Attempt to rescind MABS sale approval defeated at Shenandoah council

SHENANDOAH – An 11th-hour attempt to rescind approval of the pending sale of the Municipal Authority of the Borough of Shenandoah failed at Monday night’s council meeting.

The motion came after a lengthy debate during the meeting’s second public comment portion.

Borough Council first approved the sale in a 6-1 vote in November of 2020, agreeing to sell the water authority to Aqua Pennsylvania, one of the largest private water companies in the nation, for $12 Million.

Since then, the sale has waded through bureaucratic red tape as both parties sought the approval of the Pennsylvania Public Utilities Commission.

Several residents have voiced opposition both through the PUC approval process and at borough meetings since, including nearly a dozen at a public input hearing in March, and Monday was no exception.

Charles Vascavage asked Attorney Arlen “Rick” Day, who was filling in for Attorney Jim Amato as solicitor at Monday’s meeting, if the borough could rescind approval of the sale.

“All we ever wanted in this community was to get it on the ballot,” Vascavage said. “We had petitions… the people of Shenandoah do not want to sell it.”

Vascavage also described MABS water as “gold.”

“We have something that two thirds of the world doesn’t have,” Vascavage said.

Borough Manager Tony Sajone told Vascavage that 60% of water treated at the MABS plant near Raven Run “goes right to the sewer plant.”

“It costs between $40 and $50 thousand to treat the water,” Sajone said. “And it costs another $16,000 to pump it to the plant.”

Bob Cook echoed some of Vascavage’s comments, and asked what problem there was keeping the borough from putting the sale on the ballot.

“From the beginning, that has been the one request that has been consistent all along, not necessarily to stop the sale of the water company, but to let the people of the town vote on it,” Cook said.

Cook said the group of residents opposing the sale believed all residents who will be impacted should have had a say and not just Shenandoah Borough Council.

“You guys made the decision for the whole town,” Cook said. “All we want to do is give the town, as a whole, the right to vote on it. You guys took that right away and you have the power to give it back, and you’re not [going to.]”

“We’re less than a month away from the PUC making a ruling,” Cook said.

Cook referenced the termination clause of the asset purchase agreement between Aqua and Shenandoah, saying that either party, for any reason, can back out of the deal without penalty. That, however, is contingent on mutual consent of both Aqua and Shenandoah, government disapproval of the sale, or a material breach of the contract by the other party.

He also asked the borough when bids were opened, and the borough said they would look into it.

Councilman Joe Boris, who was appointed to council in 2022 to fill the remained of the late Eileen Burke’s term, aired his concerns of the sale.

“If you have a house worth, $100,000, he’ll give you $40,000, I’ll give you $50,000, are you going to take it,” Boris asked Cook, who said no, he’d rebid it. “But that’s what they did. That’s the only reason I was fighting, because I thought we were getting screwed because we didn’t get enough money from the deal.”

“Whether you’re pro, or con, I’m not. I’m in the middle as a businessperson,” Boris added.

Boris also raised the concerns about regulator opposition to both Shenandoah keeping a certain amount of revenue from the cell tower lease in Turkey Run for the next ten years and fire companies receiving free water until Aqua’s next rate case.

The state Bureau of Investigation and Enforcement and Office of Consumer Advocate have raised individual concerns about both issues. The OCA has continued to oppose free water for fire companies, including via a filing earlier this month.

“What’s going to happen when [the PUC] meets in July,” Boris asked.

“I know they put things about the fire companies in the agreement. And it made sense,” Boris said. They didn’t want to screw the fire companies, let alone the library is going to pay water, when they were already getting that because the borough cared.”

Boris also suggested selling water to Niagara in Hazleton instead of selling the entire water authority.

“What I’d like to do is let the people decide,” Boris said, raising a motion to rescind approval of the sale and place the sale on the ballot as a referendum, which was seconded by Councilwoman Diane Korenda.

Day interjected, noting that the matter was not on the agenda and would need to be if official action was taken.

“Do the right thing,” Bob Shumski said, urging council to rescind the sale. “Come on.”

After a brief back-and-forth, Boris amended his motion to set a special meeting for next Monday, June 26 to consider rescinding approval of the sale. Korenda, again, seconded.

That motion was defeated by a split vote.

Katie Catizone, James Burke, and William Selbi voted No, while Boris and Korenda voted yes. Leo Pietkiewicz was absent and a vote by John Thomas, who was present via phone, was not recorded.

“All of the ones that voted to sell it, I hope you sleep good at night,” Vascavage said later.

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