Elizabeth Twp. ponders plans for debt funding
By Tim Karan
Published: Tuesday, Aug. 27, 2013, 3:41 a.m.
As Elizabeth Township looks at ways to dissolve the sanitary authority and assume an approximate $34 million debt, the authority's supporters — including several township commissioners — have made it clear they won't go down without a fight.
Tempers flared again Monday evening during a special meeting to adopt a not-to-exceed borrowing ordinance for the acquisition of the authority, which must “dissolve and wind up its affairs” before Oct. 24, according to a consent order issued by Allegheny County Court of Common Pleas Judge M.A. Della Vecchia.
Joseph Muscatello, managing director with public finance firm Boenning & Scattergood, told commissioners that he researched three ways the township could take over the debt, each with a slight increase in residential sewage rates.
“If the township would take over the authority and use none of the authority's money, the debt service would go up approximately $420,000,” Muscatello said. “With 5,000 customers over 12 months, it would cost the average customer about an additional $7 per month.
“If you use the debt service reserve fund monies, which is about $1.7 million, you can get that $7-per-month additional charge down to about $5. If you use both the savings and debt services fund, the additional cost would be down to about $3 per month.”
Muscatello warned that interest rates have changed since he went over similar possibilities with the commissioners in May, and if the rates stay unstable it could blur the township's plans.
“Interest rates on the municipal side have gone up about 100 basis points since May,” he said. “So that's going to make a big impact on these numbers. You won't know how much it's actually going to cost until you actually do the bond issues.”
Jeff Mills from law firm Reed Smith said there is a solution that could benefit the township and residents.
“We believe there is an alternate path to potentially have the township go through the consent process with the bond insurer and — connected with the dissolution of the authority — the township would be able to assume the debt” without having to refinance, Mills said. “That then takes all the interest-rate risk out of this transaction. So all of the increases in rates would go away.”
Commissioners authorized the legal and financial consultants to move forward with reviewing Mills' plan and to provide their legal opinion about whether it would be possible.
“If we're able to do that, it's absolutely the best-case scenario and frankly a much better scenario than even I believed we would be able to achieve,” township Solicitor Pat McGrail said.
In case that plan doesn't pan out, the commissioners approved Ordinance 904, which will enable them to incur up to $41 million to complete the refinance of the authority debt.
“That's definitely Plan B,” McGrail said. “We want Plan A.”
The commissioners passed a motion not to take any action under that ordinance until they hear from their legal and financial team on the more desirable option.
But throughout most of the meeting, frustrated members of the sanitary authority board and other supporters accused the commissioners of not knowing what they're doing, and directly asked the board majority members — president Gene Francesconi, vice president Larry Vota and Commissioners Claire Bryce and Chris Evans — for reasons as to why the authority needs to be closed.
Authority board vice chair Jim Lesniewski Sr. pleaded for any sort of explanation.
“I spent 18 years on this job,” he said. “Can somebody tell me what I've done wrong that all this has to happen?”
The commissioners did not supply any specific answers, but Commissioner Joanne Beckowitz deflected the question to the majority members.
“You need to ask four members sitting on this board why this is happening,” she said. “You've done nothing wrong and I applaud you for your 18 years of service.”
Beckowitz turned to the other commissioners and said, “I'm telling you, this is the wrong thing and it's going to come back to haunt you guys.”
The sanitary authority has scheduled a public informational meeting at 6 p.m. on Wednesday at the Boston Spectrum.
Tim Karan is a staff writer for Trib Total Media. He can be reached at 412-664-9161 ext. 1970, or firstname.lastname@example.org.
Show commenting policy
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.
- Oakmont father-son team’s efforts help add Mon Valley names to police memorial
- McKeesport man wanted in shooting nabbed in Elizabeth Township
- McKeesport crews prep for new KaBOOM! playground
- Serra Catholic High School friary to house foreign students
- McKeesport student to celebrate Jackie Robinson’s legacy
- Markosek supports McCord for governor
- Steel Valley Bicycle Tour will raise funds for trail maintenance
- 5 Operation Pork Chop defendants sentenced to 5 years probation
- East Allegheny wins Kennywood’s Education Days contest
- Crews fill Duquesne sinkhole
- Parole denied for man convicted in 1997 slaying of 14-month-old