Allegheny Township officials finds out how much its sewage system is worth: Not enough to interest the county

Allegheny Township supervisors wondered how much the township sewer system would be worth to the Municipal Authority of Westmoreland County.

The answer, at least in their eyes, turned out to be not enough.

At their July meeting, the supervisors voted unanimously to inform the county authority that any interest they had in selling the township’s sewer system went down the drain upon seeing the municipal authority’s “summary offer.”

“We approached them,” Supervisors Chairman Mike Korns said, adding the supervisors made the overture late last year.

Korns said the township has a 25-year management agreement with the Allegheny Township Municipal Authority to operate and oversee the system, and it was past time to renew it.

“We thought it was a good time to do our due diligence and find out what the system, as an asset, is worth,” he said. “It was a good opportunity to inquire, and that’s all it was.”

The municipal authority’s offer came back July 7, and Korns along with fellow Supervisors Ren Steele and Jamie Morabito found it lacking.

Korns said the municipal authority’s offer’s key points were:

• Assuming the Allegheny Township authority’s outstanding debt of $3,010,000 incurred to finance system improvements and expansion.

• Paying the township $529,000, making the entire value of the deal $3.45 million.

• Promising to hire the Allegheny Township authority’s two employees to work at the municipal authority’s office in New Stanton.

• Promising to not raise the sewage rates of Allegheny Township sewer system customers for one year.

“It wasn’t even a formal offer,” Korns said, adding it appeared to be a gateway to open negotiations.

Municipal Authority of Westmoreland County manager Michael Kukura confirmed the financial details of MAWC’s offer.

“It’s a (sewer) system in the county, and we are in the county. They requested we make a proposal, and we responded,” Kukura said.

He said it was unclear if another offer will be made.

“I don’t know if there is room for renegotiation,” Kukura said.

The county municipal authority’s primary business is water. It serves more than 122,000 customers in Westmoreland, Allegheny, Armstrong, Fayette and Indiana counties. It also has about 30,000 sewer customers from systems purchased throughout the region over the past 15 years.

Korns said the township sewage authority also would have had to consent to a sale.

But he, Morabito and Steele concurred that it would not be worth giving up local control or influence over the system and the sewerage rates.

“At that low an offer, we weren’t going to wind up anywhere where we are going to sell that asset,” Korns said.

He said the supervisors must now consider the next step and renewing the local management agreement appears to be the likely move.