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. 

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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. 

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During the early stages, 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 million that need to be completed and BASA’s $46.5 million in debt and other liabilities.    

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After months of ongoing discussions, public meetings, and customer letters, BASA's board of directors voted unanimously on Oct. 11, 2022, to sign an Asset Purchase Agreement (APA) with Pennsylvania American Water to acquire its wastewater system for $231.5 million. The City of Butler and Butler Township officials voted on individual resolutions regarding the sale. On Oct. 13, 2022, the City of Butler officials passed a resolution supporting the acquisition, and on Oct. 17, 2022, Butler Township commissioners also passed a resolution with four in favor and one abstention. However, the acquisition is still subject to approval by the Public Utility Commission, which is ongoing. 

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PAWC's Offer 

According to the terms of the agreement, BASA’s $46.5 million in debt and other liabilities 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.   

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Additionally, BASA customers are guaranteed a one-year rate freeze that would become effective on the anniversary of the sale or by Jan. 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 and obtain approval before it can do that. That process can take anywhere between six and nine months.  

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If the sale is approved by the PUC, 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.   

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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

• 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 Jan. 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 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 thousands of dollars. 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. 

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Our Local Community​

• As part of this agreement, we have ensured that the current operations center will stay intact for 10 years once the sale goes through. 

• Additionally, the proceeds from this proposed sale would go to the City of Butler and Butler Township because they are the sole owners of BASA. 

• The City of Butler and Butler Township intend to use the proceeds on community investment projects that would support area residents. 

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Our Employees

• Under the proposed offer, all employees (union and non-union) would maintain their jobs based on current salaries and collective bargaining agreements. 

• Employees would have access to substantially similar benefits to what they do now (like dental, vision, health insurance and retirement plans). 

• The pensions of retirees will not be impacted by this sale. 

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Our Environment

• As we mentioned, BASA’s infrastructure is aging, and with that comes a burden to meet ever-more-stringent environmental standards and regulations. 

• PAW will assume all necessary permits to operate the systems and assume all Pennsylvania Department of Environmental Protection (DEP) and U.S. Environmental Protection Agency (EPA) consents and orders related to the systems.