Landlords decry possible BASA sale to Pa. American
Four landlords attended Tuesday’s Butler Area Sewer Authority meeting to share their concern regarding the authority’s potential sale to the Pennsylvania American Water Company.
Shaun Brown, who owns 26 rental properties with 40 units connected to BASA, said Pennsylvania American is a for-profit company that would not appoint municipal leaders to its board, as is the current setup.
Brown, who is the general manager of the Slippery Rock Municipal Authority, said instead of reinvesting in the communities it serves, Pennsylvania American would be beholden to its shareholders.
“Your community loses the ability to control the authority,” he said.
Thomas Rodgers, who owns 32 rental properties in the BASA service area, said his main concern is an increase in rates if Pennsylvania American takes over the authority.
He said he recently read information that said customers saw an average 84% increase in rates when a local authority is taken over by a larger entity.
Rodgers said the current BASA charge per unit is $38 per quarter, and Pennsylvania American’s website shows its average charge is $78.41.
“I’d rather pay that $78.41 to an authority because that money gets reinvested in the community,” he said.
Rodgers said most landlords include the cost of sewer service in a unit’s rent, which will increase if sewer costs go up.
“I don’t pass that (cost) along now,” Rodgers said.
He also is concerned that Pennsylvania American will base sewer charges on water usage in each unit, which would make it tough to decide on a rent amount.
“When we figure our numbers, it’s nice to have fixed costs,” Rodgers said.
He said the sale would benefit Butler City Council because its budget would get a windfall but questions whether Center Township and East Butler, which have no representatives on the BASA board, invested tax dollars in the plant that would benefit Butler in the case of a sale.
Brown said that having perused BASA’s financial situation, he determined that BASA has no fiduciary need to sell the authority.
He hopes BASA does not sell to Pennsylvania American.
“At the end of the day, they are a for-profit company,” Brown said.
Gary Lobaugh, Pennsylvania American Water spokesman, said the company’s rates are regulated and set by the state Public Utilities Commission.
“We work hard to keep our rates down, but we have to balance that objective with the need for significant capital investment to ensure that our systems continue to meet all drinking water and environmental standards,” Lobaugh said.
He said to increase rates, Pennsylvania American must go through a rigorous and lengthy review process that includes consumer protections and involves thousands of pages of evidence, testimony and public input.
Lobaugh said the only profit seen by PUC-regulated water and sewer companies is funding used on return on infrastructure investment.
Lobaugh said Pennsylvania American has invested about $69 million and replaced 37 miles of aging and undersized water mains in Butler County in the past 10 years.
Both Butler and Butler Township have signed confidentiality agreements regarding a sale of BASA.
