City: Four will share cost of upgrade
The City of Warren is responsible for the lion’s share of the money for its $26.5 million sewer treatment plant upgrade.
But it won’t be saddled with the entire financial burden.
A PENNVEST grant will pay $4.5 million.
The four municipalities that use the system – the city and Conewango, Glade, and Pleasant townships – will pay back varying portions of a $21.5 million PENNVEST loan. The interest rate on that loan is 1 percent and the term is 30 years. The local match for the project is $550,000. The municipalities will produce their portions of that amount from their own coffers.
The grant is a reimbursement and the city will pay those dollars toward the project up front, according to City Manager Nancy Freenock.
The city hopes the project will be complete in two years.
The upgrade to the treatment plant itself will cost about $19.5 million. Two new pumping stations will cost another $2.5 million, and two new force mains will add another $761,000. Contingency and support costs add another $3.77 million.
The city sent letters to the townships in March breaking down each municipality’s financial responsibility. Each will pay a portion of the loan and the local match.
Conewango Township’s share is $552,277, Glade Township’s is $940,919 and Pleasant Township is on for $1,018,853. The city will take on the rest – about $19.5 million.
According to the letters, the city is asking for quarterly payments of $5,328 from Conewango, $9,078 from Glade, and $9,831 from Pleasant until their portions of the loan are paid off.
The reserved capacity for Pleasant will increase by about 40 percent and for Glade about 33 percent, according to city Public Works Department Director Mike Holtz. There is no proposed increased in the capacity reserved for Conewango.
“Please note that the reserved capacities for Pleasant and Glade township have been increased since current reserved capacities were previously exceeded,” the letter read. The townships may opt to modify their reservations. In all, the townships will reserve about 12.7 percent of the 6.5 million gallon per day “peak month” flow through the treatment plant if there are no changes to the new levels.
The city has contracts with Conewango Township (1994), Glade Township (1995), and Pleasant Township (1996) regarding the existing sewer system and how its capacity and costs are to be shared.
“The city has a share,” Holtz said. “Each of the three townships has a share.”
Language in the old contracts provides for the city and townships to share any upgrades.
“If deemed necessary by the city, or, when any governmental body having jurisdiction orders the city to provide new treatment units for upgrading at the treatment plant, then the city shall perform said upgrading,” according to the contracts. “Each parties’ portion of the upgrade improvements costs shall be determined by the portion of capacity each party agrees to own in the upgraded treatment plant, in proportion to the total design capacity of the upgraded treatment plant.”
Asked what happens if one of the municipalities refuses to pay toward the upgrade, Freenock consulted the contracts. There is language, she said, that allows for “appropriate remedy in the Court of Common Pleas” in the event of default.
That is something city officials hope to avoid.
“We don’t want to wind up in court with any of our neighbors,” Freenock said. “This contract was negotiated in good faith. The leaders at the time acted in the best interests of the municipalities. Now both sides have to live up to the terms and conditions of the agreement.”
According to Holtz, the city has repeatedly raised the rates it charges sewer customers over the past six years in order to build up reserves to pay for design costs and avoid a large increase when payment for the upgrade begins.