Water authority unveils alternative

The Altoona Water Authority on Wednesday detailed to City Council its alternative to council’s plan to shop the Altoona water and sewer systems to a long-term lesee in exchange for a large, upfront payment to help the city get out of Act 47 financial distress.

The alternate plan calls for bolstering the authority’s annual payment to the city for services and an authority takeover of funding responsibility for the city stormwater system – while pointing out what the authority says is the likely passage of a law that will allow the city to triple its local services tax to $156 a year – generating up to $7 million annually, enough to exit Act 47, according to the authority.

Council didn’t respond directly to authority member – and former city mayor – Tom Martin’s presentation of the proposal, and during media questioning were silent when the Mirror asked whether council intended to proceed with the system auction, which a consultant predicted would fetch between $180 and $240 million.

“Right now, we’re committed to stay on (course),” Mayor Matt Pacifico said after the meeting. “We haven’t discussed anything that would change that.”

The authority plan called for increasing the authority’s current annual payment of $2.9 million by $250,000, adding an annual inflation escalator and adding a clause to compensate the city for the fully allocated costs of degradation done by the authority’s many street cuts.

The changes to the authority’s annual payment should not violate Act 73, a state law designed to keep municipalities from raiding their authorities for money, according to the authority presentation.

The takeover of responsibility for funding stormwater costs, based on a recently approved state law, would allow the authority to operate the city stormwater system as a utility. The authority could assess property owners based on impervious acreage, then on the funding, easing the current burden on the city’s general fund for handling the stormwater system, in imitation of a recent change in Ebensburg, officials said.

The method could ultimately be the way to pay for separating the city’s combined sewers into separate storm and sanitary lines, if required, officials said.

The General Assembly legislation that would enable the increase in local services tax is likely to be passed this fall in the state Senate, according to the authority presentation.

A little financial trouble should not be the reason to give up control of “this tremendous asset,” Martin said, adding that he didn’t intend to minimize the gravity of the city’s financial trouble.

It’s unlikely that if a company with headquarters in Pittsburgh, Philadelphia or New York City gains control of the systems that its leaders would care for the city like the authority members do, Martin said – using the often-criticized authority headquarters building, dubbed the “Taj Mahal,” as a positive example, for having fulfilled the authority’s hopes that it would become a catalyst for revitalization of the northern downtown.

Martin questioned the independence of the consultant advising the city on the auction arrangements, pointing out that the firm stands to make money on the deal.

He also pointed out that a recent Mirror poll showed a large majority of respondents favor keeping the status quo.

And he warned that if it comes to auction bids for the system, the city might be legally obligated to take the highest one.

“It’s possible there would be no turning back,” he said.

Council has said it wants to proceed with the auction to learn the true value of the systems, but “in the hearts and minds” of city residents, the value of the systems is “priceless,” Martin said.

About 45 authority employees attended the meeting in support of the alternative proposal, and many clapped when Martin finished his presentation.

An upfront payment isn’t the only way to get out of Act 47, according to the authority’s written proposal.

“A steady, reliable annual income stream will more than accomplish this purpose,” the proposal stated.

“Haste should not be the watchword,” stated the proposal. “Where the matter involves giving up operational control … the watchword should be deliberation.”

Mirror Staff Writer William Kibler is at 949-7038.