Water agency seeks auction alternative
The Altoona Water Authority next week will present a proposal in answer to City Council’s controversial plan for the long-term lease of the water and sewer systems operated by the authority in exchange for a big upfront payment.
The authority declined to provide details, saying they’ll come out when authority member Tom Martin – a former city mayor – presents the proposal at Wednesday’s council meeting.
Clearly, though, the authority plan would keep the systems under local control, which could be lost if a nonlocal company succeeds in obtaining a lease – although council plans to maintain indirect control through lease agreement rate restrictions and standards for quality and service.
The authority – which didn’t formally vote on the matter – may have provided a hint about the nature of its proposal in an agenda reference Thursday, calling it a “restated cooperation agreement between AWA and the city.”
Under the current AWA-city agreement, the authority pays the city $2.9 million a year for a variety of “services.”
The parties worked out the basic outlines of the deal about 10 years ago, after the city, led by then-Mayor Martin, threatened to sell the systems to a private operator.
In response to that threat, the authority pumped up community opposition, after which the parties worked out a $2.1 million per year increase to the authority’s annual services payment.
If the authority’s new proposal includes an arbitrary further increase, it could create a legal problem, as a 2012 revision to the Municipality Authorities Act prohibits an authority’s money from being used for anything other than services or projects directly related to the authority’s mission or purpose.
That may be moot, for now, however, as City Council’s consensus seems to be to follow through on the auction, no matter what.
“My understanding is we are going the full length and distance, to see what [the systems are] worth,” Councilman Mike Haire said Thursday. “[Otherwise] we might be selling ourselves short.”
The systems could fetch between $180 and $240 million, city consultant Griffin Financial Group has estimated.
“You can’t know what something’s worth without someone telling you what they’re willing to pay,” Haire said.
Still, council would likely encourage the authority to participate, predicted Interim City Manager Peter Marshall.
“They’re more than welcome,” Haire said.
Council wants the big upfront payment to help it get out of the state’s Act 47 distressed municipality program, members have said.
City officials declared their intention to go through with the auction as recently as a week ago, when Altoona Blair County Development Corp. proposed its own version of a systems takeover that would provide the city with the money it wants, while maintaining community control.
The authority and ABCD mutually support their respective resolutions, according to officials.
Asked for the legal justification for withholding details of the authority plan, solicitor Alan Krier said it will probably be “tweaked” before Wednesday.
“I’m not exactly sure what I want to say [to council],” Martin said.
A former English teacher, Martin cited Mark Twain, who said “the difference between the almost right word and the right word is really a large matter – ’tis the difference between the lightning bug and the lightning.”
The authority announced its intention to propose its own plan to council after an executive session Thursday.
After a previous executive session on the lease issue, Krier mentioned potential legal questions.
Asked about the scarcity of plan detail and the authority’s resorting to executive sessions to discuss its proposal, Pennsylvania Newspaper Association media lawyer Melissa Melewsky cited the state’s Sunshine Law and suggested the authority ought “to be more forthcoming.”
Mirror Staff Writer William Kibler is at 949-7038.