Our customers, employees, and communities that we serve are our number one priority.
The Butler Area Sewer Authority (BASA) is currently engaged in a discussion with the Pennsylvania American Water Company (PAWC) to sell its wastewater system. Above all, BASA wants to ensure that this proposed acquisition benefits our customers, employees, and the communities we serve.
A decision to potentially sell our sewer system ensures that:
BASA’s current operations center will be maintained for a minimum of 10 years once the facility is acquired.
PAWC would complete BASA’s list of Capital Cost projects and upgrades that total more than $75 million and PAWC commits to use Butler Area contractors for the work.
BASA’s current debt of $49 million will be eliminated using the proceeds from the sale.
All BASA employees are guaranteed their jobs at the same salaries and will have access to substantially similar retirement/pension and insurance benefits.
Highest-level of environmental regulations will be adhered to.
Public transparency for customers.
As the sole owners of BASA, the City of Butler and Butler Township would use proceeds obtained from the acquisition towards projects that will benefit residents in the local area.
Our Commitment to the Community
The Butler Area Sewer Authority (BASA) has been providing wastewater services to several communities in our region for more than 70 years. Currently, we serve 14,655 customers over 32.5 square miles, including residents and places of business.
We have been presented with a $231.5 million offer from the Pennsylvania American Water Company to acquire our wastewater system. Before making any final decisions, we want to hear from local customers and get their thoughts and perspectives on this matter.
That is why we will be hosting a series of open houses, which will be held on September 27 and 29. These open houses will afford us the opportunity to hear directly from our customers and answer their questions. Our commitment to our customers, employees, and local communities remains steadfast. We know that this proposed acquisition will impact them, and they continue to remain our priority.
History of BASA
Under the Municipalities Authorities Act, the City of Butler and Butler Township incorporated the Butler Area Sewer Authority on November 3, 1962. The purpose of this authority was to serve both municipalities, connect the collection sewers, and enlarge and expand the sewage treatment plant.
While the City of Butler and Butler Township solely own BASA, the authority also provides services to six other municipalities including Center Township, East Butler Borough, parts of Connoquenessing Borough, Summit, and Oakland townships, and a small portion of Penn Township.
BASA began providing services to these municipalities at various points in time over the years. Specifically, Center Township, East Butler Borough, and Summit Township in 1974, Oakland Township in 1994, parts of Connoquenessing Borough in 1995, and Penn Township in 2003.
Information on Potential Acquisition
In December 2021, BASA’s board of directors entered into an exclusivity agreement with the Pennsylvania American Water Company (PAWC) to discuss a proposed acquisition of our wastewater system.
BASA had a fiduciary responsibility and economic obligation to the communities it serves to thoroughly assess its aging infrastructure, outstanding debt, and what future projects would need to be undertaken just to keep the facility operational.
During the past months, it was important for BASA to deal with PAWC under a confidentiality agreement. This enabled BASA’s officials to determine what type of offer from PAWC would benefit the communities it serves. Specifically, two areas of focus for us have been the Capital Cost projects totaling $75,815,000 that need to be completed and BASA’s $49 million debt.
After months of ongoing discussions, BASA received an offer from PAWC and agreed to an Asset Purchase Agreement. This procedural step enables BASA to present PAWC’s offer to the public. BASA officials have not voted yet on a final decision to sell.
PAWC made a formal offer of $231.5 million to acquire our wastewater management system.
According to PAWC’s offer, BASA’s debt of $49 million will be eliminated utilizing the proceeds of the sale. PAWC has guaranteed job security for all 34 BASA employees, and it will maintain the existing operations center for a minimum of 10 years. Additionally, PAWC will complete the list of Capital Cost projects, and carry out extensive and much-needed repairs to the facility.
As part of the proposed offer, BASA customers are guaranteed a one-year rate freeze that would become effective on the anniversary of the sale or by January 1, 2025. Currently, BASA can unilaterally raise rates at any time without needing approval from a governing agency. If PAWC wants to raise rates on customers, by law, it must petition the Public Utility Commission (PUC) and obtain approval before it can do that. That process can take anywhere between six and nine months.
If completed, the City of Butler and Butler Township—because they are the sole owners of BASA—will receive proceeds from the sale. While no final decisions have been made yet, a planning process is underway. Officials from the City of Butler and Butler Township would use proceeds obtained from the acquisition towards community projects that will benefit residents in the local area. Specifically, City of Butler and Butler Township officials want to hear directly from residents on what projects they would most benefit from.
Reasons Why We Are Reviewing This Offer
BASA has infrastructure challenges that will require considerable financial investment to maintain the current system for our customers. Our communities are currently being serviced by an aging and declining wastewater system that needs major and expensive repairs. Private companies like PAWC can maintain and conduct upgrades in a more efficient and effective manner as its statewide network enables them to spread out costs among their large ratepayer base. Specifically, aging laterals are another important issue for our customers that will be alleviated should this deal go through. Currently, if a BASA customer’s laterals need to be replaced or repaired, the customer is required to foot the bill. On average, lateral replacements can cost customers $8,500. As part of the agreement, PAWC will petition the PUC within two years of closing to request approval to initiate a pilot program that will replace or repair customers’ laterals (the pipes that connect homes and businesses to the public sewers to address the stormwater inflow). BASA customers have already experienced costly headaches caused by aging laterals that have failed and damaged their properties. If PAWC acquires BASA and the PUC approves the pilot program, it will spread out the costs of these lateral projects and individual customers will not have to face the burden of spending thousands of dollars.
Impact on the Community
Customers will be guaranteed a minimum one-year rate freeze that would take effect upon closing until the later of the one-year anniversary of the closing or January 1, 2025. BASA’s rates are well-below many other sewer authorities across Pennsylvania and have remained arbitrarily low for years. Because of the operational needs that BASA’s facility currently requires, it will implement a rate increase of $2.50 dollars prior to or on the day the acquisition is finalized. This rate increase is taking place regardless of whether the acquisition occurs because of the extensive upgrades and repairs that BASA’s facility needs. Once this acquisition is finalized, PAWC has guaranteed customers a minimum one-year rate freeze. Currently, BASA can unilaterally raise rates at any time without needing approval from an outside governing agency. If PAWC wants to raise rates on any customers in the future, by law, it must petition the Public Utility Commission (PUC) and obtain approval to allow rates to be raised—a process that takes approximately nine months.
This will result in a transition from a flat rate fee to a metered rate, meaning customers would only be charged for the wastewater services they use.
Additionally, low-income residents will have access to PAWC’s grant programs that will help them pay bills.
PAWC will petition the PUC to request approval to initiate a pilot program that will replace or repair customers’ laterals to address stormwater inflow (lateral pipes are the pipes that connect homes and businesses to the public sewers). BASA customers have already experienced costly headaches caused by aging laterals that have failed and damaged their properties. Currently, if a BASA customer’s laterals need to be replaced or repaired, the customer is required to foot the bill. On average, lateral replacements can cost customers $8,500. If PAWC acquires BASA and the PUC approves the pilot program, it will spread out the costs of these lateral projects and individual customers will not have to face the burden of spending thousands of dollars.
As the sole owners of BASA, the City of Butler and Butler Township will receive proceeds.
While no final decisions have been made yet, a planning process is underway. Officials from the City of Butler and Butler Township would use these proceeds towards projects that benefit residents in the local area.
PAWC will undertake necessary permits to operate our wastewater systems and adhere to all Pennsylvania Department of Environmental Protection (DEP) consent decrees.
All of our employees (union and non-union) will retain their jobs based on current salaries and collective bargaining agreements.
Employees will have access to substantially similar retirement/pension plans and benefits (like health, dental, and vision insurance).
City of Butler
Tuesday, September 27, 2022
10 am – Noon
6 pm – 8 pm
St. Peter's Social Hall
127 Franklin St
Butler, PA 16001
Thursday, September 29, 2022
10 am – Noon
6 pm – 8 pm
290 S Duffy Rd
Butler, PA 16001
What Others Are Saying
According to the American Society of Civil Engineers (ASCE) latest infrastructure report card, Pennsylvania’s wastewater systems was given a D—.
“Aging wastewater management systems discharge billions of gallons of raw sewage into Pennsylvania’s surface waters each year. The average age of most sewer systems is approaching 70 years with many having pipes over 100 years old. 1.6 million homes in PA are served by on-lot systems with failure rates of nearly 20%. Half of the State’s Sewage Facilities Plans are over 20 years old. It is estimated that the Commonwealth has a funding gap of $8.4 billion over the next 10 years to repair existing systems, upgrade existing systems to meet regulatory requirements, control Combined Sewer Overflows, address illicit Sanitary Sewer Overflows, and construct new or expand existing systems to meet increasing demands. Available funding over that time is estimated to be $900 million, approximately 10% of the required annual investment.”
Jordan Grady, President of the Butler County Chamber of Commerce, called the potential sale of the authority to PAWC:
“A great opportunity for our community.” “Not only has Pennsylvania American showed a commitment to make necessary upgrades for the betterment of its customers for 100-plus years, it has a long history of making charitable contributions to various organizations that provide vital services,” Grady said. He said he trusts the commissioners in Butler Township and council members in Butler to properly invest the funds so that they make “profound impacts on the community as a whole.” “The potential sale has the opportunity to be a true win-win for the area,” Grady said.
- Butler Eagle, 8/24/22
Brian White, Superintendent, Butler Area School District said:
“One thing that does strike me is so many communities are going through (increases) because of mandated upgrades from the federal government,” White said. “As an entity that deals with a lot of unfunded mandates, it’s tough.” Still, White said he is not sure BASA has the resources to perform the many upgrades that are needed throughout the sewer system. “They might have to raise rates as much as any entity would (to complete upgrades),” White said.
- Butler Eagle, 8/24/22
Local business owner, Joe Gray of Arris Construction said:
“I am highly in favor of this sale. I think it will be an improvement for everyone,” Gray said. “The way the system is run and the service provided, I believe, will be better.” He said the authority has eschewed rate increases over the years that would have paid for infrastructure upgrades to maintain the system and lines. Now, Gray said, the state Department of Environmental Protection has mandated the system make expensive upgrades without providing any funds to make the repairs. “Regardless of whether the system sells or not, the rates are going up,” he said.
- Butler Eagle, 8/24/22
BASA Governing Board of Directors
Paul F. Sybert, Chairman
Fred M. Vero, Vice Chairman
Mavrik W. Goepfert, Treasurer
Lance R. Calvert, Secretary
Steven C. Braden, Assistant Secretary and Treasurer
City of Butler
Mayor Bob Dandoy
Council Member Daniel G. Herr
Council Member Donald L. Shearer
Council Member Larry W. Christy
Council Member Frederick W. Reese
Commissioner Dave Zarnick, President
Commissioner Sam Zurzolo, Vice President
Commissioner Joseph A. Wiest
Commissioner James Lokhaiser, Jr.
Commissioner Edward Natali