The sale of the Butler Area Sewer Authority to Pennsylvania American Water Company (PAWC) has been finalized for a price of $230 million dollars and the guarantee of maintenance upgrades for water lines and facilities.
Tuesday’s announcement comes as the final day to appeal the Commonwealth Court decision passed on Monday. Butler Township and City will split the money from the final sale; both have already made respective plans on how they will spend the sale money.
While the PAWC will be spending over $200 million on the purchase of the facility, they will also spend an additional $75 million to upgrade capital projects and eliminate $49 million of BASA debt.
President of PAWC Justin Ladner was in attendance as the deal was finalized, he says his engineering and operations team have done their due diligence on areas of need but immediate upgrade focuses will be on overflows.
“Sanitary sewer overflows are something we know we want to prioritize with the system especially during rain events where there is a lot of water discharge,” said Ladner. “That contributes to those overflows and our team knows where in the system those are and will prioritize that.”
There is no planned start date for work to begin but over the next five year upgrades will be happening throughout Butler, Center, and Summit townships.
The sale was delayed due to legal challenges by Summit and Center township but Ladner says the PAWC will serve those communities as well as the plan on serving all PAWC customers.
Butler Twp. Commissioner Jim Lokhaiser, Butler City Mayor Bob Dandoy and PA American Water President Justin Ladner.
“We have a responsibility, in terms of being a regulated utility, to serve all of our customers, that’s an individual customer and also a bulk community customer,” said Lednar. “We are gonna honor that duty regardless of previous interactions.”
Although spending will be abundant, wastewater rate increases will not be immediate. A rate freeze will begin on Jan. 1, 2025 for one year, which afterwards PAWC will be able to propose a 1.4 times increase or PAWC’s proposed Rate Zone 1 system-average wastewater rates, whichever is lower. All future rate increases will also be subject to PUC approval which can take up to nine months according to Ladner.
“During that nine months that’s where the process with the commission goes back and forth on what those rates need to be for the true cost of service,” said Ladner. “We have to show all the expenses it takes to serve all the wastewater that we serve, same for water, and they review those expenses.”
In an effort to help with potential rate increases, PAWC will contribute an additional $3.5 million over the next five years for their statewide hardship grant program while also increasing the guidelines. Current federal poverty guidelines are set at 200 percent but PAWC will increase it to 250 percent.
According to Ladner, all 30 current BASA employees were offered their jobs back only one person decided to not join PAWC.
For Butler Bob Dandoy this sale had been a long time coming and he’s excited about what’s to come in the coming months and weeks.
“Now we’re at the part where we get to do the fun things, the things that we were really excited about doing for the city and the township,” said Dandoy. “We’re pretty fired up to get things done and improve things for the people of Butler.”
