Blair Township Water and Sewer Authority officials see a way out of a recently discovered predicament that had threatened to dissolve their proposed multi-million-dollar sewer project for Reservoir Road, because they cannot spend a critical $2.5 million federal grant for the first phase of the work by a Sept. 30 deadline as planned.

The solution proposed Thursday by consulting engineer Dave Cunningham is less than ideal because it involves a customer rate increase and because it wouldn’t allow a second grant to be used as a match — but it would enable the authority to spend the $2.5 million, so that it’s not lost to the township.

The proposed solution calls for the $2.5 million in American Rescue Plan Act money to go for sewer line projects that need to be done in the vicinity of Penn Farm Estates, while using a combination of capital reserve funds and a local bank loan to do the first phase of the Reservoir Road project — with a previously awarded $3.8 million Community Development Block Grant allocation from a competitive state program for the second phase.

Under Cunningham’s proposal, the supervisors would need to choose one of four combinations of capital funds and borrowed money: If it took $800,000 from capital reserve, the prospective loan would cause a monthly sewer bill increase of $1; if it took $500,000 from capital reserve, the necessary loan would require a rate increase of $2.25; if it took $250,000 from capital reserve, the necessary loan would raise rates by $3.25; and if it took no capital money, the necessary loan would require a monthly increase of $4.

About $500,000 in engineering has already been spent on the project, and can account for that much of the ARPA grant.

The authority recently received permission from a couple of state agencies to spend the ARPA money on its existing sewer problems as an alternative to the Reservoir Road project, based on the ARPA money having been distributed through the Department of Community and Economic Development’s H2O PA program, Cunningham said.

The authority only discovered that it had run into a blind alley with the ARPA money several weeks ago, because Cunningham had been confident that he could get an extension.

He has been involved in perhaps 100 DCED projects before, and never had a problem getting an extension, he told a crowd of about 40 at the special authority meeting.

“I admit I was taken by surprise,” he said. Prior to that, he “hadn’t been terribly concerned” about getting the extension, he said.

Cunningham has tried to get the federal government to make an exception on the ARPA deadline, which is written into the law.

So has U.S. Rep. John Joyce.

But changing it would take a literal act of Congress, officials have said.

Joyce tried a second approach, through the Department of the Treasury, part of the executive branch, but that proved to be a dead end, Cunningham said Thursday.

The project might have been underway in time, except that the state Department of Environmental Protection had unexpectedly required the township to revise its Act 537 sewer plan to include an update on Reservoir Road in 2024, Cunningham said.

Sewer planning that included Reservoir Road had been done in the late 1990s, he said.

When discussion resurfaced in 2018 about Reservoir Road, the DEP said it wasn’t necessary to revisit the issue, Cunningham said.

He assumed that was still the case as the project proceeded.

Then, with a third phase of the Reservoir Road project included in authority plans, and with the hope that that phase would be funded by PENNVEST, which requires a house-to-house analysis for its participation, the DEP called for the Act 537 plans to be updated, Cunningham said.

“We were not necessarily given a reason,” he said. “(But) at that point, we had a whole side rail to go down.”

There followed various revisions and rejections, he said.

The Act 537 plan is still not approved, although it’s close, Cunningham said.

Most if not all meeting attendees Thursday seemed to want the project to be done, with Phase 3 included for at least some of them.

One resident declared her intention of starting a pressure campaign to get the ARPA deadline extended.

If this area were the territory of the House speaker, it wouldn’t be a problem, said board member Ed Silvetti.

There are residents on Reservoir Road who oppose the project, most of whom may have invested recently in an expensive specialty type of on-lot septic system that can function in the poor soils that predominate along the road.

But not doing the project wouldn’t be helpful for anyone, according to officials, including sewage enforcement officer Luke Helsel.

The DEP would force the township to do the project anyway, and meanwhile, would likely coerce him to evaluate the condition of septic systems on that stretch, which could result in orders to fix the problems he finds right away, he said.

In some cases, residents are on holding tanks, which are prohibitively expensive, due to the need to have them pumped frequently, residents said.

To get the project done at a reasonable cost, residents will need to be willing to grant easements, preferably by simply signing over the right for the line to go through their properties, officials said.

If cooperation is lacking, legal costs to handle eminent domain, appraisal costs and compensation for the “takings” could be onerous, officials said.

Given that residents have complained about a lack of communication from the board, the members voted to send out a monthly newsletter, after a motion by Chairman Jacob Wible.

Mirror Staff Writer William Kibler is at 814-949-7038.