Borough prepares ordinance to sell MABS; special meeting to be held
KAYLEE LINDENMUTH / SHENANDOAH SENTINEL - The entrance to the Municipal Authority of the Borough of Shenandoah property in Raven Run on Oct. 1, 2020.
SHENANDOAH – The borough plans to move forward with the sale of the Municipal Authority of the Borough of Shenandoah, and has prepared an ordinance to do so.
A special meeting is expected to be held next week to approve the matter, along with three other ordinances.
If approved, the ordinance will approve the sale of the MABS system — 56 miles of 16″ cast iron transmission and distribution lines and water mains, four reservoirs, two pump houses, four storage tanks, and the filtration plant — to Aqua Pennsylvania, and would authorize and direct the “proper officers” to carry out the sale.
Section six of the proposed ordinance, as provided to the Sentinel, declares that the borough will proceed with the sale with or without the cooperation of MABS and its board of directors.
“It is the desire of the Borough that MABS cooperate with the Borough in connection with all aspects of the sale,” the ordinance reads. “If MABS does not cooperate, the Borough intends contemporaneously to: 1. terminate the existence of MABS, 2. require MABS to convey by appropriate instruments all of the Water System Assets it has any right or title to pursuant to Section 5622(a) of the Municipality Authorities Act, 3. assume all of MABS’ obligations, 4. pay off or otherwise satisfy all debt and other obligations of MABS required to be satisfied under applicable law, and 5. consummate the Sale with Aqua.”
The borough, with the guidance of the Pennsylvania Economy League, has been exploring the possibility of a sale since 2017.
In March, the MABS board retained special counsel to “research, investigate, and commence legal action if warranted against the Borough of Shenandoah… to stop the proposed sale of the Shenandoah water supply, treatment, and distribution system and any other authority assets because the authority has determined that said proposed sale is not in the best interests of the Authority or its customers.”
“The board was not part of a vote to sell the authority, the board was not involved in any meetings,” Attorney Joseph Nahas, MABS solicitor, said at the time. “One of the issues that the board has is that the board members feel that they were not a part of the process, they aren’t comfortable with the way the process has proceeded up to date, and they want to retain a law firm to investigate whether or not the process was correct, how it’s being handled.”
The borough and its advisors contended in a public hearing on the matter that MABS was involved and on board until November of 2019, when communication allegedly broke down.
If approved, the borough will receive $6.5 Million in proceeds after around $5 Million in MABS’ debt is paid off.
Read the proposed ordinance:
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