Bucks County questions proposed $1B sale of sewer system to private Aqua; towns line up in opposition

The Bucks County commissioners want to know more about the proposed $1.1 billion sale of the Bucks County Water and Sewer Authority’s sewer system to the private company Aqua Pennsylvania.

They have lots of questions, and they want answers by Aug. 29.

While the commissioners wait for a response, several municipalities in Bucks and Montgomery counties have already made up their minds that the deal is not a good one for ratepayers and they’ve passed resolutions putting their opposition in writing. Now some are joining a consortium to fight the proposal legally, if need be.

And the director of the North Penn Water Authority in Lansdale, which sells millions of gallons of treated drinking water to the BCWSA each year through the Forest Park treatment plant it runs with North Wales Water Authority, say that if Aqua ever wants to buy the BCWSA water operation, the jointure won’t provide the water.

"We are very much against privatization of water and sewer systems," North Penn Executive Director Tony Bellitto said in a phone interview. "We will do everything in our power to block that deal.

"For a variety of reasons, it's not in the best interest of the residents … We have an agreement to sell water to the Bucks County Water and Sewer Authority," he said, but "we have no obligation to sell any water to them if they sell their system to a private company. If Aqua thinks they're going to come in and buy the water side, my question is, 'Where are you going to get the water because we're not going to sell it to you?'...We want to kill the deal," he said.  

And he pointed out that while Bucks County leased the water rights to Lake Galena in New Britain Township to the BCWSA last year, a 30-year court ordered agreement has the North Penn-North Wales jointure controlling the pump that draws the water into Lake Galena from the Delaware River.  

"They think they have use of Lake Galena. We have control of Lake Galena. And this is a challenge," he said.

More:Bucks County OKs $24.7M deal to lease Lake Galena to water authority. Here's what you need to know

Bellitto promoted an online meeting Thursday evening of the group Neighbors Opposing Privitization Efforts (NOPE)  which is opposed to the sewer system sale. He also has spoken against proposed state legislation that might give private companies easier access to purchase public utilities. 

All this has happened as the BCWSA prepares for its next board meeting Aug. 24, where the proposed sale most likely will come up for discussion.

In July, the BCWSA gave Aqua Pennsylvania, a subsidiary of Essential Utilities based in Bryn Mawr, the exclusive right to purchase the sewer system if they can complete the deal within a year.  But about 150 people attended two hearings and a board meeting later that month to learn about the proposal and many protested it on the grounds that Aqua has raised the rates of customers in several other locales where it purchased the sewer or water systems.

John Cordisco, chair of the BCWSA Board of Directors, and Ben Jones, the authority’s executive director and CEO, have said that Bucks County would receive most of the proceeds of the sale, estimated to be close to $1 billion after the authority’s debts are paid, but ratepayers are concerned that they will be footing the bill for this benefit to Bucks. 

The county commissioners sent Jones a letter on Monday questioning the sale and how it would proceed. 

“The county has an obvious interest, on many levels, in having a thorough understanding of the ongoing negotiations between the Bucks County Water & Sewer Authority and Essential Utilities/Aqua Pennsylvania regarding the potential sale of the authority’s sewer operations,” the commissioners’ letter states.

The commissioners attached a list of approximately 50 questions that they, county staff members and residents would like answered by Aug. 29.

On Wednesday, several municipal officials and members of municipal associations attended the commissioners' meeting to voice their concerns in person.

Doylestown Township Supervisor Barbara Lyons said her township approved two resolutions this week, one to oppose the sale and another to form and lead a consortium of municipalities that will fight the sale.

That resolution states the consortium will "retain such experts, consultants and legal counsel as approved by a majority of the members of the consortium to prepare such analyses, studies, court actions and other documents, as deemed needed to oppose the sale."

The BCWSA is an independent nonprofit that was set up by the county in 1962. Its sewer system is valued at $1.1 billion, the price that Aqua has offered to pay for it ― the largest offer for a sewer system in the country, the commissioners' letter pointed out.

But many residents who are ratepayers are against the sale to a private company like Aqua, citing higher rates that Aqua has charged ratepayers in other communities where it has purchased water or sewer facilities and its need to make a profit and pay dividends to its stockholders who have contributed some of the funds needed to purchase the sewer system.

Several municipalities oppose BCWSA sale

On Monday, Middletown became among the latest municipalities to oppose the proposed sale.

The township Board of Supervisors unanimously approved a resolution that it said implored the county commissioners "to take all reasonable and necessary steps to compel BCWSA to abandon its negotiations and to continue operating as an independent, nonprofit agency as intended when it was created in 1962 by the Bucks County Commissioners."

Middletown had sold its own water and sewer systems to the BCWSA in the early 2000s and is now one of the 31 municipalities serviced by the authority.

Other municipalities opposed to the sewer system sale include Doylestown, Langhorne and Penndel boroughs, Bedminster, Doylestown, Lower Southampton, Newtown, Plumstead and Richland townships in Bucks and Springfield Township in Montgomery County.

More:Bucks County Water and Sewer Authority is worth $1 billion. Is it for sale?

Bucks Commissioners question rates over multiple years

In their letter, the county commissioners questioned how much debt the authority has. They also questioned whether the authority is bound to give the leftover funds to the county, or would that be up to the discretion of the BCWSA Board of Directors.

The commissioners also wanted to know what the BCWSA rates have been for the past five year and how much rates would rise in 5 and 10 year increments if the system stayed with the BCWSA and if it is sold to Aqua.

And they questioned how the authority would continue its water operations, that are valued at approximately $300 million, going forward once its larger sewer system would be sold. "Will water rates need to increase to allow the authority to function successfully?"

More:Opposition to Bucks County sewer system sale grows; municipal officials call it 'unconscionable'

They also wanted to know about the BCWSA's maintenance needs, estimated at $245 million, not including repairs needed to sewer laterals to private homes.

The leaking laterals and the need to replace the authority's 80-year-old sewer mains have led the federal Department of Environmental Protection and the state Department of Environmental Protection to levy a $450,000 fine against the authority. The environmental agencies also could impose more fines if the authority doesn't continue to fix leaky sewer pipes that have contaminated water supplies and streams, according to the conditions of a Consent Decree the BCWSA signed with the environmental agencies last year.

The commissioners also asked about how the deal would affect bulk service clients of the authority, such as the Township of Falls Authority. And what would happen if some of the municipalities that recently sold their sewer authorities to the BCWSA were to want those operations returned to the municipality.

Warrington Township is considering that possibility.

Commissioner Chairman Bob Harvie told the audience at the meeting Wednesday, "when the answers come in, we'll make them public."

Brian Dries, a spokesman for the BCWSA, stated in an email Wednesday that "BCWSA will provide the Commissioners with answers to their questions by the requested Aug. 29 deadline."

Told about the opposition to the sale from the municipalities and the North Penn Water Authority, Essential Utilities spokeswoman Donna Alston said that the proposed sale involves the wastewater system only, not the BCWSA water business, and that Aqua would "continue to work with BCWSA to educate retail and wholesale customers on the many benefits of the transaction.  

"Essential will work diligently with the BCWSA representatives to provide answers to the commissioners’ questions related to the sale. We are confident that combining the strengths of Aqua and BCWSA will result in impactful proceeds for Bucks County and continued employment for current BCWSA employees while maintaining the same level of high-quality service for BCWSA customers. We understand that the county commissioners and the BCWSA board are interested in conserving long-term rate protection and we are ready to engage with them as it’s always been our goal to ensure affordable rates for our customers," she said in an email response.