By Jim T. Ryan
Staff Writer
Penn Twp. Municipal Authority is talking with Suez Water about a deal for the troubled Sunshine Hill water system, authority members said last week.
"They're not only interested in our water, but maybe in operating our sewer, too," authority member Elmer Knaub said at a May 3 meeting.
Knaub said he and authority member Jim Kocher met with Suez representatives recently to discuss the township's water systems. In a second meeting, he said, company representatives came to review Sunshine Hill's water system. There was later discussion about the authority's sewage treatment plant in Cove, as well.
Suez will likely seek more information about the water system from the authority and township in coming months to help in its assessment.
Bob Manbeck, a spokesman for Suez, confirmed that the company met with authority members, but did not have more information about those discussions.
"We're always making ourselves available to talk with municipal officials about buying or operating their water systems," Manbeck said.
Suez provides water to Business Campus One, the business park in the township with Mutzabaugh's Market as an anchor. The company also serves water customers in Marysville and Rye Twp.
"They seem to be interested and I think we should at least hear them out," Knaub said.
Sunshine Hill is a residential neighborhood in Penn Twp., west of Lincoln Street in Duncannon. Its water system dates back nearly 70 years when the neighborhood was first built.
Authority Chairman Henry Holman III has described the system in the past as being on the verge of failure, and everyone agrees it needs serious upgrades to make sure residents have reliable and clean water.
In 2015, the authority took bids on upgrades and repairs to the system, including storage tanks, mains and treatment facility.
The low bids for construction and electrical work totalled $1.6 million, about half a million more than anticipated, according to authority meeting minutes from 2015.
The project never went forward because block grant funding of $900,000 fell through when Pfautz Apartments backed out. That changed the project area's income levels, making it ineligible for the grants targeted at low-income communities.
If Suez acquired the system, or even agreed to operate and help repair it, it's possible they could do the work for less, authority members said. The 2015 bid prices were higher than market rates because of prevailing wage laws.
The authority's engineer, Randy Bailey, said they have to do something soon about Sunshine Hill. Suez's help could move the project along.
"It looks promising at this point," Bailey said.
Suez's help would also prevent the authority from having to go further into debt to finance the project.
That was a concern for Brian Peters, township supervisors' chairman, who was at the authority meeting.
"We're looking at several more millions in repairs," Peters said.
He was referencing both the Sunshine Hill project and the township's expected contribution to repairs on Duncannon's sewage treatment facility.
Repairs to Duncannon's sewer plant could cost nearly $3 million. Township businesses and residents in the immediate area of Duncannon are connected to the sewer plant.
Peters wanted to know what the overall financial health of the authority was and whether it would be able to meet obligations to creditors, such as Pennvest, the state-backed infrastructure bank.
Peters said his concern is that the township has backed the authority on the loans. If those obligations can't be met, the township would be on the hook. That could also make it difficult for the authority to finance other projects, he said.
The authority has debt service payments of more than $300,000 this year for loans of $4.8 million.
Rate increases approved in December cover debt service payments and the rest of this year's budget, the authority said in January.
Delinquent water and sewer accounts contribute to that problem, but the authority is receiving more payments on those.
The total dollar figure for delinquent accounts grew from about $110,000 in January to $115,000 in February, according to the authority.
Since then the delinquent total dropped to $102,000 in March, and as of May 4, delinquent totals were $85,897.
The authority has some challenges, but members are confident they can work through them.
"We've never missed a payment, or gone negative on anything," Kocher said.
Jim T. Ryan can be reached via e-mail at jtryan@perrycountytimes.com