The Authority of the Borough of Charleroi (ABC) approved a new rate structure for state-mandated sewage projects that will result in $120 in savings per year for its sewage customers.
The action was taken at the authority’s Nov. 16 meeting.
A number of years ago, the state Department of Environmental Protection ordered the ABC to undertake an approximately $30 million sewage infrastructure upgrade. It was to take place in two phases:
- Phase 1, which was completed this summer, carried a price tag of $17 million.
- Phase 2, scheduled to begin in 2022, will run almost $13 million.
This resulted in sewage customers being assessed a $32 monthly debt service fee they are currently paying, which was scheduled to increase to $38 per month in 2023.
For the past three years, authority management sought ways to reduce the burden of the unfunded mandate by the state on its rate payers.
Earlier this year, the authority finalized funding for Phase 2 with the U.S. Department of Agriculture through a mixture of grants and low-interest loans. With that approval, instead of raising the current overflow fee from $32 to $38 per month beginning in 2023, it will be lowered to $28 per month in 2022, resulting in a $4 per month savings in 2022 and a $10 per month savings from 2023 and moving forward.
The ability to refinance the bond issue for Phase 1 beginning in 2025 offers the prospect of the monthly fee being reduced further in coming years.
“The process of getting the USDA funding was long, competitive, and very challenging, especially due to federal government shutdowns and the COVID-19 pandemic,” said Chuck Cardinale, ABC general manager. “However, with this USDA approval, we will be able to save an estimated $5.97 million in debt service payments over the life of the bonds and loans needed to comply with the DEP order.”
The Charleroi authority provides water and sewer services to the boroughs of Charleroi, North Charleroi, Speers, Twilight and Dunlevy, as well as Fallowfield Township. The authority also provides water service to the boroughs of Donora and Cokeburg, the city of Monessen and portions of Somerset and Rostraver townships.
Also, through the refinancing of two water bonds in 2019 and 2021, ABC has reduced its long-term interest payments on bonds by about $2 million, which will allow for necessary infrastructure improvements.
The authority also completed a private-public partnership with a local corporation, which has permitted additions to its system with little or no cost, while at the same time creating a new revenue stream.