Jeannette puts water panel up for sale
By Richard Gazarik
Published: Friday, May 3, 2013, 12:01 a.m.
The City of Jeannette is shopping its water authority to the Municipal Authority of Westmoreland County in an effort to raise cash to pay debts, city officials said.
“We're looking at making a profit, selling it for a profit,” said city clerk Mike Minyon. “We're trying to raise cash to meet our financial obligations.”
Minyon and Mayor Robert Carter said the offering is not a desperate move to avoid being declared a financially distressed city subject to a state takeover. The city is working with the state to improve its financial footing.
“We're trying to see if there is any interest,” Carter said. “They've taken over other authorities. Our sewage rates have been going up every single year. If someone can do a more effective job, I'm going to look at every option.”
Doug Pike, superintendent of the Jeannette Municipal Authority, said the proposal came as a surprise to him.
“I'm not aware they're trying to sell it,” he said.
Authority Chairman Dustin Ager and Solicitor Morrison Lewis did not respond to requests for comment.
Jeannette's authority serves 5,000 customers in the city, Penn Borough, and parts of Hempfield and Penn townships.
Minyon said city officials sent an email to county municipal authority officials, who requested more information.
The city is trying to sell assets to meet last year's obligation to the police pension fund, which was due in December. A firetruck and a street sweeper are for sale.
“I'm going to send $75,000 (to the state) next week on the $414,000 owed last year,” Minyon said. “Our bills are paid to date.”
In addition to the pension obligation, the city owes businessman Frank Trigona more than $235,000 in damages and legal fees for a protracted lawsuit that he won against the city last year.
The city has received only “one nibble” on the fire truck. Minyon said even if the truck is sold, the proceeds will have to be returned to the Liquid Fuels Fund, because that money financed the original purchase.
The city further is considering refinancing a bond issue and permanent layoffs.
“I'm not painting you a rosy picture. We're far from being out of the woods,” Minyon said.
The city instituted alternating layoffs among police officers, but that saved no money because officers made up for lost wages by working overtime. Carter said there were not enough officers available to cover shifts and other officers who are assigned to the drug task force. Permanent layoffs are possible, he said.
“We're going to start talking about that,” he said.
The city's control over the municipal authority is limited to appointing members to the board and signing off on bond issues.
Minyon believes the city has the legal authority to sell the agency because it guarantees the bonds.
The Jeannette Municipal Authority is considering floating a $12 million bond issue to pay for upgrades to its sewage treatment plant and sewage system in order to comply with state environmental laws.
That could be a deal killer for the county authority, which would have to agree to assume Jeannette's debt as part of the deal. The authority is considering borrowing another $12 million to pay for state-required upgrades.
The Jeannette Municipal Authority would have to consent to a takeover, with the city approving any sale, according to the Pennsylvania Municipal Authorities Act.
City solicitor Scott Avolio, who represents the county municipal authority, declined comment because he represents both parties.
The Jeannette authority has had problems with storm water mixing with sewage and polluting Brush Creek during heavy rains and has borrowed millions of dollars to pay for upgrades.
The city's sewage system is old.
The authority has borrowed money through the sale of sewer revenue bonds and state loans and grants. It has borrowed $6.7 million through a state program known as PennVEST, according to an authority audit, and has borrowed more than $16 million through bond issues.
In other acquisitions, the county municipal authority agreed to take over other sewage and water authorities and assume the debt without making financial payment.
The county authority now has 125,000 customers in five counties. It purchased the McKeesport and Ligonier Borough systems and sells water to Monroeville and Plum in Allegheny County.
Richard Gazarik is a staff writer for Trib Total Media. He can be reached at 724-830-6292 or at email@example.com.
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