Residents voice opposition at public input hearing for MABS sale

SHENANDOAH – In the same room borough officials briefed the community on its plan to sell the water authority more than two years ago, 11 community members gathered to listen to the only public input hearing as regulators consider approving said sale.

Administrative Law Judge Jeffrey Watson presided over the telephonic public input hearing Tuesday night. Watson will provide a recommendation next month to the Public Utilities Commission on whether or not they should approve the sale of the Municipal Authority of the Borough of Shenandoah (MABS) to Aqua Pennsylvania, one of the largest water and wastewater companies in the United States.

About 11 people, many of whom testified under oath, gathered at the Shenandoah Senior Citizens Center on North Market Street while others participated remotely.

Everyone who testified in the 2 1/2 hour hearing Tuesday voiced opposition to the proposed $12.5 Million sale. Common themes included the sale price and the potential sale of water to other water authorities.

“I’m asking PUC to make a good decision and please, stop the sale of the water authority,” Mike Uholik, a lifetime resident of the borough and a former MABS employee, told Watson. Uholik said the municipal authority could find a revenue source in new developments north of town, mainly in the Hazleton area along the Schuylkill County line. He also said he believed, under proper management, the authority could make necessary repairs to its infrastructure.

Uholik also said he believed the purchase price should be double the $12.5 Million figure.

“Everyone in town knows that,” Uholik said. “In the opinion of the town, and myself, you’re probably talking about $25 Million.”

“Shenandoah’s getting taken [advantage of],” Uholik added. “Aqua knows what this land is worth, what the water dams are worth. That’s why they have lawyers.”

Frank Dellinger said that he does not believe the sale would be in the best interest of the customers, having studied the publicly available documents on the sale.

“One of my initial concerns was the proposed sale price,” Dellinger said. “The valuation of the assets that was filed by Aqua was over $25 Million. The estimated value that was given by borough council was in excess of $18 Million. When we’re talking about big numbers like that, I see a discrepancy of $7 Million between the two and I wonder what’s going on there. Though I see that the actual sale price is a good 35% lower than the lowest of those valuations.”

“Without any further knowledge, I look at that and say, ‘Well, how can that be,'” Dellinger added. “I don’t understand how any of the members of council can suggest that a proposal to sell at that price constitutes a faithful execution of their fiduciary responsibilities to the citizens.”

Dellinger also noted that the purchase price will eventually be passed down to the customers. He added that previous longtime MABS employees and administrators said that the cost of future upgrades and repairs “is not nearly as overwhelming as borough council has suggested.”

He also worried about the borough handling the proceeds of the sale, considering the ongoing investigation into missing sewer and trash payments.

Joe R. Boris said that, while rate increases are to be expected, the borough will lose local control of its rate increases in the sale.

Before reading a prepared statement, Boris said he does “not stick my neck out unless it is truthful and benefits the community.”

He noted that a pair of petitions, one to put the sale on the ballot as a referendum, and another for the borough to reconsider the sale, were both rejected by the borough.

Boris echoed Uholik’s testimony, noting that the authority could potentially sell water to the new Niagara plant in Humboldt or the Hazleton City Authority.

“I would say there’s quite a windfall for the MABS system,” Boris said.

Boris also expressed worries that Aqua would charge local volunteer fire companies for water service. Currently, MABS does not charge the five fire companies of the Shenandoah Fire Department, nor does it charge Shenandoah Ambulance, or the William Penn and Shenandoah Heights fire companies in West Mahanoy Township. He pointed out how Aqua plans to meter four fire companies which currently are not metered.

“This is good for our volunteer fire companies, huh” Boris said with a tone of sarcasm. “If it’s metered in that firehouse, they will be responsible for paying the service, or the borough taxpayers will, but to take it away from our volunteer fire companies? How low can we go?”

Donna Gawrylik questioned the sale of the water authority, which has made money for the past several years.

“The borough never put a penny into the water authority,” Gawrylik said. “The customers paid. They paid it all the way.”

She said the authority had rebounded since deficits prior to her time on the authority board.

“Why does somebody want to sell a water authority when you’re making money,” Gawrylik said. “The water is a commodity, which we have, and, as told by the elderly people in this community, they said what Shenandoah has, any community would want to have it. We have so much water, we will not go dry.”

“Who’s to say they won’t take it, they’ll have it, and maybe a week or two down the road, they’ll turn around and put it on the marketplace and sell it,” Gawrylik added. “And you can’t stop them because it’s theirs.”

Gawrylik suggested potentially allowing Aqua to operate the authority, but maintaining borough ownership.

“Let them come in and run the water authority, but let the Shenandoah people keep it, it’s theirs,” Gawrylik said. “Their forefathers built it. It’s not right, what’s happening.”

Bob Cook said the process that has brought the sale forward “hedges on the edges of transparency,” as the borough replaced MABS board members who opposed the sale as their terms expired.

“The fact that they didn’t accept the petitions,” Cook said. “All anybody ever wanted was to put this to a vote to the people, to get the people to come out and make their decision.”

Testifying remotely, Dave Horn, of Edwardsville, representing the Laborers International Union of North America, worried about the impacts on workforce standards the sale could bring, as Aqua is not subject to the same requirements for contract work as a public water system is, he said. His union members, he said, primarily work on highway construction and underground utilities.

At the conclusion of the hearing, Watson emphasized the seriousness of the matter and testimony given.

“We all take this very seriously,” Watson said.

There will be an evidentiary hearing later this week, and Watson will render his recommended decision next month.

The Public Utilities Commission will meet in July and either approve or deny the sale.

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