Jan 26, 2019 4 min read

Citing projections in revenue from new tap-ins next year and amid litigation by several municipalities in its service area, the Canonsburg-Houston Joint Authority board scaled back a rate increase before approving it Thursday.

Members of the board voted 5-0 to increase rates by 66 cents per 1,000 gallons this year for the more than 18,000 customers whose sewage is treated at the authority’s five-decade-old plant in Cecil Township.

The move will add $2.64 a month to the average bill.

Back in November, the authority declared plans to enact steeper annual rate increases through 2021. Three of the townships that have service agreements with CHJA – North Strabane, Cecil and Chartiers – and the North Strabane and Cecil municipal authorities brought litigation Jan. 15 to challenge them.

Authority officials cited a change in revenue projections to justify the more modest increase.

Craig Bauer – president of the firm KLH Engineers, which the authority consults – recommended increasing rates by that much based on his analysis of how many new tap-ins the CHJA could expect this year.

“Recent history, the last four years, you’ve been averaging about 270 taps per year,” Bauer said. “In 2018, you had 272 new taps. So we would recommend you adopt the rate utilizing 270 taps for the year of 2019.”

The authority charges a tap fee of $2,178 per “equivalent dwelling unit.”

The November proposal would have brought this year’s rate to $6.97 per 1,000 gallons, and kept increasing them through 2021. Lawyers for the “tributary” municipalities said in a filing that that proposal was based on only fees for 100 new dwelling units a year and accused the CHJA of “understating revenue.”

Instead, the board’s vote brings this year’s rate from $5.76 to $6.42. The rates are already increasing under a 2016 resolution intended to help cover obligations on a $50.3 million bond issue for upgrades to the plant. The rate increase won’t take effect until after the next court date on Feb. 1.

It’s unclear how the new rate could affect the case. The plaintiffs’ lead attorney, Romel Nicholas, couldn’t be reached Friday morning.

Bauer told the board that his analysis shows the new rate will allow the authority to “just barely meet your debt service coverage,” keeping a specified amount in reserve to comply with the terms of the bond issue, plus keep $100,000 surplus to cover unexpected expenses.

Members of the board described the projections as “scary” and “cutting it close” before voting to approve it. Chairman Robert Luksis blamed the litigation.

“If we don’t hit 270, then we’ve got problems,” said Luksis. “That’s what we’re trying to avoid is the problems. And it’s after the fact, we can’t react to the problems, and when we do react to the problems, we’re going to be back in a courtroom.”

Later, he asked business manager Allison Deater to read aloud figures that show the authority spent nearly $93,000 on litigation stemming from CHJA decisions since last year.

Canonsburg and Houston boroughs, which appoint members of the CHJA board, aren’t participating in the litigation.

The board also dropped the law firm Dodaro, Matta & Cambest as its solicitor on Thursday, hiring Santicola, Steele & Fedeles instead. The former continues to represent CHJA in the pending case.

The three townships first brought litigation against CHJA in May, the month after the authority notified them of plans to double rates to help cover $22.3 in new debt for the next phase of plant upgrades the authority started in 2009, plus other projects at the aging plant.

The authority went on to cancel that bond issue because of the court challenge. It rescinded that rate increase in November.

When it proposed the new bond issue, the authority was proposing a modification to the plans to implement a process known as sequencing batch reactors, instead of the biotowers originally called for.

Last week, DEP officials notified CHJA they were denying it permission to change the plans because its application was incomplete and because the three municipalities sent letters opposing the switch.

CHJA instead will pursue the original plans for the upgrades, which were supposed to take five years but are now expected to continue for twice as long. Officials didn’t have figures for how much it will cost yet.

Of the next phase of work, Luksis said, “We’ve lost all of last year, all of ’18, we’re going to lose most of ’19 (on design), so we’re going to have, hopefully, shovels in the ground in the spring of ’20.”