It seems the financially doomed Washington Township Municipal Authority will indeed be staying afloat – solely to serve the township with water.
Several months ago, the Washington Township Board of Supervisors voted to disband its sewer authority completely. At the July 26 Washington Township Municipal Authority (WTMA) meeting, it was announced the WTMA would continue to administer the township water operations while the board of supervisors would control the township sewer operations. Previously, it was expected the WTMA would remain in business only until its financial affairs and plant facilities could be conveyed to the board of supervisors.
The supervisors created the WTMA and have the legal authority to appoint members to the sewer authority and to dissolve it. It was deemed necessary by the board of supervisors to disband the WTMA and refinance its $12 million debt because the township is in a much better financial position than the WTMA.
Refinancing of the WTMA debt will save the township $2.7 million over the 30-year course of the loan. The WTMA voted unanimously to amend its articles of incorporation so that various assets and obligations of its sewer system could be transferred to Washington Township. However, the WTMA will remain intact with regard to the township water system.
WTMA Solicitor Dan Becker announced that within the week bonds would be placed so the refinancing could be completed by August 28. Bond Counsel Peter Edelman of Stephens & Lee, Reading, assured the WTMA that the rate for municipal bonds would be sufficient to ensure sufficient savings on the loans. Edelman noted the bond offering documents have been circulated to financial investors.
Becker said, “This will take the sewer authority business and move it under he umbrella of the township, but not until August 28.”
Several residents expressed their chagrin that financially stable Washington Township would assume the debt of its troubled sewer authority.
Leroy Ruhl said, “Turning over the sewer authority to the township is not the right way to go. The authority created the problem. The taxpayer did not sign a note, but the taxpayer ended up with the bill.”
Shelly Haas agreed with Ruhl and wondered why the township agreed to take responsibility for the WTMA debt.
WTMA Chairperson Amy Sutryn explained that discussion concerning the WTMA debt crisis has been continuous for several years. Becker noted a previous board of supervisors had agreed to guarantee the WTMA debt. If the WTMA had defaulted on its loans, the federal bankruptcy court would have appointed a receiver and sewer fees would have been increased tremendously to pay the debt.
Officials hope as sewer connections are sold for new development, the financial obligations and high sewer fees will be greatly reduced.