Shenandoah council agrees to MABS purchase agreement

·5 min read

Jul. 21—SHENANDOAH — The borough council on Monday approved a 57-page agreement to sell the assets of the Municipal Authority of the Borough of Shenandoah to Aqua Pennsylvania Inc.

The "asset purchase agreement" is the latest step in a controversial process to sell the authority to the private company.

Action on the agreement was on the meeting agenda as old business, which allowed the public to comment on it at the start of the meeting. The first came from Councilwoman Eileen Burke, who objected to any vote since the subject was not discussed at the July 12 workshop.

"This was not mentioned at the workshop," Burke said.

"We just got this on Friday," borough Supervisor Anthony Sajone replied.

"Don't you think we should hold it and go over it first and not get it shoved down our throat?" Burke asked.

"This had been approved previously in November 2020, and this asset purchase agreement is the same," borough solicitor James J. Amato said. "Now you're going to vote to execute it and have it signed. And nobody is shoving anything down anyone's throat, Eileen."

The council on Nov. 25 adopted Ordinance 2020-3 to address the sale of the assets to Aqua by a 6-1 vote, with Burke as the lone "no." Approving were Leo Pietkiewicz, William Selbi, Gordon Slater, Katie Catizone, John "J.P." Dombrosky and John "J.T." Thomas. Pietkiewicz is a MABS board member.

At Monday's meeting, the APA was again motioned and seconded by Pietkiewicz and Selbi, respectively, and approved 4-1 by Pietkiewicz, Selbi, Dombrosky and Thomas, with Burke again voting against. Slater and Catizone did not attend. Pietkiewicz and Thomas attended via phone.

Resident Mary Catherine Berresford asked if additional public hearings would be held without Aqua officials in attendance. Amato said there were two required hearings held before the ordinance vote in November and Aqua officials were there to explain the process and answer questions. Amato said residents in attendance were able to give suggestions to the council on how proceeds from the sale could be used in the borough.

Resident Donna Gawrylik, who served on the MABS board as a member and chairwoman, asked about the mention of a "stipend" being paid to the borough as part of the purchase agreement. Amato held the document in his hand and said he did not find the word upon his review.

"You're referring to a stipend, and I don't recall anything about a stipend," Amato said. "I have reviewed this agreement and I have attended all the meetings. If you are referring to some provision, you have to be more specific and I'll be happy to answer that."

"There's not going to be any money exchanged before the sale?" Sajone asked Amato.

"I have never heard of that, that they're going to give us money before the sale," Amato said. "There has never been a reference to a stipend."

Also asking questions was Donna Kulpowicz, the borough tax receiver. She referred to the agreement and when any funds will be obtained by the borough from Aqua.

"When the sale is consumated, that's when the borough receives the money," Amato said.

"So you're saying the borough will not receive any money until the finalization of all transfers of ownership to the purchaser? No monies are going to change hands?" Kulpowicz asked.

"Again, that's not my understanding of the agreement," Amato replied. "Why would they give us money in advance of receiving the assets?"

He said the execution of the purchase agreement begins the process of going through the Public Utilities Commission and other agencies for approval of the sale.

The borough has been working with the Pennsylvania Economy League to improve its financial stability and included MABS as part of a study of its financial and operational status. In May 2019, the council approved advertising for requests for proposals for the authority's assets, but there was no vote to sell the authority at that time.

The borough received several proposals and decided to negotiate with Aqua, which offered $12 million. After paying the MABS' outstanding debt of $5.5 million, the borough would receive the net balance of $6.5 million.

The public hearings were subsequently held to get input on the sale and spending the net profits.

Aqua's service area near Shenandoah includes Girardville and abuts the MABS service area, which includes Shenandoah, most of West Mahanoy Township and a portion of Butler Township.

The authority operates a water treatment/filtration plant near the West Mahanoy Township village of Raven Run, two reservoirs in the township near the plant and two larger reservoirs in Union Township. The distribution system includes approximately 56 miles of 16-inch cast iron transmission and distribution pipes and water mains, two pump houses, one underground pump station and four storage tanks.

Amato was asked after the meeting about the next steps.

"The deal is we sign the contract, we go through the PUC, and they (Aqua) give us $12 million at the end and we pay off all of MABS debt," Amato said.

The PUC is going to take at least six months for its approval, he said.

The borough must also determine what assets MABS has and confirm the amount of debt.

"Also, our next step is to reach out to the union to discuss the MABS employees, what benefits they're going to gain as part of their employment with Aqua," he said. "The narrative that Aqua is just not going to hire anyone is untrue and not happening."

Attorney John G. Dean of the law firm of Elliott Greenleaf & Dean, which was retained by MABS as its special counsel involving the potential sale and to pursue legal action if warranted, was contacted for comment, but a return call was not received as of press time.

Contact the writer: jusalis@republicanherald.com; 570-628-6023

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