Lou Barletta discusses the tax implications regarding the sale of the water assets of the Hazleton City Authority in the Standard Speaker written by Kent Jackson.
Hazleton will begin layoffs in May Although property taxes were raised by about $10.00 per month on $100,000 assessment layoffs were necessary in this year's fiscal budget according to Mary Ellen Leib,acting director of adminstration.
Michael Manzo has plenty to say about the Bonusgate investigation during testimony in the Michael Veon et al trial proceeding in Harrisburg. His wife, Rachel, was an employee of Rep. Todd Eachus who denies knowing about the bonuses.
Pennsylvania American Water acquires the assets of the Nittany Water Company expanding its footprint to 36 counties statewide.
Senator Mellow becomes a renewed target of the watchdogs over rent payments and "cash" payments made over nine years
Showing posts with label Pennsylvania American Water. Show all posts
Showing posts with label Pennsylvania American Water. Show all posts
Wednesday, February 3, 2010
Sunday, January 10, 2010
NCPPP Award-Pennsylvania American Water's Purchase of the Coatesville Water And Wastewater Assets
Pennsylvania American Water Company's purchase of the City of Coatesville's water and wastewater assets received the National Council on Public Private Partnership's award in 2002.
PROJECT SUMMARY
On March 22, 2001, Pennsylvania - American Water Company (PAWC), a subsidiary of American Water Works Company, City of Coatesville Authority (CCA) and the City of Coatesville closed on the sale of CCA's water and wastewater assets to PAWC.
Benefits Derived from the Partnership
The $48.225 million transaction expands PAWC's service territory to include an additional 8,600 water customers and 6,500 wastewater customers in 16 municipalities. In addition, the sale expands PAWC's revenue base, allowing the company to purchase chemicals and equipment at lower costs because they are bought in larger quantities. This allows PAWC to spread costs across a wider customer base - causing greater economies of scale, which benefits PAWC and its customers. The company also recognizes in the future. Over the next 10 years, PAWC estimates that this transaction will result in adding another 6,000 water customers and 4,500 wastewater customers due to the economic development and new housing starts in the greater Coatesville area.
City of Coatesville and Residents
As part of the agreement, the City and its residents are benefiting from the sale in the following ways:
Rates for both water and sewer are frozen for three years
PAWC will contribute annually to the City's Economic Development Fund
Funds from the sale, which exceeded $39.5 million after the debt was paid, were placed in a Reserve Fund
The City will be given a $10,000 credit for future water usage and a $10,000 credit for sewage treatment.
Funds from the sale are being invested to maximize their return to the City in the form of investment income. At the blended investment rate of 6.8%, the return on the reserve fund will be a minimum of $2.686 million annually, which will be utilized for the following tax cuts and program enhancements:
Tax Cuts ($1,101,000): Earned income taxes were cut in half from 2% to 1%, which equates to a $300 savings for a person earning $30,000/year; real estate taxes were cut by 1 million for improved property (from 6.2 million to 5.2 millions), representing a $100 savings for a $100,000 home; and the per capita tax was eliminated (a $20 fee/person). A family of four, who earns $60,000/year and owns a $100,000 house, would save $740/year ($600 on earned income taxes, $100 in property taxes, and $40 from eliminating the per capita tax).
Small Business Enterprise Development Program ($375,000): Provides financial assistance and technical support for disadvantaged persons who seek to start a business.
Coatesville's Multipurpose Recreation and Activity Center ($200,000): Provides debt service, capital and operating dollars for the construction and operation of the center, which will be open year-round, 24 hours a day, with access for all residents.
Annual Funding for Capital Reserve Fund ($500,000): Fund to be used for road paving, park improvements, municipal construction projects, etc.
Enhance Existing Programs ($273,000): To provide additional funding for existing city programs including the size of the police force, additional support for the Main Street Manager program and expanded public works projects.
Rainy Day Fund ($237,000): To be used for emergencies and special projects.
Another cost savings to the customer came as a result of what is termed service laterals. Pennsylvania - American assumed responsibility for maintaining water and sewer service lines from the main in the street to the service line control valve, usually located at the edge of the customer's property, for those customers who dedicated their lines. Typical costs to maintain broken service lines range from $3,000 to $4,000. Prior to the sale, this was the responsibility of the customer.
Originality
The fact that the project was bid was unique. This allowed PAWC to bid competitively on the water and wastewater assets. Otherwise, it could have been sold to another entity, without providing PAWC with the opportunity to bid. Vice versa, this allowed the City to maximize its return on the sale.
Elements within the signed purchase agreement between the two entities were innovative, including the service lateral program. What was the responsibility of the customer at the time of the sale, now is the responsibility of Pennsylvania - American if the customer agreed to dedicate their laterals. This provides a potential cost savings to customers and it provides PAWC with greater control over the operation and quality of the water service, as repairs on these pipelines can be made immediately.
Funds from the sale provided the opportunity to the City for revitalization in the community as well as expansion of its business base through the various tax cuts and economic assistance programs.
The manner in which the trust fund was structured by the city was unique in that all of the dollars obtained from the sale were invested in long-term investments. This maximized the return to the City and will provide permanent financial stability.
Quality
PAWC is the largest investor-owned water utility in the state, serving nearly 6000,000 customers in 35 counties. The company's first operation was incorporated in 1818 in Berwick, Pennsylvania. As such, the company offers Coatesville water and wastewater customers the financial resources and nearly two century's worth of experience in providing the highest quality water and service to its customers.
PAWC's knowledge and resources allow the company to keep pace with new regulations. PAWC is a member of the Partnership for Safe Water, and has received 31 Directors Awards from the US EPA, the state Department of Environmental Protection, and other water-related organizations for achieving excellance in water quality far beyond what is required by federal and state regulations. PAWC is now providing the same high level of service to residents and businesses in the greater Coatesville area.
The transition from CCA to PAWC was seamless and transparent to the customers. The City did not receive any complaints from its residents.
Implementation
Prior to the sale, PAWC associates from operations, engineering, water quality, loss control and human resources met with Coatesville Authority representatives and employees and toured the Coatesville facilities on numerous occasions to determine the needs of the operation. This allowed for a smooth transition upon the PUC's approval.
Economics
The sale expands PAWC's revenue base, allows the company to purchase chemicals and equipment at lower costs because they are bought in larger quantities, and allows the company to spread costs across a wider customer base - a greater economy of scale, which benefits PAWC and its customers. The future expansion prospects of the water and wastewater systems also made the purchase of the Coatesville Authority assets attractive to PAWC.
The residents benefit economically as a result of planned tax cuts, a three-year freeze on their water and wastewater rates, and through the service lateral program.
The City of Coatesville has gained permanent financial stability from the sale, and has enabled them to invest more economic development and community programs and provide significant tax cuts to its residents.
Public-Private Partnership
This partnership between Pennsylvania - American Water Company, the City of Coatesville Authority and the City of Coatesville fits the definition in that it was a contractual agreement, whereby Pennsylvania - American would purchase and therefore own and operate, the Authority's water and wastewater assets. In order for the partnership to be a success, it required the efforts of all partners involved and, as a result of the partnership, all partners benefited from the contractual agreement.
PROJECT SUMMARY
On March 22, 2001, Pennsylvania - American Water Company (PAWC), a subsidiary of American Water Works Company, City of Coatesville Authority (CCA) and the City of Coatesville closed on the sale of CCA's water and wastewater assets to PAWC.
Benefits Derived from the Partnership
The $48.225 million transaction expands PAWC's service territory to include an additional 8,600 water customers and 6,500 wastewater customers in 16 municipalities. In addition, the sale expands PAWC's revenue base, allowing the company to purchase chemicals and equipment at lower costs because they are bought in larger quantities. This allows PAWC to spread costs across a wider customer base - causing greater economies of scale, which benefits PAWC and its customers. The company also recognizes in the future. Over the next 10 years, PAWC estimates that this transaction will result in adding another 6,000 water customers and 4,500 wastewater customers due to the economic development and new housing starts in the greater Coatesville area.
City of Coatesville and Residents
As part of the agreement, the City and its residents are benefiting from the sale in the following ways:
Rates for both water and sewer are frozen for three years
PAWC will contribute annually to the City's Economic Development Fund
Funds from the sale, which exceeded $39.5 million after the debt was paid, were placed in a Reserve Fund
The City will be given a $10,000 credit for future water usage and a $10,000 credit for sewage treatment.
Funds from the sale are being invested to maximize their return to the City in the form of investment income. At the blended investment rate of 6.8%, the return on the reserve fund will be a minimum of $2.686 million annually, which will be utilized for the following tax cuts and program enhancements:
Tax Cuts ($1,101,000): Earned income taxes were cut in half from 2% to 1%, which equates to a $300 savings for a person earning $30,000/year; real estate taxes were cut by 1 million for improved property (from 6.2 million to 5.2 millions), representing a $100 savings for a $100,000 home; and the per capita tax was eliminated (a $20 fee/person). A family of four, who earns $60,000/year and owns a $100,000 house, would save $740/year ($600 on earned income taxes, $100 in property taxes, and $40 from eliminating the per capita tax).
Small Business Enterprise Development Program ($375,000): Provides financial assistance and technical support for disadvantaged persons who seek to start a business.
Coatesville's Multipurpose Recreation and Activity Center ($200,000): Provides debt service, capital and operating dollars for the construction and operation of the center, which will be open year-round, 24 hours a day, with access for all residents.
Annual Funding for Capital Reserve Fund ($500,000): Fund to be used for road paving, park improvements, municipal construction projects, etc.
Enhance Existing Programs ($273,000): To provide additional funding for existing city programs including the size of the police force, additional support for the Main Street Manager program and expanded public works projects.
Rainy Day Fund ($237,000): To be used for emergencies and special projects.
Another cost savings to the customer came as a result of what is termed service laterals. Pennsylvania - American assumed responsibility for maintaining water and sewer service lines from the main in the street to the service line control valve, usually located at the edge of the customer's property, for those customers who dedicated their lines. Typical costs to maintain broken service lines range from $3,000 to $4,000. Prior to the sale, this was the responsibility of the customer.
Originality
The fact that the project was bid was unique. This allowed PAWC to bid competitively on the water and wastewater assets. Otherwise, it could have been sold to another entity, without providing PAWC with the opportunity to bid. Vice versa, this allowed the City to maximize its return on the sale.
Elements within the signed purchase agreement between the two entities were innovative, including the service lateral program. What was the responsibility of the customer at the time of the sale, now is the responsibility of Pennsylvania - American if the customer agreed to dedicate their laterals. This provides a potential cost savings to customers and it provides PAWC with greater control over the operation and quality of the water service, as repairs on these pipelines can be made immediately.
Funds from the sale provided the opportunity to the City for revitalization in the community as well as expansion of its business base through the various tax cuts and economic assistance programs.
The manner in which the trust fund was structured by the city was unique in that all of the dollars obtained from the sale were invested in long-term investments. This maximized the return to the City and will provide permanent financial stability.
Quality
PAWC is the largest investor-owned water utility in the state, serving nearly 6000,000 customers in 35 counties. The company's first operation was incorporated in 1818 in Berwick, Pennsylvania. As such, the company offers Coatesville water and wastewater customers the financial resources and nearly two century's worth of experience in providing the highest quality water and service to its customers.
PAWC's knowledge and resources allow the company to keep pace with new regulations. PAWC is a member of the Partnership for Safe Water, and has received 31 Directors Awards from the US EPA, the state Department of Environmental Protection, and other water-related organizations for achieving excellance in water quality far beyond what is required by federal and state regulations. PAWC is now providing the same high level of service to residents and businesses in the greater Coatesville area.
The transition from CCA to PAWC was seamless and transparent to the customers. The City did not receive any complaints from its residents.
Implementation
Prior to the sale, PAWC associates from operations, engineering, water quality, loss control and human resources met with Coatesville Authority representatives and employees and toured the Coatesville facilities on numerous occasions to determine the needs of the operation. This allowed for a smooth transition upon the PUC's approval.
Economics
The sale expands PAWC's revenue base, allows the company to purchase chemicals and equipment at lower costs because they are bought in larger quantities, and allows the company to spread costs across a wider customer base - a greater economy of scale, which benefits PAWC and its customers. The future expansion prospects of the water and wastewater systems also made the purchase of the Coatesville Authority assets attractive to PAWC.
The residents benefit economically as a result of planned tax cuts, a three-year freeze on their water and wastewater rates, and through the service lateral program.
The City of Coatesville has gained permanent financial stability from the sale, and has enabled them to invest more economic development and community programs and provide significant tax cuts to its residents.
Public-Private Partnership
This partnership between Pennsylvania - American Water Company, the City of Coatesville Authority and the City of Coatesville fits the definition in that it was a contractual agreement, whereby Pennsylvania - American would purchase and therefore own and operate, the Authority's water and wastewater assets. In order for the partnership to be a success, it required the efforts of all partners involved and, as a result of the partnership, all partners benefited from the contractual agreement.
Thursday, January 7, 2010
Water Company Revenues
The political rhetoric against Barletta's plan to takeover the water department of the Hazleton City Authority is so disingenuos it begs correction.
One of the possible suitors, among many, Pennsylvania American Water, is a publicly traded company. It is traded on the New York Stock Exchange with a symbol of AWK. A look at its 2008 annual report shows revenues which exceed $2 billion dollars. 7,000 employees serving 15 million people in 32 states and Ontario,Canada.
By comparison the Hazleton City Authority revenues are approximately $4-5 million.
Aqua Water Company is another business entity that has been mentioned in reports. Aqua Water trades on the NYSE with a symbol of WTR and annual revenues for 2008 of $627 million.
United Water is a third possible candidate. Under their facts and figures page annual revenues for 2007 were $800 million. They manage $2.5 billion in assets. HCA pegged their entire assets at $68 million. 2,600 employees serving over 7 million customers in 26 states. HCA Water Deparment- 40 employees in 1 state.
Hazleton City Councilman Jack Mundie stated the HCA is the best run authority in the state. While not being certain where the study was performed to back up that conclusion it is impossible to believe that companies acrruing over $3.5 billion in sales would perform any worse than an very small authority operation taking in $4-5 million.
Quelling the opponents on the water quality issue read this Consumer Confidence report from American Water at their Mount Laurel Treatment Facility.
Here is their history from 1886-1999.
The issue isn't whether it makes sense to sell the Hazleton City Authority's water department. The issue is Barletta. His opponents are so set to defeat him that any proposal would be fought and fought hard.
Chris Paige has attended two Hazleton City Council meetings. He talks about the property tax situation in Hazleton. While denying he is a Democratic operative where is his disgust with the $466 million in debt accrured by Luzerne County mismanagers? The law he cited does not apply to Hazleton and with a little research any first year law student would have reached that conclusion. Yet, Mocarsky over at the Times Leader couldn't wait to run with the story only to have the facts blow it right out of the water.
Under the Municipal Authorities Act of 1945 and a previous court case cited by SOP all it takes is a resolution of Hazleton City Council to order the Hazleton City Authority to divest itself of the water department and the plan can become a reality. However, keep in mind that this issue is still just a proposal with all options open.
One of the possible suitors, among many, Pennsylvania American Water, is a publicly traded company. It is traded on the New York Stock Exchange with a symbol of AWK. A look at its 2008 annual report shows revenues which exceed $2 billion dollars. 7,000 employees serving 15 million people in 32 states and Ontario,Canada.
By comparison the Hazleton City Authority revenues are approximately $4-5 million.
Aqua Water Company is another business entity that has been mentioned in reports. Aqua Water trades on the NYSE with a symbol of WTR and annual revenues for 2008 of $627 million.
United Water is a third possible candidate. Under their facts and figures page annual revenues for 2007 were $800 million. They manage $2.5 billion in assets. HCA pegged their entire assets at $68 million. 2,600 employees serving over 7 million customers in 26 states. HCA Water Deparment- 40 employees in 1 state.
Hazleton City Councilman Jack Mundie stated the HCA is the best run authority in the state. While not being certain where the study was performed to back up that conclusion it is impossible to believe that companies acrruing over $3.5 billion in sales would perform any worse than an very small authority operation taking in $4-5 million.
Quelling the opponents on the water quality issue read this Consumer Confidence report from American Water at their Mount Laurel Treatment Facility.
Here is their history from 1886-1999.
The issue isn't whether it makes sense to sell the Hazleton City Authority's water department. The issue is Barletta. His opponents are so set to defeat him that any proposal would be fought and fought hard.
Chris Paige has attended two Hazleton City Council meetings. He talks about the property tax situation in Hazleton. While denying he is a Democratic operative where is his disgust with the $466 million in debt accrured by Luzerne County mismanagers? The law he cited does not apply to Hazleton and with a little research any first year law student would have reached that conclusion. Yet, Mocarsky over at the Times Leader couldn't wait to run with the story only to have the facts blow it right out of the water.
Under the Municipal Authorities Act of 1945 and a previous court case cited by SOP all it takes is a resolution of Hazleton City Council to order the Hazleton City Authority to divest itself of the water department and the plan can become a reality. However, keep in mind that this issue is still just a proposal with all options open.
Wednesday, January 6, 2010
Questions About Meals Paid By American Water System Persist
Mr.'s Andras and Ammon of the Hazleton City Authority, I have a question.
From Steve Mocarsky's article dated Monday,July 28, 2003:
FREE MEALS PROVIDE BONE OF CONTENTION TWO HAZLETON CITY AUTHORITY MEMBERS SAY WATER SYSTEM MANAGER'S CUSTOM NO BIG DEAL.
Some Hazleton City Authority board members who approved a five-year, $13-million contract with a company to manage the area's water system say there's nothing wrong with accepting free meals from the company.
The Times Leader received a tip that American Water Systems - a subsidiary of American Water Works - has been regularly buying meals for Hazleton City Authority board members Richard Ammon and Phil Andras.
Matthew Brouillette, president of the Commonwealth Foundation, says his organization advocates the practice of municipal entities contracting management work to private companies to provide the "best possible service" to the public.
"But the only way taxpayers benefit is if there's a regular review of the services and contract," Brouillette said.
Brouillette said the authority should send out requests for proposals from management companies when the management company's contract is set to expire to make sure the authority is getting the best service at the best price.
The authority pays American approximately $2.7 million per year to manage water department operations. Cahalan of American Water Systems said the authority board did not send out requests for proposals before American's contract was renewed three years ago.
Did you receive gifts from American Water Systems in exchange for the awarding of a no-bid contract in the amount of $13 million dollars? Are you willing to disclose to the public the exact amount of meals or other perks that may have been provided by American Water Systems to you as members of the board of the Hazleton City Authority?
Is the Hazleton City Authority and ratepayers currently paying for your meals??? There are more questions to come.
Standard disclaimer. No crime is alleged just question on ethics.
From Steve Mocarsky's article dated Monday,July 28, 2003:
FREE MEALS PROVIDE BONE OF CONTENTION TWO HAZLETON CITY AUTHORITY MEMBERS SAY WATER SYSTEM MANAGER'S CUSTOM NO BIG DEAL.
Some Hazleton City Authority board members who approved a five-year, $13-million contract with a company to manage the area's water system say there's nothing wrong with accepting free meals from the company.
The Times Leader received a tip that American Water Systems - a subsidiary of American Water Works - has been regularly buying meals for Hazleton City Authority board members Richard Ammon and Phil Andras.
Matthew Brouillette, president of the Commonwealth Foundation, says his organization advocates the practice of municipal entities contracting management work to private companies to provide the "best possible service" to the public.
"But the only way taxpayers benefit is if there's a regular review of the services and contract," Brouillette said.
Brouillette said the authority should send out requests for proposals from management companies when the management company's contract is set to expire to make sure the authority is getting the best service at the best price.
The authority pays American approximately $2.7 million per year to manage water department operations. Cahalan of American Water Systems said the authority board did not send out requests for proposals before American's contract was renewed three years ago.
Did you receive gifts from American Water Systems in exchange for the awarding of a no-bid contract in the amount of $13 million dollars? Are you willing to disclose to the public the exact amount of meals or other perks that may have been provided by American Water Systems to you as members of the board of the Hazleton City Authority?
Is the Hazleton City Authority and ratepayers currently paying for your meals??? There are more questions to come.
Standard disclaimer. No crime is alleged just question on ethics.
Chris Paige- Did You Read The Law You Cite?
In a quick grab of the headlines Chris Paige thought he had Lou Barletta in his sights over the proposed sale of the Hazleton City Authority-Water Department. He even had the Standard Speaker convinced.
Chris Paige, the Monroe County lawyer who is running against Barletta in the Republican primary for Congress, claims that state law requires at least 75 percent of the municipalities served by the HCA to approve the plan. He also disputes the mayor's cost projections.
Let's examine HB 893 from 2006, the law in question.
First, this law was specifically written for the City of Lebanon.
Second it defines a city as- "City." A city of the third class which has adopted a home rule charter and has a population of not more than 30,000.
Hazleton adopted the mayor/council optional plan sometimes referred to as Plan B under Act 62 of 1972, not home rule. Chris- Strike One...so that makes this law not apply to Hazleton
Secondly, according to the last census of 2000 Hazleton had a population of 23,329. In order to meet this criteria all the surrounding municipalities being serviced by HCA would have to have at least a population of 34,994 people.
According to census data Hazle Township only had a population of 9,000 people. West Hazleton had a population of 3,542. So the likelihood of the resident requirement being met is almost nill. Even if the population requirement were met the law is specific that both criteria are needed. Chris- Strike Two
It is obvious that a person who is a lawyer should be able to read the law, know the district the person wants to run for Congress in, and understand the applicability of the laws. It should be incumbent on the newspapers to do better research before accepting Mr. Paige's assessments in the future.
There is no guarantee that the water department will be sold as it is just a proposal at this point. However claims of poor water quality are bogus.
Let's use one of the public companies mentioned as a possible suitor as an example. Pennsylvania American Water maintains its own labs, researchers, scientists, and plant operators as part of ensuring water quality. Does the HCA have its own laboratories, researchers, or scientists? The answer is no.
The HCA Water Department does not even maintain a website. Here is a link to Pennsylvania American Water's page about choloramines which is the agent replacing chlorine in the disinfection process.
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