ATMA open to not existing
A discussion Nov. 22 on refinancing debt led to consideration of whether Antrim Township Municipal Authority should continue to exist as is. ATMA chair Bob Coladonato presented an option mentioned by Public Financial Management, the firm hired to restructure the debt of a 2005 series and a 2006 series bond coming due. Antrim was paying 3.80 and 3.75 percent interest and earning just .25 percent in return on investments.
Coladonato and ATMA manager Brad Graham had met with PFM and bond counsel to discuss the $1.18 million in a restricted account. It could be released in the form of general obligation bonds if the sewer plant, currently owned by ATMA and leased to the township, became the property of the township.
PFM was also looking into a bank loan, Coladonato said, but was not confident ATMA would qualify.
Bob Schemmerling wanted a compelling reason to maintain the arrangement between the two bodies. ATMA was primarily an advisory board, had no staff, could not raise rates, and did not have taxing powers. All of that belonged to the Board of Supervisors, who only considered ATMA recommendations. The authority was responsible for repairs and improvements, and the township for operations and maintenance of the sewer system in the leaseback agreement.
With approximately $2 million of savings with new interest rates factored in, Schemmerling favored turning the system over to the township.
"Either we take it over with true independence, with staff and overhead, or we give it to Antrim. No middle of the road stuff any more," he said.
The board said the freed up money could be applied to capital projects or shorten the debt service of $14.5 million in 2025 by three years.
"It's a fair amount of money," Coladonato said.
Schemmerling, Coladonato, Chad Murray, Rodney Eberly and Elwood Myers wondered if the supervisors would be interested in the change. Graham said he had alerted them to the possibility.
ATMA solicitor Linus Fenicle said one reason to maintain the status quo was that the Board of Supervisors was busy enough governing, and ATMA could focus on sewer.
Schemmerling summarized, "We need to move sooner rather than later because of an uptick in interest rates. There is no fundamental advantage to our structure; at least I can't put my finger on it."
Eberly wanted to make sure they had all relevant information on the effect on operations, not just numbers from a financial advisor. With that caveat, the board unanimously approved asking the township to issue the general obligation bonds.
The board reviewed the preliminary budgets. Revenue for sewer was expected to be $2.5 million, and expenses $2.9 million, with the difference made up from the reserve fund. On the water side, revenue was $216,200 and expenses $166,599, but the payment on debt principal was not included in the chart. Schemmerling asked for the numbers to determine if they would be operating in the red. Graham said the software system hadn't allowed the input. ATMA will call a special meeting if necessary to finalize the budget.
Coladonato suggested they use up to three engineering firms in 2011, rather than just Brinjac. They would pick and choose for each project. Schemmerling saw a positive, in that if they needed a quick visit, they could call a Chambersburg company rather than Harrisburg. The matter will be decided at the reorganizational meeting in January.