Water authorities option agreement on plant sale revealed

PAT FRIDGEN

An option agreement between Antrim Township Municipal Authority and Greencastle Area Franklin County Water Authority is now null and void as far as the Board of Supervisors is concerned. A 4-0 vote on Aug. 9 authorized administrator Brad Graham to notify GAFCWA that the agreement was rescinded. No word was given on if or when negotiations would resume on the sale of the township water system to the borough.

Since the proposed agreement is now history, the Echo Pilot was able to obtain a copy simply dated 2010. It is shared for the citizens who have followed this controversial topic for the last two years, or for anyone curious about what it takes to conduct a deal of such magnitude.

The Option Agreement

The 12-page contract states that ATMA and GAFCWA exist under the Municipality Authorities Act of 1945. The following statements are taken from the proposal.

ATMA currently owns and operates an independent water supply, treatment and distribution system serving certain township residences and commercial properties. GAFCWA is the same, but serves borough and township customers. The Pennsylvania Department of Environmental Protection supports Integrated Water Resources Management through regionalization. The authorities and local governing bodies have determined the sale of the ATMA assets is the best method of accomplishing DEP’s goal. They agree it will improve efficiency of operations, better control costs and provide for expanded water distribution. A combined system will improve responsible development in both the borough and township.

Therefore GAFCWA will pay $15,000 for the option to purchase; it will also put down $50,000 cash; repay ATMA's loan from the repair and improvement fund not to exceed $195,000, associated with the Cedarbrook water tower; and pay the remaining principal and interest ATMA owes Antrim for engineering costs on the 14675 Sherwood Drive water treatment plant improvement project, most recently $20,749.33.

GAFCWA will also take on ATMA's obligation to pay off a PennVest loan of $225,972.12; and will pay the remaining balance of Antrim Township's loan related to the purchase of the water system from Lincoln Utilities, most recently $651,938.11.

The option to purchase would last until 30 days after substantial completion of ATMA's Sherwood water treatment plant improvement project or the issuance of all permits necessary for its operation.

If the option was not exercised according to terms, the agreement would end immediately without notice. Closing was contingent upon many points, including that separate rate systems would be in effect for three years within the combined service area or until the two systems were physically connected, during which time an Act  57 rate capital charges study would be completed; the township supervisors would continue to operate and maintain the water system with its employees; Greencastle borough council would appoint two current members of ATMA to the board for terms of five and four years respectively; after that the supervisors would nominate individuals for vacancies and council would appoint. Whenever the number of township customers exceeded the number of borough customers, GAFCWA and council would consider creating a joint authority. The final contingency was that borough council and the board of supervisors would maintain mandatory water connection ordinances consistent with the changes mandated by PA Act 34 of 2008.

All correspondence on the agreement would be handled by legal counsel: Linus Fenicle from Reager & Adler, Camp Hill, for ATMA; and Jan Sulcove from Black and Davison, Chambersburg, for GAFCWA.

ATMA's assets were the treatment plant, two wells, a water storage tank, a distribution system, accounts receivable, customer lists, associated legal rights, any other ATMA property, and improvements at the plant.

Just one point

The Antrim Township supervisors crafted their final version of the option agreement Dec. 14, 2010. According to the minutes of the Jan. 11, 2011 meeting, Graham presented a summary of GAFCWA's responses to the changes. There was only one remaining issue, the mandatory connection ordinance. "Mr. Graham noted that PA Act 34 of 2008 is the governing law for mandatory connections and there are no provisions for municipal exceptions to it when a mandatory connection ordinance is adopted."

A motion passed that night allowing transfer of Antrim's $651,938 loan, for a list of people who would be exempt from connection until their homes sold to be compiled, and that all involved parties would get one more look at the agreement before it was adopted. However, the next day people who attended the meeting disagreed on what the motion really meant.

When GAFCWA met Jan. 17 it took no action since it had no option agreement in hand.