Municipal Authority of Westmoreland County's water upgrade could be costly
Municipal Authority of Westmoreland County water rates could increase by 14 percent as part of a proposal revealed on Wednesday for the utility to borrow $141 million for system improvements.
Authority board members could vote as early as Thursday during their regularly scheduled business meeting to implement a five-year plan that would overhaul the water system's treatment and delivery systems.
“You're going to raise rates periodically, but in terms of dollars and cents to every customer it's nominal for the improvements we are making. It won't amount to what they're paying each month for cable,” said authority manager Chris Kerr.
Authority officials spent the last year evaluating the utility's operations and needs and culled an initial list that included recommendations for $500 million in improvements.
The final report, made public at a special meeting Wednesday night, identified several major projects, including $36.4 million for reconstruction of more than 51,000 feet of the main water line that stretches throughout the center of Westmoreland County.
That project is a continuation of a $26 million effort to upgrade the main line that was started in 2006. That project and other improvements were paid for from a $57 million loan the authority is still paying off.
As part of the new plan, authority officials proposed a $24 million project to replace other water pipes, $21 million to upgrade and replace pump stations and $16.4 million in improvements to the system's three water treatment plants.
The authority wants to borrow $8 million to pay for infrastructure upgrades needed to sell water to customers in Monroeville and Plum, which will begin in 2016.
“If we don't do this plan now, 10 years from now the cost will be twice,” board member Randy Roadman said.
If board members approve the plan, the authority will have to secure its largest loan ever, Kerr said.
Initial estimates call for the money to be borrowed over 30 years at a 4 percent interest rate, gaining $8 million in yearly debt repayments.
Board chairman Jerome DeFabo said the authority should act now rather than wait to complete the improvements.
“It only makes economic sense. If we are going to do something, we should do it today,” DeFabo said.
Board member Joe Dreskler said he supports the overall concept of the upgrades.
“We're making changes that will make the system more efficient,” Dreskler said.
Any rate increase likely won't go into effect until next year. Rate hikes are generally approved when the authority's annual budget is finalized in March.
The authority last raised its rates in 2009 when a 20 percent hike was approved.
Earlier this year, the authority briefly considered a major increase in the quarterly surcharge that applies to all 125,000 water customers in the five counties served by the utility. But board members eventually backed off the plan that would have increased the surcharge from $1 to $5.
Instead, the board borrowed $2 million from its $6 million surplus to balance its $62 million budget.
Rich Cholodofsky is a staff writer for Trib Total Media. He can be reached at 724-830-6293 or email@example.com.