Kittanning Municipal Authority Still Surprised by Borough Decision

by Jonathan Weaver

When Kittanning Borough Council voted two weeks ago to explore taking over local municipal authority operations, it left all authority officials “flat-footed.”

Co-Chair Mike Swartz has even sought more information from Borough Council President Randy Cloak, but to no avail.

“Why he wants to take that authority back over is totally beyond our wildest thoughts – they cannot transfer the PennVEST loans to the borough. The borough would actually have to go out and refinance a loan and pay off the loans, which would incur more cost for our taxpayers,” Swartz said.

“It caught us all flat-footed. We feel that the authority’s done a good job.”

The authority is even working to upgrade their computer system to allow for more efficient billing and business operations. Once in place, customers will be able to pay bills via credit card payments or online.

“We’re trying to keep everything progressing, to keep some sense of normalcy down at the office,” Swartz said.

Cloak called for the special meeting February 9, and made the motion to “explore and begin the process of the Borough incorporating the operations of the sewage operating facility under the guise of the Borough.”

The motion was passed 5-2.

After the special meeting a few weeks ago, Cloak called the decision ‘preliminary’ to the overall goal.

“There are a number of reasons – at this point, we directed our solicitor to look at what the options are and exactly what the process would entail,” Cloak said. “The reason for the meeting (February 9) was not to dissolve the Authority, (but) to discuss the future of the Authority and what the will of Council was.”

Cloak said an ‘ongoing’ issue with the operating agreement between the sewage authority and Kittanning Borough was the reason for his motion.
“There was an operating agreement that was signed when they were created that explains how the two entities would function together – that’s the issue. There’s this agreement that really creates a situation that is very difficult, if not impossible for another organization to function efficiently,” Cloak said.

Calls for updates from Cloak were not returned.

First Ward Council members Betsy Wilt and David Croyle were the only two members to oppose the motion.

Croyle and other members of Borough Council did not comment on the personnel issue, only stating that the Authority and the Borough currently share the same office space.

Kittanning Borough Council decided in 2000 to form the municipal authority specifically to renovate the existing sanitary sewer plant and sewage collection system – which at the time collected both sewage and stormwater.

The Municipal Authority financed the reconstruction of the sanitary sewer system by securing four loans totaling more than $11.6 million at a mere one percent interest – the lowest rate charged in the state. An additional $7.2 million in grants was secured.

“The Borough can not borrow through PennVEST – they would have to go to a bank and borrow at a higher interest rate,” Swartz said.

As of the most recent audit, the Authority’s debt service to PennVEST is $8.3 million – less than 50 percent of the overall $18.9 million cost of construction of the plant and sewage collection system.

According to municipal leaders, the Authority also installed sewer laterals for all Kittanning Borough customers at no expense to the customer, provided $445,000 to pave Borough streets curb-to-curb in the project areas at no cost to the municipality and consistently operated the sewage treatment plant and collection system as per National Pollutant Discharge Elimination System (NPDES) permit requirements.

Swartz, who joined the authority in 2004 when his father-in-law – former Mayor and Councilman Wilbur “Bib” Bowers – got sick, said the authority pays about $400,000 of debt per year.

Sewage Authority Chairman Peter Graff IV could not attend the special meeting, but sent a letter to council members. The letter read, in part: “The Board has worked tirelessly to maintain high standards concerning every aspect of the Authority… The sudden and unexpected reversal of support which the Board had from Council regarding upgrading office procedures with computerization is indeed strange… The Board’s aim has always been solely in the best interests of the rate payers/customers.”

Authority Solicitor Robert Zunich of Pittsburgh and Borough Solicitor Ty Heller are currently discussing the matter.

 

Kittanning Borough Votes to Eliminate Sewage Authority

by Jonathan Weaver

The Borough of Kittanning voted last night to begin the process of disbanding the Kittanning Municipal Sewage Authority without their prior consent.

Council President Randy Cloak called for the special meeting, but shortly after it was called to order, council members entered into executive session, due to apparent personnel issues associated with their pending decision.

When Council returned from Executive Session an hour later, Cloak stepped down from his position as President, handing the gavel over to President Pro-Tempe Kim Fox. He then immediately made a motion to “explore and begin the process of the Borough incorporating the operations of the sewage operating facility under the guise of the Borough.”

The motion was passed 5-2, supported by council members Cloak, Fox, Joie Pryde, Wilber Stitt, and Angelo Turco. Both First Ward Council members David Croyle and Betsy Wilt voted against the measure.

Councilman Andy Peters was absent.

After the meeting, Cloak called the decision ‘preliminary’ to the overall goal.

“There are a number of reasons – at this point, we directed our solicitor to look at what the options are and exactly what the process would entail,” Cloak said. “The reason for the meeting (Monday) was not to dissolve the Authority, (but) to discuss the future of the Authority and what the will of Council was.”

Cloak said an ‘ongoing’ issue with the operating agreement between the sewage authority and Kittanning Borough was the reason for his motion.

“There was an operating agreement that was signed when they were created that explains how the two entities would function together – that’s the issue. There’s this agreement that really creates a situation that is very difficult, if not impossible for another organization to function efficiently,” Cloak said.

Wilt spoke with the Kittanning Paper via telephone following the meeting.

“I think the five members (of the sewage authority) have done a wonderful job, and I feel that (Borough Council) is moving too quickly,” Wilt said. “I feel (the sewage authority) should be separate from the Borough. It’s too much responsibility for Borough Council to take on.”

A trio of the five sewage authority members – Mike Swartz, John Shaner and Jean Chemelli, who were all appointed by Borough Council to voluntarily serve –and their solicitor, Robert Zunich of Pittsburgh sat in the audience before Council’s final decision. They were not present for the motion due to their own meeting at Kittanning Hose Company #4’s fire station along Orr Avenue at 8PM.

Councilman David Croyle also voiced opposition to Cloak’s motion following the meeting.

“Initially the motion was to ‘explore’ the concept. Our Solicitor (Tyler Heller) said the motion was not even necessary, but Mr. Cloak insisted. I was agreeable to exploring the possibility with the Sewage Authority over the course of time. However, when Mr. Cloak made the motion to actually begin the process now, I could not in good conscious agree with his motion.”

Al Pepling, of Arch Street, opposed the termination of the sewage authority and supported keeping the authority separate. He was one of the original sewage authority member when it was formed.

Croyle said Heller released a three-page legal opinion to Council prior to the meeting cautioning them on the financial and legal consequences of their actions.

“The Sewage Authority has debt into the millions of dollars,” Croyle said. “According to our Solicitor and a 92-page document I downloaded from the Governor’s office and reviewed before the meeting, it states: ‘An authority may be terminated after the bonds and interest secured by the pledge of revenues from its project have been paid.’ The Sewage Authority does not have the funds to pay off these debts, and Kittanning Borough does not have the funds to borrow money to assume these debts.”

Croyle and other members of Borough Council did not comment on the personnel issue, only stating that the Authority and the Borough currently share the same office space. Croyle felt the Sewage Authority could have been moved out of the Borough office to its Water Street plant office and continue its operation.

Sewage Authority Chairman Peter Graff IV was not in attendance, but sent a letter to council members. The letter read, in part: “The Board has worked tirelessly to maintain high standards concerning every aspect of the Authority… The sudden and unexpected reversal of support which the Board had from Council regarding upgrading office procedures with computerization is indeed strange… The Board’s aim has always been solely in the best interests of the rate payers/customers.”

The authority currently operates with two full-time licensed plant operators and a secretary that is employed by the Borough, but whose salaries and benefits are reimbursed by the authority.

Currently, local banks which once collected payments for the authority have been told to stop accepting payments. Meanwhile, sewage bills can be mailed to paid in person to the Borough office.

Croyle criticized the timing of the vote, citing the Solicitor’s recommendation.

“It disturbs me that five fellow council members read Mr. Heller’s decision and still voted to begin spending time and legal fees to pursue termination of the authority. It was very clear in his document that says: ‘…a considerable amount of thought, investigation and due diligence should be undertaken before formal action is taken.’ They bypassed due diligence and I feel it will hurt the taxpayer in the long run.”

The issue is thought to be an agenda item at future meetings.