Hempfield Township supervisors approve sale of sewer system

Hempfield Township supervisors approved a deal Monday that would bring in $35 million cash and get rid of $32.4 million in debt by selling its sewer system to the Municipal Authority of Westmoreland County.

The agreement passed 3-0, with Supervisors Doug Weimer and Jerry Fagert abstaining because they have relatives who work for the affected organizations.

The sale is not final. It needs to be approved by the township authority board at its meeting Tuesday and by the county authority on July 13.

If it goes through, the county authority will pay the township $5 million upfront and $1.5 million a year for the next 20 years. It will assume more than $32 million in debt related to the system.

“I think we can take an asset like that and reinvest back into the township. Every single resident of the township will benefit,” Supervisor George Reese said.

The money would be used to support Hempfield's fire departments and fund major park renovations.

The township sewer system has been hemorrhaging money for years, township Manager Andrew Walz said. It lost $500,000 last year, and three times that the year before, he said.

“We either raise rates or we sell,” Walz said. “It's definitely a testament to this board that they look everywhere that they can to avoid raising taxes.”

None of the township authority's 24 employees will lose their jobs, according to Walz.

The township municipal authority has about $21 million set aside to expand sewer service to areas such as Route 819 and Old Route 30. The county authority guaranteed it would use the money for those allocated projects if the deal is finalized. The authority has also agreed to freeze Hempfield sewer rates through 2019.

Six Hempfield residents addressed the board about the deal before the vote, and five of them thought it was a great idea.

“I think this will be a good move for the township,” resident Nancy Doran said. “I think it's going to bring more economic development to the township, because it will keep our taxes low.”

The sixth speaker, Gary Steib, said he supports the sale in principle but is concerned about the details. He's worried the county authority eventually will try to turn a profit on the unprofitable system by raising rates.

“All you're doing is sneaking through the back door and letting them raise the rates on us after three years,” he said.

The county authority focuses on water sales, with more than 120,000 customers in five counties. It provides water to Hempfield.

In the past few years it has turned its attention to expanding its sewer coverage.

It bought Jeannette's sewer system last year for $23 million — $4 million in cash — and Youngwood's this year for $3 million.

Its acquisitions have doubled its sewer customers to about 10,000. Hempfield's system would add 14,000.

Hempfield and the county authority nearly reached a $57 million deal for the sewer system in 1998. Supervisors voted for to sell it for $7 million, but the township authority board shot the deal down.

Jacob Tierney is a Tribune-Review staff writer. Reach him at 724-836-6646 or jtierney@tribweb.com.