Still no deal between Canonsburg, authority
Canonsburg Borough has offered to extend Canonsburg-Houston Joint Authority’s life for another 50 years, but authority board members aren’t biting just yet.
The sewer authority needs the borough to renew its lease – expiring in 2019 – for its sewage treatment plant, which the authority owns but leases back to the borough. However, during an authority meeting at Canonsburg Hospital Thursday, solicitor Glenn Alterio advised the board to delay a vote on the lease renewal until the board is satisfied with the borough’s financial proposal to float a $30 million bond for overdue expansions of the plant.
“There seemed to be some reluctance on the part of the board to approve the resolution at this time without the other issues being resolved also,” Alterio said.
The borough has offered to refinance the authority’s $4.2 million debt and issue the bond for the expansion project, which could cost about $25 million. Alterio said he received a bond agreement proposal from the borough’s bond counsel this week, but it was essentially the same as the last proposal, which the board rejected because of restrictive language.
“The proposal was no different than the amendment that had been suggested previously, which contained an extension of our life for 30 years, a restriction on our ability to borrow (money) in the future and a restriction on our ability to alter or enter into service agreements,” Alterio said.
Alterio said the borough’s most recent lease renewal proposal is separate from all financial aspects of the proposed bond agreement, which are still in negotiation. If the authority’s lease were extended, the authority could conceivably borrow money without assistance from the borough.
Board member John Bevec, also president of Canonsburg council, asked whether the board intended to finance the plant project in the least expensive way to the ratepayers, by borrowing money from the borough, or to float the bond at a higher rate by taking matters into its own hands.
Alterio said he still is not convinced that Canonsburg floating the bond would be the cheapest route, but he said a decision needs to be made soon because the prolonged negotiations have hurt the authority financially.
“We have lost somewhere between $1.7 (million) and $2 million dollars in cost because the interest rate has now changed in that six-month period,” Alterio said. “The delay has clearly cost us money.”
Contractors’ bids for the plant expansion project were scheduled to be opened Dec. 10, but the board voted Thursday to delay that date to Jan. 14 to allow more time to reach a bond agreement. Board members Mike Alterio, Alan Zofchak and Art Taylor voted for that measure, and Bevec voted against it. Steve Lucas was absent.
The next regular meeting, in addition to a workshop for board members to review engineering proposals for the plant project, will be held at 6:30 p.m. Dec. 19. The location has not been decided.