Sewage expansion, trail project on hold in Derry Township
A project to extend sewage service to Keystone State Park and 33 nearby residences is temporarily on hold as the Derry Township Municipal Authority looks for a way to make it affordable for customers.
In January, the municipal authority received a $1.8 million low-interest loan from the Pennsylvania Infrastructure Investment Authority, or PennVEST, to construct a sewage line from the state park to the New Alexandria treatment plant.
The state park’s own sewage treatment facility, at 60 years old, is considered obsolete and would be replaced. The project also would incorporate residential properties on Oasis and Lower Flowers roads currently served by on-lot septic systems.
The municipal authority had hoped to receive a grant as part of the funding package, but instead received a 20-year loan at a 1% interest rate for the first five years and a 1.74% interest rate for the balance of the term.
Estimated debt service on the PennVEST loan would require monthly payments of up to $104 on the part of the new customers, said Carol Henderson, municipal authority manager.
“No one will be asked to pay that,” Henderson said. “The (municipal authority) board does not want that to happen, so they’re looking at other options.”
Among the options being considered is spreading the burden for paying off the loan among all the customers served by the municipal authority — not just those who will newly be brought onto the system, she said.
Henderson said the board would like to keep the debt service to rate payers at or below $60 a month.
“The board is still reviewing the feasibility of going through with the project, understanding that it could be an undue burden on the rate payers,” she said. “Because of the small amount of customers in the initial piece of the project, it could be financially untenable.”
The project has a total of 58 equivalent dwelling units, 33 of which are homes and 25 of which belong to Keystone State Park, she said. The state park’s portion of the debt service would come out of its budget.
Total cost of the project is $2.6 million, including $474,000 in matching funds from the municipal authority.
The inability to come up with an affordable debt service plan has put the project on hold indefinitely. Construction was originally expected to begin this summer, but no contracts have been awarded to date.
The municipal authority has 30 to 60 days to come up with a plan and until November to close on the loan. The board’s next meeting is scheduled for 5:30 p.m. June 26 at the municipal authority office, 5760 Route 982, New Derry.
Uncertainty over the sewage treatment project throws into doubt a proposal to use the sewer line right-of-way to build the Loyalhanna Trail, a 3.8-mile bike and pedestrian trail between Keystone State Park and New Alexandria.
The trail would serve as the “pivot point” for a new trail network in north central Westmoreland County, including the proposed Loyalhanna Lake Trail to the north and the partially constructed Little Crabtree Creek Trail to the southwest.
Construction of the trail is 100% funded but is contingent on the installation of the sewage line.
“The state has put in $2 million in grant money alone toward this (trail) project, so the state obviously feels strongly about it,” Henderson said. “We all understand that this is a great project, so we all are trying to find a way to make it work.”
Stephen Huba is a Tribune-Review staff writer. You can contact Stephen at 724-850-1280, [email protected] or via Twitter .