May 12, 2014 3 min read

CANONSBURG – For perhaps the first time in the months-long discussion surrounding the Canonsburg-Houston Joint Authority, the authority board and two municipalities involved agreed on a course of action.

During Canonsburg Council’s Monday meeting, officials voted to establish an operating sewer authority independent of both Canonsburg and Houston boroughs by the start of 2016.

Council unanimously approved a memorandum of understanding, drafted by Houston Solicitor Josh Carroll, to extend the authority’s life another 50 years and begin negotiations to change the authority’s structure.

Once changes go into effect, plant workers will be directly employed by the authority rather than by Canonsburg, and the authority will have the power to float bonds to pay off debt.

The proposal to establish an operating authority was revived at a March meeting for local officials to discuss long-overdue upgrades to the sewage-treatment plant. Previous boards considered the plan two years ago, but it failed because of complications with employee contracts. At a previous meeting, Canonsburg Council President John Bevec suggested a time frame of 18 months to allow for the transfer of employees from one contract to another.

Houston Borough approved the memorandum of understanding at a previous meeting, and Houston councilmen at Monday’s meeting seemed pleasantly surprised by the step forward in discussions. Houston Council President Charles Fife signed the document immediately after a vote was taken.

“I’m very happy with what I saw tonight,” authority Solicitor Glenn Alterio said in regards to the MOU. “I think we’ve gone a long way toward resolving the issues and progressing to help all of the boroughs and communities that we service.”

Also at the meeting, a representative from Huntington Bank presented three options for a bond issuance to pay for overdue expansions to the sewage-treatment plant. The authority currently has $4.2 million in debt, and it needs another $25 million to pay for the first phase of plant upgrades mandated by the state Department of Environmental Protection.

The three parties involved discussed the pros and cons of Canonsburg Borough floating the bond versus the authority floating the bond, but a Huntington Bank representative presented another option that had not been discussed. A guaranteed sewer revenue bond could be issued through the authority and backed by both Houston and Canonsburg boroughs – something that was last done in 2005.

According to Huntington Bank, the taxing power of either or both municipalities would be a beneficial asset in the municipal market.

However, the burden of that bond would fall on taxpayers – either Canonsburg residents or both Canonsburg and Houston residents – in the event of a default. If the authority solely floats the bond, the roughly 16,000 ratepayers would be at risk in the event of a default.

Carroll said he prefers the third option, in which the authority would float the bond without assistance from either borough.

“In either of the other scenarios, there would be guarantees by one or both boroughs that would put our taxpayers at risk if there’s a default,” Carroll said. “In the third option, the risk falls on the ratepayers for the entire area, not just each (borough’s residents).”

Further discussions on financing the sewage-treatment plant project will continue at upcoming Canonsburg Council meetings.