The Cumberland County Utilities Authority is losing its longtime administrator over a controversial proposal to obtain private financing.
Executive Director G. Steve Errickson said he has been excluded from “secret committee meetings,” preventing his input “into important decisions regarding the future of the authority.”
“This has made it impossible for me to continue to do my job and lead the authority into the future,” he said.
PWC has a long and successful history of reliably serving Fayetteville/Cumberland County with strategic, long-term prudent planning as well as partnering in many initiatives that have bettered our community for all.
Pennsylvania’s water industry is drawing more attention from Wall Street, and investors thirsty for income and price appreciation may want to examine water stocks for their portfolio.
There are a few factors at play. Pennsylvania’s Act 12, signed into law in 2016, allows investor-owned utilities to charge ratepayers for the appraised fair-market value of an acquired system, rather than its lower depreciated cost.
The Cumberland County Utilities Authority is on the verge of a sewer deal that would enrich investors in a Louisiana private equity firm but hit sewer ratepayers in Bridgeton, Upper Deerfield, Hopewell, Deerfield and Fairfield with unnecessarily high private sewer rates for years to come.
Several CCUA commissioners met privately with Bernhard Capital Partners, without informing the rest and the CCUA executive director.
With scant notice, they arranged for a BCP presentation at the May meeting, then pushed for issue of a Request for Qualifications. The one issued seems tailored to fit BCP. Its submission deadline is June 15. This deal could be done in less than one month.
The pro-BCP commissioners are trying to remedy a problem that does not exist.
Only a few lawmakers were on hand for a February budget hearing in the palatial chamber of the Pennsylvania House of Representatives. Dennis Davin, the state secretary of community and economic development, appeared remotely on a large monitor, for a second round of questions about the bid for the public Chester Water Authority (CWA) by Aqua, a private water company.
The first round of questions with state Rep. John Lawrence, a testy Chester/Lancaster Republican, did not go well and the secretary’s mood had not improved. Asked to share his department’s view on the sale, Davin claimed that he did not know what it was. Lawrence, irritated, reminded the secretary that he had been trying to get some answers for more than a year. Davin agreed to get back to him, later, with an answer. As Lawrence’s time at the podium wound down, Davin continued his evasive tactics. Finally, Lawrence noted he and his constituents opposed the sale, as did every Democratic and Republican legislator in the counties served by the CWA.
New Jersey American Water announced today it has signed an agreement to acquire the water and wastewater assets of Egg Harbor City, N.J. for $21.8 million. The municipally owned water and wastewater systems serve approximately 1,500 customer connections each, or 3,000 combined, and are being sold through the state’s Water Infrastructure Protection Act process. New Jersey American Water anticipates completing the acquisition in the second half of 2021, following approval from the New Jersey Department of Community Affairs and the New Jersey Board of Public Utilities.
Read the full story at Yahoo News.
New Jersey has a strong tradition of government ownership and operation of water and sewer utilities that is well-worth protecting and preserving because the public benefits.
1. Affordability. The rates of public (government-owned) water and sewer utilities are significantly lower than the rates of investor-owned (corporation-owned) utilities. Rates cover operations and capital investment. There is no additional cost added to cover profit. These distinctions are especially important in communities where many people have low and moderate incomes or in communities that have severe impacts related to the COVID-19 pandemic.
2. Good Management. Well-run government utilities are the norm. Any community can ensure Its system quality by hiring skilled managers and operators and ensuring they have the fiscal resources they need to do their job.
3. Local control. The people of the community, through their mayors other locally elected and appointed officials, have a direct say over the government water or sewer utility.
4. Easy access to Leaders. Government utility governing bodies hold public meetings in the communities they serve. A citizen with a concern can go to any meeting or request any information under public records laws. When corporations and private equity firms are in charge, decisions about rates and service can be made at public utilities commissions in complicated and opaque proceedings, or board rooms that are far away or where the public is not admitted.
5. Local asset. The community owns the local asset not a group of shareholders around the country or around the world who don’t have any incentive to perform well.
6. Local jobs. Utilities that are government owned draw their employees from the town where they operate or nearby towns.
7. The Benefits Go to Ratepayers, Not Shareholders. Economies and efficiencies of operation that save money benefit the ratepayer and not the shareholder. When a government system saves money by saving electricity or replacing old equipment, the ratepayers are the most likely to benefit. The savings can either stabilize rates or can be invested in protecting water quality and keeping the system in shape. In a corporate utility, the savings may be used to increase dividends or support the price of shares.
8. Community Never Has to Buy Back its Own System. Communities that privatize and come to regret it face steep costs to buy back their systems or get out of long-term concession contracts. They are often stuck with expensive or poor-quality service.
9. Government Systems Help Support their Community. Local government culture is one of cooperation – there’s no “proprietary information” or “trade secrets.” Staff, equipment, and funds are often shared informally or through shared service agreements.
10. Government Water and Sewer Service is a Public Service. Water and sewer service is too important to trust to private concerns. Water and sewer service are public goods and should be managed by public servants.
In recent years, municipalities in this state have been selling off their water and sewer systems.
Egg Harbor City will be the first municipality to consider making that move without having to convince residents to vote for it in a referendum.
Two-thirds of the nine-member Common Council will have to agree to the sale.
Bernhard Capital Partners, a private equity firm based in New Orleans, has offered a proposed “concession” arrangement involving the Fayetteville Public Works Commission. Under the agreement, the firm would pay potentially hundreds of millions to the City of Fayetteville for the rights to manage the utility and collect the revenue, for 30 years. The following statement was released on Saturday by the PWC board.
The Fayetteville Public Works Commission, which provides electricity, water and sewer for more than 114,000 people, bills itself as the “hometown utility.”
That would no longer be fully true — at least for the next three decades — if the city of Fayetteville and its utility enter into an agreement with a company out of Baton Rogue, Louisiana.
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