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 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.   

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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.

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PAWC's Offer 

PAWC made a formal offer of $231.5 million to acquire our wastewater management system. 

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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.  

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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. 

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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

• 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.

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Community​

• 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. 

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Environmental 

• PAWC will undertake necessary permits to operate our wastewater systems and adhere to all Pennsylvania Department of Environmental Protection (DEP) consent decrees. 

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Employees

• 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).