Municipal Authority of Westmoreland County buys Hempfield sewer system

Municipal Authority of Westmoreland County's 120,000 water customers will not pay for the multimillion dollar purchase of the Hempfield sewer system, officials said Wednesday after approving the deal.

“This acquisition will pay for itself and be supportive to the bottom line of the authority, which will allow for the continued reinvestment in our valuable infrastructure,” authority board Chairman Randy Roadman said.

Board members of the authority unanimously signed off on the deal that pays Hempfield $35 million — $5 million up front and $1.5 million annually for the next 20 years.

In all, the value of the deal will exceed $88 million, with the authority agreeing to take over more than $32 million in debt accrued by the township authority. Hempfield's authority also will turn over $21 million it has in reserves earmarked for improvement projects on the system.

The authority will begin serving Hempfield's 14,000 customers July 25, though the closing of the sale will not be completed until later this year.

Municipal authority manager Chris Kerr said sewer rates for Hempfield customers will be frozen for three years. Hempfield's 24 sewer system employees will be transferred to the county authority's payroll.

Although the sale price will be financed through money borrowed to pay for about $140 million in capital improvements, officials said the county's water customers will not subsidize the Hempfield purchase.

“The debt (on the purchase price) will be paid for by the elimination of duplicate services,” Kerr said.

Purchase of the Hempfield system is the latest in a series of deals the authority has made to add to its growing sewer business. The authority doubled its sewer customers to more than 10,000 last year through the purchase of systems in Jeannette and Youngwood.

Additional purchases being considered include systems in Ligonier and Derry townships, and the 21,000-customer McKeesport sewer system that recently was put up for sale, Kerr said.

“I think communities are realizing that with requirements and standards constantly increasing, it's harder for them to meet those. They find they can relieve themselves of the burden and get some cash,” Kerr said.

Despite the large cash infusions the authority has made to Hempfield and Jeannette — which received $4 million up front for the sale of its system — the sewer purchases are not viewed by county leaders as municipal bailouts.

Authority officials said the purchases support its goal to be a regional water and sewer provider.

Rich Cholodofsky is a Tribune-Review staff writer. Reach him at 724-830-6293 or rcholodofsky@tribweb.com.