RAVEN RUN — The Municipal Authority of the Borough of Shenandoah board replied Friday to a number of questions about the authority’s fiscal status and equipment from one of its major water customers.
Thomas F. Twardzik, president of Ateeco Inc., Shenandoah, maker of Mrs. T’s Pierogies, used the public part of the board’s meeting to ask questions and comment mainly on the progress of the authority in moving forward since a meeting last May with representatives from the state Department of Community and Economic Development and the Pennsylvania Economy League who spoke with the MABS board and management about the Early Intervention Program study.
At the time, the water authority had been added to the EIP study that began with the Borough of Shenandoah. The results of that study have been released, focusing mainly on the borough, but Phase II will begin in the near future and will focus on MABS.
During his questioning, Twardzik said what the authority does and does not do in all aspects of its operations can have a major impact on his business, which is a major reason why he is looking for answers.
“My business depends on a long-term, reliable and sustained water supply,” Twardzik told the board. “When I read this (EIP report), my concerns are that something is going to fail and shut me down. Another is that I wake one day and the place (water system) is sold to a water authority or utility that is not the best for its customers. So, without transparency, I get very concerned as to what is going to happen to a critical resource for my business. It affects everything I do and every decision I make.”
Twardzik referred to a MABS special meeting last year that included a presentation to explain the completed EIP Phase I study and the information gathered about the authority.
“I was here back in May 2015 when Marita Kelley was here from DCED and there were some things that were discussed,” Twardzik said. “One of them was the repayment of the PennVEST loan. At the time there were delays that were granted. Have any payments been made on the loan?”
Board President Donna Gawrylik replied that the no payments have been made, explaining that the waiving of the payments extends to June of this year. Gawrylik said the payments will resume at that time.
Twardzik’s second question was the status of when a backup water pump will be purchased. The authority has been operating with only its main pump. Gawrylik said the backup pump would be discussed later in the meeting and to get prices so a purchase can be planned.
“Ms. Kelley at the time noted the precarious financial situation of the authority. Do you have three-year projections since you passed the 12 percent rate increase?” Twardzik asked. The 2016 MABS budget was adopted in December with the rate increase.
“We did work through that and Mary Lou (Jaskierski, authority manager) can get it to you,” Gawrylik said.
Twardzik had a copy of the EIP study of Shenandoah that included some information on the authority, including several options for the authority to deal with the financial problems. One option was to transfer the MABS system to another authority or utility, and it mentioned that MABS officials had contacted several other water systems.
“In that May meeting, you said that you had spoken to other authorities and companies about any interest. Have you solicited or obtained formal statements of qualifications for the potential of a transfer of ownership?” Twardzik asked Gawrylik.
Gawrylik replied that there is nothing at this time as the preparation for the EIP Phase II study will begin this year. She added that when the authority was dealing with frozen pipes in early 2015, it had contacted companies and authorities for assistance. During those contacts, the subject of a transfer or purchase of the MABS system was briefly discussed at the time, but no responses had been received.
Board Secretary/Treasurer Donald E. Segal added that the Phase II study will gather detailed information about the authority’s operations and assets that could be evaluated by any interested parties.
“They (those who will conduct the study) will investigate everything within the authority, what the assets are and come up with the monetization of what it’s all about with the water company,” Segal said.
Alfred Benesch & Co. project manager M. Christopher McCoach spoke to clarify the situation.
“I think there was some confusion between that Phase I and Phase II,” McCoach said. “Phase I was more geared toward the borough, and then the authority was kind of tacked on at the end. That report that was sent out said it should be looked into about possibly selling it or turning it over to another utility. This Phase II is specific to the authority, and that’s when they will look into it (the sale/transfer option), and if that happens, they (PEL) will actually put the RFP (request for proposal) together. So to answer your question more directly, the answer is no if there have been any RFPs received.”
Board member Joseph Rosselli said the authority board and staff are working to find answers to the authority’s situation.
“We’re also looking and exploring other financial options,” Rosselli said. “We’re putting things out there to see where we stand from our standpoint of how we can operate or become solvent. We’re not just sitting back. We’re working different things.”
“We’re just not letting things go,” Segal said.
Twardzik asked what else the authority has done to improve the financial situation beyond the rate increase.
“We’ve gone to a collection agency and our bills are being paid,” Segal said. “In fact, one of our major bills with a construction company has been paid. It was in excess of $140,000. That’s just one bill.”
MABS solicitor Joseph Nahas told Twardzik the board is working with PENNVEST on the loan and the possibility of restructuring it. The move to retain the services of Portnoff Law Associates LTD. to collect on delinquent accounts is showing results and consideration of ways to have emergency funding available.
“It’s not just that we raised the rate,” Nahas said. “We’re also looking at the authority’s assets. There are a lot of assets and maybe there are some properties that we don’t need and they need to look at that for either selling or leasing. What all the members here want to do is try to keep the authority and make it solvent and get it back to where it should be. The board is moving in every direction possible to be productive.”
“We are property rich and financially poor, but we’re trying to correct that,” Rosselli said. “I feel that we have an obligation, morally and ethically, to the borough of trying to get out from underneath the rock, but it will be the professionals who will tell us how to proceed.”
“It’s like starting a new business, Tom,” Segal said. “We’re at the ground floor right now.”
Plant operator Daniel Salvadore said two of the major challenges that must be met is the purchase of the backup pump and finding ways to reduce water leaking from the system.
“Number one is the pump,” Salvadore said. DEP (Department of Environmental Protection) just wants that pump. It’s mandated. Number two, I believe, is the biggest problem this authority has. That’s water allocation. We’re way over. Our water leakage causes us to pump more, and electricity is incredibly high. I have to run our big pump more, our Heights pump more, our Turkey Run pump more. My filters take a beating, and I use more chemicals. Just the wear and tear on the filter media. Instead of running one million gallons, I’m running 1.8 million gallons. We should be pumping four hours in the Heights. Sometimes we’re pumping seven hours.”