New trust account created for BASA retirees
BUTLER TWP — The Butler Area Sewer Authority board of directors voted to create a trust to fund retired employees’ health care if the authority is sold to Pennsylvania American Water.
The Pennsylvania Public Utility Commission approved the $230 million sale of the Butler Area Sewer Authority to Pennsylvania American Water in a 3-2 decision Thursday, Nov. 9. The BASA board of directors voted on several contractual matters to prepare for the closing of the sale, which could be in December, according to Butler Township officials.
Mike Hnath, solicitor for the sewer authority, said at a meeting Tuesday morning, Nov. 14, that the trust would be managed by Butler Township, pending a vote by city council and the township commissioners.
“They are just standard resolutions to adopt the funding, to adopt a plan, to approve the declaration of trust — these are all contingent on the sale,” Hnath said. “In the event that we terminate the authority, there is a provision to transfer all the obligations of the trust to the city and the township. This agreement is on the township’s agenda for sure this month, and I did send a reminder to the (Butler) mayor.”
As part of a sale agreement between BASA and the water company, all union and nonunion employees will retain their jobs with existing salaries while continuing to have access to similar retirement and insurance benefits. Retirees’ pensions will remain unaffected, the news release said.
Duane McKee, executive director of BASA, said that despite the agreement, employees will have to enroll in benefits with their new employer, “just like starting a new job.”
“At the end of December, our health insurance will cancel and will move onto PA American,” McKee said, again adding that the provision is contingent on the sale closing. “At that time, everyone can move their retirement funds over to the PA American program … we create the trust to deal with retirees because PA American didn’t take the retirees on.”
McKee also said at the meeting the BASA board will continue to meet monthly even after the closing of the sale. With Butler and Butler Township officials putting plans in place to dissolve BASA once the sale is complete, the authority has to take steps to close business over the coming months.
“After closing, all the staff is transferred to PA American, but we’ll continue to have meetings to take action on whatever items need to take place,” McKee said. “We anticipate there will be some vendor bills to be paid and some closing of business-type items that need to take place. We’re not sure how long it’ll take before they’re able to dissolve.”
