Why the Cambria Somerset Authority decided to raise its water rates for 2024

Beth Ann Miller, The Daily American
·4 min read

JOHNSTOWN ― The Cambria Somerset Authority has approved its 2024 operating budget, which includes a 10% increase in water rates for its customers.

The rate increase is expected to raise an additional $130,000 in revenue next year for the CSA, but at least some of that revenue will go towards paying expected increases for electricity and gasoline in 2024, said James Greco, authority chair.

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"Even though we're getting $130,000 more, our electric rates went up 90%, gasoline's going up; so it's not going to generate $130,000 in extra money," he said. "We tried to adjust the budget for it, but the way inflation is going ..."

After some discussion on the matter, board members voted 5 to 2 Thursday to approve the increase, which goes into effect Jan. 1. Dissenting were Greg Elliott and Somerset County Commissioner Colleen Dawson, while members Patrick Mulcahy, John Toth, Mark Wissinger, Cambria County Commissioner William Smith and Greco voted in favor of the increase. CSA Vice Chair Steve Buncich was absent from the meeting and did not vote.

A sign near the work entrance to the Foustwell Tunnel slip-line project, near Seanor, shows that part of the $2.2 million project has been covered by a $708,640 grant from the U.S. Economic Development Administration.
A sign near the work entrance to the Foustwell Tunnel slip-line project, near Seanor, shows that part of the $2.2 million project has been covered by a $708,640 grant from the U.S. Economic Development Administration.

Balancing customers and the counties

The authority's last water rate increase was in 2018, when rates were raised by 5%; that was the third year of a three-year plan that also increased water rates by 2.5% in 2016 and 2.5% in 2017.

Greco told the board that Cambria County encouraged the CSA to raise rates this year, as a way to continue cutting back on the loan amounts that Cambria and Somerset counties must give to the authority each year.

The revenue the CSA receives from the sale of municipal water is used to pay its operating expenses, while the loans from the two counties are typically used to pay on bonds and a bank loan that the CSA took out to purchase the five reservoirs from Manufacturers Water Co. over 20 years ago.

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"It's a balancing act between trying to keep the county contributions the same, or lower, we're trying to lower them now, (and doing business,)" Greco said. "This is the first raise since 2017 or 2018. I think we were wrong in not doing this sooner."

The 2024 budget includes a loan of $202,685 from each county, according to CSA Operations Manager Rick Ames. Each county's contribution to the CSA has dropped by about $500,000 since 2015 because the authority refinanced its debt on the reservoirs and paid off two PennVEST loans in 2023, Greco said.

The counties are also contributing about $640,000 each in 2023 towards the CSA's Foustwell Tunnel slip-line project, near Seanor. When that work is completed in November, persistent line breaks along the century-old Quemahoning Pipeline to Johnstown should be nearly nonexistent, thereby saving the authority money in emergency repairs and avoiding supply issues with its Johnstown water customers.

As well as reducing the amount of the counties' annual loan to the authority, some of the revenue to be generated by the water rate increase could be used to complete some miscellaneous projects at the five reservoirs that the CSA put on hold because the money wasn't there, Greco said.

"Our goal has always been to get to the point of solvency, but things haven't worked out," he said.

"We're caught in the middle, as a public body. We're just trying to do a balancing act that's fair to our customers and fair to the counties."

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Other business

In other business, a proposal from TranSystems of Ebensburg, the authority's engineering consultant, to provide basic services to the authority at a cost of $29,500 for the calendar year 2024 was approved. This is the same amount the authority paid for the firm's services in 2023, Ames said.

A second proposal from TranSystems for $80,000 for miscellaneous services in 2024 was also approved. Ames said that amount is in line with prior years as well.

Lastly, the authority voted to increase by $100 the monthly rental fee for two houses it owns near the Hinckston and Wilmore reservoirs.

This article originally appeared on The Daily American: Cambria Somerset Authority approves 2024 budget with 10% water rate increase