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.

Hearing On Water Company Sale-Editorial

In yesterday's Standard Speaker an editor unnamed wrote an Opinion piece speaking to request by the board of the Hazleton City Authority for a public hearing on the proposal by Mayor Barletta to look at selling the water department of the Hazleton City Authority.

Mayor Lou Barletta's plan to generate income by selling the Hazleton City Authority water department is intriguing, but the idea raises many questions.


The only way to answer those questions is to hold a public hearing on the proposal.

Mr. Editor that isn't the only way. When the proposal was first put forth members of the board stated they had a lot of questions for the Mayor. It has come to light that those same members of the HCA board are telling employees of the water department that the Mayor has refused to meet with the board.

The realities are that the board only invited Council Members Joseph Yannuzzi and Evelyn Graham to meet with them after their last scheduled authority meeting. No invitation was ever extended to the Mayor according to Barletta.

The piece goes on to state
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.

Mr. Editor if you read the Times Leader you would find that Mr. Andras, Hazleton City Authority Member dismissed Paige's claims with one sentence.

Authority Chairman Phil Andras said he’s not certain the Pennsylvania statute would apply to the authority because 60 percent of its customers live in Hazleton.

The law Paige cites contains a provision that the total residents of the municipalities outside the boundaires of the city must exceed the residents who live inside the city by 50%. If Hazleton has a total population of 22,000 at the last census then the total residents served by the Authority outside Hazleton must be at least 33,000.

Another statement in the Standard Speaker editorial:

The Hazleton City Authority board is against the plan. They say selling the water system to a private company will result in higher water rates and possibly poor service.

Oh really. Why didn't you tell the readers that the Hazleton City Authority raised its rates 10 percent in 2008?

From a prior SOP post:

Talk about poor quality of water distribution read this comment. PA: Water System Upgrades
9/25/2009

For the last 10 years, 40,000 residents of Hazleton, Pa., periodically have been without sufficient quantities of clean drinking water, or without water service at all, due to aging water mains.

Biased in the media has no place when such a serious issue is at question. As for a public hearing it would be another dog and pony show.

The HCA members of the board, Mayor Barletta, and Hazleton City Council
members need to sit down and explore the proposal, no hearing necessary just dialogue. In the end right now that is all it is, just a proposal. It is possible that some great alternatives will come with this exchange of ideas.

Barletta,Hazleton City Council, and the taxpayers are faced with some serious financial consequences. At least Barletta came forward with a plan. To date no one else did. Let's not lose focus that there are jobs in the city at peril where layoffs have already started. There are also jobs at the HCA that are of concern. It would not make sense to save the city jobs at the expense of HCA water department employees. But the rhetoric and posturing by opponents is designed to change that focus.

If the HCA members are serious they need to be up front and produce their documentation that they requested the Mayor attend a meeting. Otherwise they are demonstrating just how political they are. In 2003 Mr. Andras stated "It's just an attack on me" when questioned why a five year, $13 million dollar no-bid contractor was paying for his meals after Authority meetings. Mr. Andras, if I were you I would pay very close attention to what happened to certain Luzerne County board members recently.

Hazleton City Authority Members Want To Stop Sale

Phil Andras
In today's Standard Speaker the members of the Hazleton City Authority attack Mayor Lou Barletta over his plan to sell the water department of the authority. .

The allegations by the board members speaks to their parochial, provincial, and partisan position with regards to what is right for the citizens of Hazleton of which their oath demands allegiance. It also points to persons where their fields of education lack the proper training to be part of the management of a $68 million water distribution asset. The cliche is circling the wagons to foster and unleash a typical, opposition attack found in any political can on the shelf of distraction.

Water authority wants to stop sale
By AMANDA CHRISTMAN (Staff Writer)
Published: December 31, 2009

Ammon said 40 percent of HCA customers live outside Hazleton. HCA has customers in Hazle Township, West Hazleton, Banks Township, Beaver Meadows, Packer Township, Lausanne Township, Foster Township, Jeddo Borough, Mahanoy, Black Creek, Sugarloaf, Delano and Butler townships.

Those ratepayers, authority Chairman Phil Andras said, built the authority, which today has about $68 million in assets. Andras said in that respect, the authority is owned by its customers, who each have $4,000 to $5,000 invested in it.

Mr. Andras is principal at the Shennandoah Junior-Senior High School. Do they have business courses as part of the curriculum? If you believe Mr. Andras's statement then all of us must own part of PPL, ATT, UGI, and the cable company.

The ratepayers are customers of the water department. They buy its product and service. They did not "invest" in the authority no more than any customer of PPL who purchases power or UGI that purchases gas.

It took 71 years to build the authority and it could take 30 seconds on a vote to end it," Ammon said. Authority members believe the sale of the authority to a private company will eventually lead to higher customer rates.

The water department existed long before the Hazleton City Authority. The Municipal Authorities Act was passed in 1935. There was water long before 1935 in Hazleton. Who created that infrastructure and managed it? The City of Hazleton. It turned its assets over to the Authority.

A google search turned up this information from the Department Reports of Pennsylvania. The Wyoming Valley Water Supply company , a subsidiary of Lehigh Valley Coal Co, was providing water service in the City of Hazleton.

A little bit of history for the principal.

The Diamond water works were erected in 1887. Already the demands require that they double their capacity, and at this time (June, 1892) work has commenced enlarging their reservoir. The Hazleton Gas Company was incorporated March 14, 1872. Commissioners named in the act: C. Pardee, W.A.M. Grier, Sylvester Engle, R.F. Russell, John Bond and James James. Board of directors: president, C. Pardee; secretary and treasurer, W.A.M. Grier. The works were built in 1872 and gas furnished customers in November of that year.

In the Fourth Annual Report of the Commissioner of Health of the Commonweatlh of Pennsylvania the report indicates water supplied to the City of Hazleton came from the Hazleton Water Company found on page 731 and 732.

On page 725 of that report one will find the following information. The Hazleton Water Company was chartered January 8, 1875 and the Diamond Water Supply Company was incorporated June 24, 1887.

It appears the Hazleton Water Company operated as part of the authority after the Hazleton City Authority was formed in 1938.

To the claims of water rates increasing when a municipality sells it water division look at this article from October, 2009.

Water rates to fall in wake of Saxonburg system sale

The Saxonburg Area Authority completed a $6 million sale of its water business to Pennsylvania American Water on Wednesday.

The sale will result in an 18 percent rate reduction for nearly three-fourths of the authority's former 1,100 customers in the borough andparts of Jefferson and Clinton townships, said authority Manager Paul Cornetti.

Back to the Standard Speaker article.

Mundie said when Atlanta, Ga., sold its water company for $420 million to a private company in Jan. 1, 1999, it found more problems with service. He said dirty water and non-functioning service created great disastifaction with ratepayers.

To Hazleton City Councilman Mundie's claims of poor water quality which are nothing more that boilerplate rhetoric found in the political arena of defense. The following information is contained in the 2008 LACKAWANNA & LUZERNE COUNTY REGIONAL FACT BOOK:

Pennsylvania-American Water Company (PAWC) is northeastern Pennsylvania’s single water utility. PAWC is the state’s largest regulated water utility and serves more than two million people in 372 Pennsylvania communities. Pennsylvania-American Water is a division of RWE AG, a German company. PAWC has 38 water treatment facilities, three wastewater facilities, and about 8,900 miles of pipeline to service its
customers.

While PAWC is the leading water utility for Scranton, Wilkes-Barre, and surrounding areas, Hazelton actually receives its water supply from the Hazelton City Authority. The Authority employs American Water Services, Inc. to lend its water industry professionals. These trained water experts help to treat, distribute, and manage water resources in the City of Hazelton.

Mr. Mundie, how much training do the Board Members receive that would qualify being called "experts" when compared to a company that serves over 2 million customers in 372 Pennsylvania communities?

This information about Pennsylvania American Water can be found on its website.

In Pennsylvania, the Pennsylvania Public Utility Commission (PA PUC) and the Pennsylvania Department of Environmental Protection (PA DEP) sets rules and we carefully follow them. Those regulations are what help to ensure everyone is receiving quality water and wastewater service at a fair price. All changes and increases to service rates are directly related to the cost of providing high quality service and are subjected to a public review process and approval by the PUC.

Pennsylvania American Water follows strict regulations created by the United States Environmental Protection Agency (USEPA) regulations help provide high quality drinking water. Because we are privileged to work in cooperation with the USEPA to help in the development of national drinking water standards, we are often years ahead of the industry in implementing regulations.

Pennsylvania American Water is committed to delivering high quality water to all of our customers in Pennsylvania. We conduct about 200,000 tests per year for about 100 potential contaminants, checking drinking water quality at every stage of the water treatment and delivery process.

We are also a voluntary member of the Partnership for Safe Water, and have received 28 Directors Awards statewide for providing water to our customers that surpasses what is required by drinking water standards.

Talk about poor quality of water distribution read this comment. PA: Water System Upgrades
9/25/2009

For the last 10 years, 40,000 residents of Hazleton, Pa., periodically have been without sufficient quantities of clean drinking water, or without water service at all, due to aging water mains.

As the Mayor tries to clean up the acid mine drainage into the Jeddo Tunnel with the Hazleton Creek project this tidbit speaks to authority members' concerns about contamination. 1973- The Hazleton City authority decides to use the Jeddo Tunnel as a source of water providing that the state provides 75 % of the project's $8-$10 million dollar cost.

Finally, let's address the good principal's comment regarding working with the City. Andras said the authority is willing to help the city out as it has in the past. He suggested possibly entering into a renewable energy program that could benefit the authority and the city. Mr. Andras also made the commment about being a "no-brainer". Well here is a prime example of no brains.

The Hazleton City Authority has been engaged in trying to execute a windmill project for several years.

Windmill Project Would Save Hazleton City Authority $400K
BY JIM DINO
STAFF WRITER. Hazleton Standard-Speaker
Published: Saturday, January 31, 2009 4:13 AM EST

A windmill project boosted this week by a $300,000 state grant would save the Hazleton City Authority water department almost $400,000 in energy costs over two decades.

It would be the first project in Pennsylvania in which the power generated would be dedicated to a public entity and not sold to the power grid.

Community Energy has received a $300,000 grant from the Pennsylvania Department of Environmental Protection’s Energy Harvest Grant Program, to supplement a previous $200,000 state grant for the design and installation of a single, 600-kilowatt wind turbine on HCA land along Route 424.

Oh..this project sounds so fantastic one wants to prematurely pop the bubbly before tonight's ball drop. But hold one.

In a letter to John Hanger, Acting Secretary, Department of Environmental Protection from Senator Mary Jo White, Chairman of the Senate Evironmental Resources and Energy Committee dated March 18, 2009 she asks the following question of Mr. Hanger.

Dear Acting Secretary Hanger:

I am writing to request additional information regarding several grants approved by your Department.

On January 29th, the Governor’s office and the Department of Environmental Protection (DEP) announced a $300,000 Energy Harvest grant to Citizens for Pennsylvania’s Future (Pennfuture). The announcement states that the grant is to supplement a previous grant for the design and installation of a wind turbine at the Hazleton (Luzerne County) Authority Water Department. The previous grant awarded by DEP for the same project was a $200,000 grant awarded in November 2005. Ostensibly, the justification for the second grant award was because costs for the purchase and installation of a wind turbine had significantly increased in the previous two years.

I would appreciate your response to the following questions:

1) As head of Pennfuture, you were the signatory on the $300,000 application to DEP, dated June 18, 2008. Given the fact that the DEP Secretary has final departmental decision-making as to which applications are funded, what if any steps did the Administration take to ensure that this application was reviewed by someone outside of DEP’s chain of command? If so, who?

2) Community Energy, Inc., a subsidiary of Iberdrola Renewables, is to acquire the wind project and serve as the project operator. That being the case, what is the rationale for a third-party, non-profit organization such as Pennfuture to serve as the funding applicant? Why is it not more appropriate for either Community Energy, Inc. or the Hazleton Authority Water Department to serve as the funding applicant?

3) As part of its 2005 grant application, Pennfuture requested $50,000 for “salaries and benefits”. How much of the 2005 grant of $200,000 was retained by Pennfuture for salaries, benefits or any other administrative costs?

4) How much of the 2009 grant for $300,000 is to be retained by Pennfuture for salaries, benefits or any other administrative costs?

5) Has the Department awarded supplemental grants – which exceeded the size of the original grant – to other organizations to cover high-than-anticipated project costs? If so, please provide examples.

6) A primary focus of Energy Harvest is to leverage public dollars to spur private investment. For example, the January 29, 2009 press release noted that over five years Energy Harvest has awarded nearly $33.5 million while leveraging nearly $110 million in private investments.

However, my understanding is that this project is to receive nearly $700,000 in public or ratepayer assistance ($500,000 Energy Harvest; $192,000 Sustainable Development Fund production credits), with projected benefits to ratepayers of only $393,000 (over 20 years) to customers of the Hazleton Authority Water Department (essentially paying $393,000 less for wind power from the installed wind turbine compared with wind energy rates from PPL).

How is spending near $700,000 to save $393,000 over 20 years a positive investment of public dollars?

Basically the taxpayers of Pennsylvania are giving the Hazleton City Authority $692,000.00 so that it can invest it and earn only $393,000 back in 20 years. The exact definition of no brains. The Commonwealth should just give HCA $393,000 so it can keep the other $299,000.00. Mr. Andras must go to Paul Kanjorski's school of "FREE MONEY".

Couple that devastating consequence with the fact previously written that the Board must increase its underfunding of the pension to the tune of $84,000 for several years this Board is definitely demonstrating an acute business acumen to lose vasts amounts of money.

How much does the Board get paid between meetings, trips, and seminars? The Board of the Hazleton City Authority has alot to answer for when it decided that its personal interests supercede the interests of the citizens whom they represent.

To Ms. Cuozzo's comment that appears on the website of the Standard Speaker article this court case will factually prove that her statements are incorrect.

The basic question is, however, does the Township have the authority under the law and the contract documents (the Trust Indenture and Lease) to order the Authority it created to dissolve itself.

Section 14 and Section 18A of the Act (Sections 14 and 18A) govern the termination of the Authority. Section 14 has been held to authorize the Township, as the creating municipality, to take over the Project pursuant to Section 18A after the impediments of Section 14 in the form of agreements, claims and outstanding debt obligations (the Bonds) are discharged. Forward Twp. Sanitary Sewage Authority v. Twp. of Forward, 654 A.2d 170 (Pa. Cmwlth. 1995).4 Section 18A authorizes the Township to acquire a project after assuming all obligations related thereto. The Township created the Authority and, under Section 18(A) of the Act, it has the power, without the consent of the Authority, to order the Authority to comply with the Township’s Resolutions to pay off all Bonds and debt, convey all of its assets and dissolve the Authority.

To all those attending the Virginia Tech vs. Tennesse game tonight at the Georgia Dome, please don't drink the water. Word is it is unsafe.