The Breakneck Creek Regional Authority. 6/28/22

A confidentiality agreement indicates that Pennsylvania American Water Company has expressed interest in potentially purchasing the Breakneck Creek Regional Authority, which provides sewage treatment to customers in Adams Township, Cranberry Township, Seven Fields, Mars, Valencia, Middlesex Township and Forward Township in Butler County and to Pine Township and Richland Township in Allegheny County.

A confidentiality agreement about the evaluation of Breakneck Creek authority and possible sale, dating to April, has been agreed to by Adams supervisors and Mars Borough Council.

Breakneck Creek authority’s board of five directors was asked to sign the confidentiality agreement, but its members did not sign it.

The first paragraph of the confidentiality agreement confirms the company’s “interest in discussing the potential acquisition of the wastewater system assets of the Breakneck Creek Regional Authority by Pennsylvania American Water Company, using the Act 12 fair market value approach.”

“The Pennsylvania American Water team is constantly talking with local leaders about how we can be a water or wastewater solution provider to their communities,” Gary Lobaugh, the company’s senior manager of government and external affairs for Western Pennsylvania, said in a statement. “We do not confirm or comment on these discussions, as we believe local government leaders should determine the timing and the process.

“We do, however, recognize that our broad footprint, access to capital, and tremendous industry expertise provide us unique opportunities to deliver water and wastewater solutions to communities across the Commonwealth, including the 409 communities that we currently serve.”

Russ Ford, Adams supervisor chairman, maintained that the township is getting both the sewer and water authorities evaluated to determine how much they are worth. He confirmed that he signed a confidentiality agreement.

“We are currently at this point in time evaluating what the assets are worth, both the water authority and the sewage authority,” Ford said. “It’s never been evaluated before, so there is nobody and no evaluation of what these two units are actually worth to the borough and township.”

Michael Fleming of the Mars Borough Council confirmed that some members of the Mars council had signed a confidentiality agreement, but added that there was no decision at this point to sell the authority.

“It’s just an exercise to put, maybe, some relative value to that entity and that investment, but there’s been no decision made to sell it or anything else,” Fleming said, “If we would decide anything like that, then it would have to include plenty of opportunities for the public to engage, but we may never get there.”

Six water company representatives met with representatives from Breakneck Creek authority and Adams on June 21, said Matt Marasco, authority manager, to conduct a site visit and evaluate how much the authority and its sewer facility are worth.

The authority board previously voted against allowing a site visit at a meeting at the end of May, but later decided to allow the visit.

At the site visit meeting, authority officials answered questions from the water company engineer and business development manager, Marasco said.

“(The Pennsylvania American Water Company officials) said that they would take that information back and put it into their model, and get an appraisal number for us,” Marasco said. The board is still waiting on the appraisal number.

The incorporating municipalities for the Breakneck Creek authority are Adams and Mars. Under a 2016 state law, the two municipalities have the authority to sell the assets, explained Breakneck Creek authority solicitor Tom King.

“They are the creators, so they are the originating municipalities,” he said.

Some Breakneck Creek authority board members said they were concerned, if the authority was sold, it would mean rate increases for residents.

“It’s really taking away from the people that have been in this since Day One,” said Harold Kennedy of the authority board.

Currently, the sewer rate at Breakneck Creek authority is $25 per month. The authority serves 9,086 customers across its 10 municipalities.

This story was updated at 12:12 p.m. June 29 to include comments from Michael Fleming of the Mars Borough Council.