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Municipal Authority of Westmoreland County moves to complete financing for $141M in infrastructure upgrade

| Tuesday, March 19, 2013, 12:01 a.m.

Financing for a $141 million cash infusion to update the Municipal Authority of Westmoreland County's aging infrastructure is scheduled to be completed next month.

Authority board members on Monday hired RBC Capital Markets, an international investment banking firm based in Canada, to head up its effort to sell bonds to pay for a five-year capital improvement project.

“Our goal is getting the financing for the five-year plan by the end of April or in early May,” said Sara Davis Buss, the authority's special counsel for the bond issue.

Authority board members late last year approved an ambitious capital improvement plan that calls for $141 million in enhancements to the water system, which supplies more than 120,000 customers in five counties.

About $36 million will be earmarked to extend transmission lines throughout Westmoreland County to provide water to all customers should one of the authority's major intakes or treatment plants goes offline.

Plans call for improving the system's three water treatment plants, replacing pump stations and installing new pipes.

Money will be used for new infrastructure needed to sell water to Monroeville and Plum.

Last summer the authority signed a 40-year deal to sell water to about 70,000 customers in Monroeville and Plum. The $110 million deal is slated to begin in 2016.

Authority Manager Chris Kerr said construction of a new line to connect the authority's water transmission lines to the Monroeville and Plum systems will be the first project started with the money.

In addition, the authority will begin replacing water lines throughout the 2,300-mile system. Kerr said the authority will replace about 64 miles of water lines over the next five years.

“We'll start a number of smaller line replacements almost immediately,” Kerr said.

The projects will be paid through the selling of municipal bonds, Davis said.

Those bonds could total up to $150 million to cover the costs of issuing the debt.

The authority's investment banker will be paid up to $350,000, Kerr said.

Authority board members last year implemented a 25 percent rate increase to offset years of stagnant revenues and to finance the new projects.

The rate increase of 25 percent will go into effect April 1. The annual cost of water for the average residential customer will increase by $85, according to the authority.

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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