Antrim boards at odds on sewer lease agreement

A piece of paper stands between the Antrim Township Board of Supervisors and Antrim Township Municipal Authority. The two bodies have discussed changes to a sewer lease agreement since September. Back in the spring of 2011, a contract was revamped after ATMA refinanced its bonds. The regular agreement was changed to a simple lease agreement at that time, but in the following months some tweaks were determined to be necessary.

The supervisors submitted changes on repaying the capital additions debt to the landfill fund, paying for auditor expenses, altering the fiscal year, deciding what percent of some employee salaries came from operating expenses, and letting the township keep money in its sewer revenue account if needed for operating expenses rather than transferring to a capital improvement fund.

The latter point is the cause of dissent today.

The governing agencies are at odds, but linked to municipal sewer service for residents because ATMA owns the system and leases it to Antrim. ATMA generates revenue through its Repair and Improvement Fund, charged to developers starting new projects. This fund has been stagnant during the recession. Antrim collects tapping and usage fees from commercial and residential customers and puts the money in its sewer fund. It is responsible for operations and maintenance of the sewer system.

By the book

Historically, when the sewer system needed upgrading, ATMA financed it by obtaining money through loans or bonds. If it borrowed from Antrim or used the township as backing for a bond, the supervisors had to approve the project. Currently ATMA is the defendant in the Ronca litigation (see separate story), but Antrim approved that sewer line extension.

Since ATMA has no solid source of income, and Antrim has a steady flow, authority members Rodney Eberly, Bob Schemmerling, Chad Murray and  Elwood Myers want Antrim to take on the responsibility of paying for sewer system improvements. Then there would be no need for an ATMA capital additions fund, since Antrim could use revenue from its sewer fund. The four are concerned that excess money would not truly be turned over to ATMA, so why should they handle the big ticket items?

The supervisors, particularly Fred Young III, Pat Heraty, James Byers and John Alleman, want ATMA to keep its duty, with the new fund established and the extra money put into it at the end of each year. They think the system has worked well to date. Antrim administrator Brad Graham has said the intent is not for Antrim to sit on the money, but just to keep enough to be prepared for operation and maintenance emergencies. Some years there is $400,000 left over. The next use of the money will be for upgraded sewer lines along Hykes Road.

Rick Baer, who sits on both boards, has not been vocal about which direction to take. "I got it coming and going," he said at the Feb. 28 supervisor meeting.

Schemmerling has been adamant that the paperwork reflect what happens in reality. While the revised agreement is ready to be signed, with Antrim assuming responsibility for capital projects, he doubted it would mean anything since township solicitor John Lisko advised Antrim not to accept  that role. At the Feb. 27 ATMA meeting Schemmerling asked Baer what the supervisors were thinking about the clause, but Baer responded he had been too busy to find out.

"Once everything was rosy about this," said Eberly, referring to a joint meeting Jan. 30. "'Yep, we're gonna do this.' Lisko stopped the process. That's his job."

Eberly saw faults in the current set-up. The sewer plant has non-working meters which were not replaced promptly. The employees work for Antrim Township.

"If ATMA stood alone," he said, "and my employees were working with two meters that don't work, I would have caught that within months."

He saw the problem as the supervisors needing recommendations from ATMA to buy new meters, but ATMA didn't talk to employees, who were under the umbrella of Antrim.

"Someone has to tell them how to run the plant. More and more things are falling through gaps."

Schemmerling added that the supervisors didn't always follow recommendations either, so he wanted the lease agreement to reflect their actual role in taking care of the properties.

"It's the paper that counts, that sets the rules," he said. "It's like a good employee manual. Any good business has to have a guide and documentation."

Supervisors differ

The supervisors stated at the joint meeting that they wanted ATMA to have more authority, but it couldn't stand alone financially. Young acknowledged that was contradictory, but he wanted the capital additions fund assigned to ATMA in the revised lease agreement. He and Byers agreed the process worked and the supervisors did respond to requests.

Heraty said, "We want to get out of the sewer business. This agreement would have us assume more responsibility." The proposed changes would move both sides farther away from a stand-alone entity, he added.

Schemmerling, a visitor at the supervisor meeting, said he had heard different terms for the future plans of his board, that ATMA would someday be independent, joint or combined. Young clarified the goal was for the authority to be operated separate from Antrim Township.

Schemmerling persisted, since ATMA never had a capital account, never funded or transferred money into one, and had no way to budget for projects as it had no real income. He pointed out sludge drying bins on hold, and repairing sewer lines.

Lisko commented that ATMA's debt to Antrim would be paid off in about 18 months. On the books, Antrim pays itself back from the sewer fund since it is collecting the revenue.

Graham, who is also ATMA manager, said how the deal shakes out is irrelevant to citizens.

"It doesn't cost anybody any more. It's just where does the money go."

The sewer lease agreement is valid until May 1, 2020.