Canonsburg considers options for sewer authority

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Canonsburg Borough officials will consider issuing a bond to satisfy Canonsburg-Houston Joint Authority’s $4.2 million outstanding debt – a significantly lower price tag than the $30 million bond it originally proposed.

The sewer authority and borough have been negotiating for several months to determine a way to refinance the authority’s debt and pay for expansions to the sewage treatment plant, a project that could cost about $25 million.

Authority members recently tabled an offer from the borough to extend the authority’s lease another 50 years, and a bond agreement has not yet been reached.

Authority members turned down previous proposals, saying the borough’s terms would restrict the authority’s ability to borrow money and alter or enter into service agreements in the future. The board also tabled the lease extension because there was no solid financial plan for the sewage plant project.

The authority owns the plant but leases operations back to the borough, which is in charge of the day-to-day operations of the plant and all employees.

Canonsburg solicitor Patrick Derrico said at a nonlegislative meeting Monday that the borough could “start over again, negotiate and give them what they want” by floating a bond for the authority’s debt. Authority Chairman Michael Alterio said Tuesday that doing so would essentially dissolve the authority unless its lease is renewed.

If that occurs, the borough would have several options, including the potential creation of a new authority.

“I know there’s still been some continuing conversation about the bond issue that the authority is looking to do for the expansion that may come about by next Monday, or it may not, so that’s one option,” Councilman Rich Russo said.

“The other option is paying off the authority’s debt, renewing the authority and creating a new authority, or perhaps taking the operation of our facility in-house.”

Yet another option remains, which would be to sell the authority to the water company – a deal Derrico said could bring $2.5 million to Canonsburg and $1.5 million to Houston, in addition to eliminating the necessity for a $25 million bond.

Derrico said the borough is in discussions with Pennsylvania American Water Co.

Alterio said he was surprised to learn Tuesday that the borough was considering floating a $4.2 million bond and negotiating with the water company.

“The authority has not been in the loop in regards to paying off our debt and the (talks with the) water company,” Alterio said.

“I was not aware that the borough intended to finance the two outstanding issues and pay off the debt for the authority.”

Alterio also said he believed the burden of refinancing the debt would fall on taxpayers because of higher interest rates.

Borough council members said they would likely table a vote on the joint authority’s operating budget unless questions have been answered by the next voting session Monday.

Authority solicitor Glenn Alterio and Houston Borough solicitor Josh Carroll could not be reached for comment Tuesday.

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