CHJA rate increase blocked by judge
A Washington County judge barred an average $2.64-a-month rate increase for Canonsburg-Houston Joint Authority’s thousands of customers from taking effect.
Common Pleas Judge Michael J. Lucas’ 17-page ruling, which he issued Monday, enjoins the increase that the authority’s board unanimously approved Jan. 24 “until further order of the court.” North Strabane, Chartiers and Cecil townships had questioned the basis for it in a legal challenge they filed earlier that same month.
Following testimony from CHJA officials, an investment banker and a water engineering expert during a hearing Feb. 1, the judge found sufficient reason to put the injunction in place at this stage of the ongoing case.
“The tributary communities have not requested that this court impose a timetable for improvements, direct monies to a sinking fund or postpone a rate increase,” Lucas’ opinion reads. “Instead, the tributary communities rightly challenge CHJA’s pattern of ever changing and widely disparate desired rate increases each accompanied by assertions of ‘vital need.’ Such practice prompts the legitimate question ‘are they (CHJA) crying wolf?'”
CHJA’s attorneys weren’t prepared to discuss the ruling on Wednesday.
“We haven’t had a chance to fully review it, and at this point we can’t provide any further comment,” said Garen Fedeles of the firm Santicola, Steele & Fedeles.
Romel Nicholas, the plaintiffs’ lead attorney, didn’t return a message about the decision on Wednesday morning.
CHJA operates a treatment plant in Cecil that handles waste from more than 18,000 customers. The average customer uses about 4,000 gallons a month.
In one leg of the case, CHJA has already agreed to lift a ban on new system tap-ins that it announced in October when it claimed its plant was at capacity – an assertion its own engineers had contradicted in other documents. Lucas previously found the authority had no legal authority to impose the ban.
CHJA’s rates are already increasing through 2021 under a five-year schedule the authority approved in late 2016 to pay debt service on a $50 million bond issue it floated a year earlier.
Along with a reversal of the tap ban, the three towns – plus the local municipal authorities in Cecil and North Strabane – filed the challenge to stop CHJA from raising bills beyond what the existing schedule specifies.
Canonsburg and Houston boroughs – whose elected officials are responsible for appointing CHJA board members – aren’t participating in the lawsuit.
At the time the case was filed, the five-member CHJA board expected to enact a steeper series of increases. In November, it notified customers it expected to raise rates this year from $5.76 to $6.97, with further increases in 2020 and ’21 that would have brought the rate to $7.98 at the end of the three-year period.
That proposal followed the reversal of an April move by CHJA to double customers’ rates that prompted an earlier legal challenge, and Lucas went on to grant a preliminary injunction against the authority, which hadn’t given the other entities the needed 60-day notice for implementing that increase.
The authority had claimed that it needed to levy the $6.19-per-1,000-gallons charge to cover service on a proposed $22.3 million bond issue it planned to use for plant upgrades and other work.
That work included a request to modify a decade-old plan for plant upgrades that the state Department of Environmental Protection ultimately denied. The bond issue was never finalized. CHJA ultimately agreed to call off the April decision after Lucas issued a preliminary injunction stopping it from taking effect.
To justify the latest increase – $5.76 to $6.42 per 1,000 gallons this year – CHJA officials insisted the additional funds reflected the authority’s rising operating and maintenance costs.
Lucas found insufficient evidence to persuade him of that claim at this point.
Instead, he concluded that “whether the rate structure approved by CHJA is reasonably related to the costs of maintaining CHJA’s service is a substantial question that must be resolved.”