Helfrich and City Council are promising that this deal will be completed within are not met (as we expect will happen). We can provide a better alternative with local control, and lower rates for all residents, not only for the short term but for the future because it’s the responsible thing to do for our community and those impacted by this sale. 

Thank you for your time and consideration.  

news and updates background

Why the Sale of the York City’s Treatment Plant Will Impact You

Recently, there has been much discussion in the press about the sale of the City of York’s wastewater treatment plant, which comes up for a vote for approval in the next few weeks. While this may appear as a City issue, this sale will impact our residents and our sewer bills. Therefore, we felt it was important to share critical information including background on the sale, what we are doing to protect our residents as well as how you can help.

Background on the York Area Regional Authority and the Request for Proposal (RFP)/Sale Process

The York Area Regional Sewer Authority was formed in response to information that the City was considering selling the wastewater treatment plant. The Regional Authority is comprised of five municipalities that utilize the City system and whose residents would be impacted by the sale. The member municipalities include: West Manchester Township, Spring Garden Township, Manchester Township, York Township, and the North York Borough.

On July 10, 2020, the City of York solicited bids from investor-owned utilities to purchase the York City Sewer Authority’s sewage collection system, interceptors, and wastewater treatment plant. The City has awarded the sale to PA American Water for $235 million. If approved by the York City Sewer Authority, this investor-owned utility will own and operate the City’s collection system as well as the treatment plant, and bill residents and business owners for sewer service.

Based on the parameters of the RFP, the Regional Authority did not meet the requirements to submit a response as bid documents only allowed for the purchase of all assets (the collections system and treatment plant together). When the City was asked to consider an alternative bid structure that would allow for bidders to separate the assets, this request was denied (as were multiple requests to meet), so the Regional Authority could present an alternative approach that would maintain local ownership of the treatment plant.

With over 50 percent of the flow coming from the Regional Authority’s municipalities, maintaining local authority control of the City of York’s wastewater treatment plant is critical to keeping rates low for the residents and the companies who operate within our townships.

How this Impacts You

To provide an investor-owned public utility the anticipated return on its $235 million investment, rates must increase to pay for this purchase and provide a return to its shareholders. The current proposal by PA American Water is to freeze rates for three years for City residents only. All customers outside of the city (including residents/businesses in the municipalities and boroughs of the Regional Authority) are not included in this rate freeze. Furthermore, as a state-wide public utility, PA American Water would be allowed to raise rates throughout its entire service area to pay for future purchases and upgrades in other parts of the state.

The current rate agreements with York City Sewer Authority are not transferable to PA American Water; therefore, customers in the Regional Authority’s municipalities are subject to tremendous uncertainty. Will you be subject to immediate rate increases and not be protected until new agreements are finalized? Neither the City nor the York City Sewer Authority has explained how they intend to address these existing sewer agreements with the municipalities and boroughs of the Regional Authority (despite the fact we will apparently be asked to pay for half of the bill for the $235 million purchase price, we have been left in the dark).

The Regional Authority is ready and willing to purchase the treatment plant for a fair market value that will benefit the City, City residents, and the communities we serve. A purchase by the Regional Authority will provide more rate certainty, local ownership and accountability which results in a heightened sensitivity to utility rates and annual increases. The people impacted by this purchase live in our communities, which is why the Regional Authority is also looking into customer assistance programs that could help our neighbors in their time of need. An authority is accountable to its customers, not its investors.

The Regional Authority’s Next Steps

The members of the Regional Authority are passionate individuals with over 200 years of combined experience who have deep roots in our community and care about the constituents they serve. In response to this sale, we have compiled a team with decades of financial, engineering, and legal talent. Unfortunately, we have been left out, left in the dark and thus left with no choice but to protest this sale to protect the communities we serve.

In addition to the PUC protest, the Regional Authority is considering all options when it comes to next steps, including moving flow to other systems and other opportunities that may be available. All the Regional Authority has wanted from the beginning was a fair outcome for the City, city residents, and the communities we serve.

How You Can Help

Time is running out to ask the questions that could stop this transaction from happening. The City is moving very quickly to approve this deal, so fast in fact that the York City Sewer Authority who owns the treatment plant (and also was not involved in the sale process or decision making of the RFP) has asked for a delay in the approval process to ensure they have the time to review all aspects to make a responsible decision.

Questions that need to be answered include:

  • What is the projected rate increase given the $235 million purchase price? Over next 3 years? In 5 years? In 10 years?
  • Why was the local option (whether the Regional Authority or York Water Company) overlooked? Was the City looking for the highest price or best option for the City, its residents and the municipalities that provide over 50 percent of the flow?
  • Did the City define the “best option” to be the highest sale price versus a balance between providing financial security to the City and ensuring long term rate stability among all sewer users?

To keep rates low, we need your help. Please visit our website at YorkRegionalSewer.com and help protect yourself and your neighbors by taking one (or all) of the following actions:

Thank you for your consideration.

news and updates background

While the sale of the York City Wastewater System to Pennsylvania American Water Co. sounds good – no tax increases, financial stability – there is more to the story that people need to know. This sale is NOT in the best interest for the City or the member municipalities of the York Area Regional Sewer Authority who are contributing over 50 percent of the system flow.    

It’s unfortunate the City continually chooses to communicate with the Authority through op-ed pieces such as the Mayor’s January 28, 2021 submission, where he referred to the Authority’s purchase price as “bargain-basement” (interesting because he never talked with us to discover what we would actually pay). In any event, we are forced to communicate publicly and respond to this op-ed because the public needs to hear what transpired during the RFP process and could occur as a result of this sale. 

IMPACT FROM THE SALE

About “Fact No. 3” – For “direct-service customers” (City residents), yes, sewer rates will be held for three years. However, this will not hold true for neighboring municipalities’ residents and businesses. Rates could increase significantly and continue to rise year over year. After the three-year rate freeze is over, City residents will also feel the impact as evidenced by what is happening in other areas of the state where systems were purchased by PA American Water.   This is not an attack on PA American Water (or regulated utilities) – they seem to be a responsible public utility. This is a critique on the City’s flawed process that produced a “Cadillac price” that will ultimately fall on the ratepayers in this region.

About “Fact No. 4” – The pending sale to PA American Water is NOT a better deal for York customers long-term. The Mayor stated the per-customer rates would be less because PA American Water can spread the costs over their entire customer base statewide (this is far from assured and obtaining that result requires PUC approval). But what happens when PA American Water continues to purchase treatment plants across the state, who pays then? The City’s residents and businesses along with the Authority member municipalities because they can spread these purchases outside of our region onto us.  

ABOUT THE RFP PROCESS

The Mayor stated in this same op-ed that the Authority did not “produce any real proposal and chose not to participate in the public bidding process, despite receiving advance notice.” The RFP process was designed to discourage, if not ensure, the Authority could not participate. The Authority requested the option to purchase the wastewater treatment plant only (as opposed to both the plant and collection system together which was the parameters of the RFP) BEFORE the RFP deadline. This request was denied which is why the Authority did not submit a proposal. It is also important to note, after the initial RFP deadline of August 6 had passed, the  window to resubmit was reopened and ended on October 12. During this time, the Authority was never notified about submitting a bid. 

The fact is, the City has not been open to a meeting with the Authority and contrary to what has been conveyed, any request the Authority made during the RFP process was not illegal. For some reason, the City did not want the Authority to participate and did everything they could to keep us out of it. Instead of communicating as the partners we thought we were, we are communicating via op-eds, which makes you question the entire process the City has undertaken. Broadcasting your position to thousands is apparently legal, but having a discussion with your largest customers is illegal? This doesn’t add up.  

The idea that an investor-owned utility can purchase an asset for $235 million dollars (when only $197 million was needed) and the customer base will feel minimal impact, is just not true. An appropriate price results in appropriate rates and rate increases. All the Authority has wanted from the beginning was a fair outcome for the City, its residents and our community. Unfortunately, we are left with no choice but to protest this sale to protect the communities we serve.

For more information, visit YorkRegionalSewer.com.

Kelly Kelch

Chief Information Officer, York Area Regional Sewer Authority

717-792-3505

news and updates background

On January 20, 2021, the York City Council approved a resolution to move forward with negotiations on the purchase of the York City Wastewater Treatment Plant by PA American Water for $235 million. Council President Nixon also indicated he was disappointed in the Authority for not participating in the RFP process; however, the RFP was intentionally structured to prohibit bids for individual components of the system. When we asked to consider an alternative bid scenario so we could participate, the request was denied.

The York Area Regional Sewer Authority has been steadfast on its goal of ensuring an outcome to the sale of the wastewater treatment system that was in the best interest of the City, its residents, and our community. While we are very disappointed that we were not given consideration or even a meeting to discuss our alternative local option, we have every intention of pursuing a solution that is in the best interest of all constituents. Therefore:

  1. We will formally protest this transaction with the PUC as there are not sufficient public benefits.
  2. Each member municipality will be re-examining their existing agreements with York City Sewer Authority to confirm whether there are additional legal grounds to pursue.
  3. We will be examining all alternative options that may be available.

Again, we are disheartened it has come to this; however, the Mayor and City Council gave us no choice when they refused to meet with us and took an isolationist approach to the sale (so much so that they also kept the owner of the treatment plant – the York City Sewer Authority – out of the process and review).

As connected municipalities who contribute over 50 percent of the flow to the treatment plant, we at least deserved to have our voices heard.

Timothy R. James
Chairman, York Area Regional Sewer Authority
717-764-4646

news and updates background

The York Area Regional Sewer Authority has been steadfast on its goal of ensuring an outcome to the sale of the wastewater treatment system that was in the best interest of the City and its residents. Therefore, please consider the following three key points:

The City “needs” $197 million for long-term financial security, but the remaining $30-35 million surplus will need to be paid for somehow, by someone.

While the City feels good about these additional surplus funds, transferring additional fee increases to City residents to pay for this “good feeling” is not the best long-term financial interest and well-being for residents and businesses. The ideal outcome would make the City financially stable while respecting the impact this has on its residents.

If the PA American Water sale goes through, rates will significantly increase once the rate freeze is over.
We expect future rate increases requested by PA American Water to unfairly burden City residents as shown in these Pennsylvania newspaper articles:

There is a LOCAL option that will provide the “needed” financial security to the City AND be sensitive to future rate increases for residents.
We strongly believe a local authority and/or utility is the best option for our community. The Authority has underwriting available to purchase the wastewater treatment plant now and provide the money within the next few months without the yearlong regulatory process required by the PUC that will also cost the City additional money.

For more information, please visit yorkregionalsewer.com.

Timothy James

Chairman, York Area Regional Sewer Authority

news and updates background

Since the beginning, the York Area Regional Sewer Authority has been steadfast on its goal of ensuring an outcome for the sale of the City’s wastewater treatment system that was in the best interest of both the City and its residents.   

While the purchase price seems exceedingly attractive, please remember it is the users of the system (especially the City’s residents) who will be paying for the purchase price on top of PA America Water’s rate of return. During the December 22 City Council meeting, Mayor Helfrich mentioned the City “needed” $197 million from the sale and anything above that was a bonus. It is important to remember that this “bonus” is not truly a bonus as it is an expense that will be borne by the residents and businesses of the City. The ideal outcome would make the City financially stable while respecting the impact this has on its residents.

We are saddened that a decision is being forced without having heard the better local alternative, which is a win-win for everyone. The RFP process was designed to discourage, if not ensure, the Authority could not participate. The fact is, that to date, neither the Mayor nor City Council have been open to a meeting with the Authority. In addition, when we contacted Council President Nixon to let us speak during public comment about the budget agenda item at the December 15 City Council meeting, we were informed that any comment about the potential sale of the sewer system would be muted. Fundamentally, that is a violation of the Pennsylvania Sunshine Law and the Pennsylvania Constitution. This continual denial of any third party option is an issue we intend to raise with the Pennsylvania Public Utility Commission.

We strongly believe the Authority is the most virtuous and largest saving opportunity short- and long-term for the City and the wastewater treatment system’s customers and residents of our community. Therefore, prior to making any final decision, we respectfully request a meeting with the Mayor and City Council to discuss the Authority’s alternative option that would offer a similar sales price for the treatment plant. We can get to a budget position that can restore and keep jobs as well as help with the City’s financial obligations as quick if not quicker than PA American Water.

As noted in the past, we expect future rate increases requested by PA American Water to unfairly burden City residents and homeowners. There is a local option, be it with YARSA and/or a local utility, that needs to be considered. Any refusal to even consider such an option is a dereliction of the Mayor and City Council’s duty to the City of York. 

A purchase by the Authority offers the shortest path to getting cash in the bank and meeting the City’s financial obligations. While we understand an upfront payment of $15 million is part of the agreement, these funds will not be deposited until 60 days after the agreement has been signed. Whereas the Authority has underwriting available to provide all of the money within potentially a similar timeframe without the yearlong regulatory process required by the PUC that will also cost the City additional money. In addition, protests at the PUC that are sure to occur as a result of the sale to PA American Water would be avoided that could make closing the deal in a timely manner even more difficult.

It is not only the Mayor’s and members of City Council’s fiduciary responsibility to meet with any organization that can provide an option that is in the public’s best interest, but it is also the best outcome available that will benefit city residents, businesses, and the community at large the most.

Again, all we are asking is for a few minutes of time to share our plan for purchase and how it could benefit the economic health and well-being of York City. Despite comments that appeared in the newspaper, this request is not illegal and it is in everyone’s best interest. Furthermore, a continual refusal to even discuss this issue with the municipalities that use 50 percent of the wastewater treatment plant will not be received favorably by the PUC.

For more information, visit YorkRegionalSewer.com.

Kelly Kelch

Chief Information Officer, York Area Regional Sewer Authority

717-792-3505

news and updates background

The City of York administration is poised to recommend to City Council and the York City Sewer Authority that they approve the sale of its sewer system. This is in response to four bids that were received on December 9, 2020. Prior to submission of these bids, the York Area Regional Sewer Authority, an authority created by five local municipalities that currently rely upon the City’s wastewater treatment plant for treatment of its sewage, requested the opportunity to speak with the City about an alternate sale concept. That concept would allow the City to maintain ownership of its collection system and sell the treatment plant to a locally controlled public authority. The Authority believes this alternative to be a win-win for all parties.

The Mayor has stated that the City has been advised (we assume by counsel representing the City as part of the RFP) that it would be illegal to even talk with the Authority about such a sale. That is absolutely false. First, the RFP allows the City to reject any and all bids. They have no contractual relationship with any of the bidders. Second, as a publicly created authority, the City is authorized to sell its assets to any public entity without going through a bid process. Therefore, the sale to the Authority is an alternative option worth legally pursuing. 

The RFP originally provided for bids to be submitted for all of the sewer system or just the collection system or wastewater treatment plant. The most recent RFP only provided for sale of the collection system and treatment plant. The Authority requested that the RFP be amended to allow alternate bids as originally proposed. This is an option that is clearly in the best financial interest of the City that costs nothing to pursue. The Authority was informed by counsel that alternate bids would not be permitted as part of the bid process. That response immediately eliminated the Authority from any participation in the sale process. 

Why is the City refusing to meet with the Authority or permit alternate bids when it appears to be in the best interest of the residents of the City of York to at least consider this opportunity?  Repeatedly it returns to who is advising the City on this transaction.  With the sale of an asset of this magnitude, full disclosure is paramount.  Counsel hired by the City will receive a substantial commission from this sale.  Be it $10,000 or $2,000,000 (we believe it to be closer to the latter), the residents of the City deserve to know how much it is and how it impacted this transaction. Why Won’t the City Meet with The Authority? The residents of the City need and deserve to know. 

For more information about the York Area Regional Sewer Authority, visit YorkRegionalSewer.com.

Timothy R. James

Chairman, York Area Regional Sewer Authority

717-764-4646

Read it in the York Dispatch

news and updates background

In response to the 12/9/20 article “City officials respond to Regional Sewer Authority’s claim for side bid on York sewage plant,” it is important for the York Area Regional Sewer Authority to clarify the following points:

  • While there may be legal reasons why the City cannot allow the Authority to enter the current RFP process, they are NOT obligated to move forward after the bids are in. Therefore, a meeting with the Authority to understand an alternative path for consideration is all that is being asked and is not an illegal request, especially if that alternative path better serves our citizens.
  • The Authority requested the option to purchase the wastewater treatment plant only (as opposed to both the plant and collection system together) BEFORE the RFP deadline. This request was denied which is why the Authority did not submit a proposal and the option to partner with another organization was not conveyed.
  • Per the September 21 York Dispatch article “Five Municipalities say ‘yes’ to regional sewer authority, want deal with York City,” Mayor Helfrich mentioned he was open to hearing from the Authority. It is important to note, this date was after the initial RFP deadline of August 6 had passed. While the window to resubmit was reopened and ended on October 12, during this time, the Authority was never approached about submitting a bid. All other bidders received an invitation to bid and RFPs were sent to them. York Area Regional Sewer Authority and/or none of the connected municipalities did not receive such an invitation. Had the Authority known the window was to be reopened, the Authority would have notified the City that it was unable to comply and request the ability to offer an alternative bid for the treatment plant only at that time.
  • An investor-owned purchase will not provide the City with the funds to pay their current 2021 financial obligations, whereas a purchase by the Authority of the wastewater treatment plant can provide these necessary funds potentially within 60-90 days.

If the City is interested in doing what is best for its residents and neighboring municipalities, selling the wastewater treatment plant to the York Area Regional Sewer Authority is in the best interest of the community to maintain local control and keep rates low. All the Authority is requesting is a meeting once the bids have been reviewed to help the City understand an alternative path.

For more information, visit YorkRegionalSewer.com.

Kelly Kelch
Chief Information Officer, York Area Regional Sewer Authority
717-792-3505