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$141M water system plan largest ever in Westmoreland County

| Friday, Oct. 12, 2012, 12:02 a.m.

The Municipal Authority of Westmoreland County board on Thursday authorized the largest capital improvement program in its history.

Board members unanimously approved a five-year plan that will require borrowing about $141 million for major upgrades to the authority's water delivery and treatment systems.

Water bills for the average homeowner could increase by nearly $50 a year as a result.

“This is a historic day here,” Chairman Jerome DeFabo said. “I'm hoping people will believe in us, and 30 and 40 years from now, they will say thank you.”

The authority will look to secure financing. Officials said they expect to finalize it in about three months.

Early estimates suggest that the authority can borrow the money at a 4 percent interest rate, which will require debt repayments of about $8 million annually over the next 30 years.

Authority Manager Chris Kerr said a 14 percent rate hike would be needed to cover the cost of the capital improvement program.

That translates to an additional $4 per month for the average residential customer. The authority serves more than 120,000 water customers in five counties.

Rates won't be increased until next April, at the earliest, Kerr said. Board members could vote to approve the hike as part of the 2013-14 budget that will be presented in March.

“Now the details start,” said board member Keith Staso.

Those details include finalizing the construction projects proposed in the five-year plan, which was introduced this week after a year of evaluating the system's infrastructure.

Authority engineers proposed a continuation of a project started in 2006 to upgrade the main water distribution lines running through central Westmoreland County.

About $36 million is earmarked for that project to enable the authority to provide water to all customers should one of its major intakes or treatment plants goes off line.

Plans call for improving the system's three water treatment plants, replacing pump stations and installing new pipe. Money will be used for infrastructure needed to sell water to Monroeville and Plum as part of a deal reached this year to begin serving those communities in 2016.

The authority wants to repaint some of its 63 water tanks and replace up to 15,000 water meters.

The authority borrowed $57 million in 2006 to finance improvement projects.

Water rates have remained steady since 2009.

Meanwhile, authority board members gave its management company a bonus on Thursday.

Under the terms of its contract, Resource Development and Management Inc. of Forest Hills can be given annual incentive pay of up to $100,000, provided it hit a series of benchmarks. The amount is determined by the board.

Board members unanimously awarded a $90,000 incentive payment.

The company received $850,000 in base pay this year. That will increase to $950,000 next year.

RDM last year received a $100,000 incentive last year and $99,000 in 2010.

“We've had a historical year at the authority with a great many achievements,” said Kerr, a partner in RDM who is paid by the company.

RDM officials cited the authority's efforts to build a water pipeline linking Johnstown to Ligonier, inking a deal to sell water to Monroeville and Plum and finalizing a new five-year labor deal.

“They did a great job and it (incentive payment) is in the contract,” said board member Joe Dreskler.

Rich Cholodofsky is a staff writer for Trib Total Media. He can be reached at 724-830-6293 or rcholodofsky@tribweb.com.

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