Butler approves BASA closing documents
Pennsylvania American Water’s acquisition of the Butler Area Sewer Authority, a process that began in October 2022, took a big step toward final completion on Thursday evening, Oct. 24.
During their meeting that night, Butler city council members agreed to approve the final closing documents related to the sale as well as authorize Mayor Bob Dandoy to sign the documentation to finalize the sale.
“It’s not done, but we’re moving in that direction,” Dandoy said. “We’re preparing for it, getting everything ready to go, so that if everything goes well, we can move forward.”
Dandoy says that the transfer of assets from BASA to Pennsylvania American is expected to begin by Tuesday, Oct. 29, after a special city council meeting Monday morning. Once the sale is finalized, Pennsylvania American will absorb a sewer system that serves an area of 32.5 square miles and nearly 15,000 customers.
According to city solicitor Tom Breth, BASA will still legally exist for some time even after the transfer is completed.
“There are still things that BASA will need to do after the transfer of the assets in order to close out the authority,” Breth said. “There’s still paperwork, collections, accounts receivable, all of those things. … (It will take) around four to 12 months for accounts receivable and other closeout items that they need to complete.”
The sale of BASA to Pennsylvania American Water cleared a major hurdle in late September, when Pennsylvania’s Commonwealth Court threw out an appeal from Center and Summit townships that attempted to block the sale from going through. The two townships, which are also served by BASA, objected to the fact that they were to receive none of the proceeds from the sale, while Butler city and township would split the $230 million evenly after debts and liabilities are settled.
The appeal was thrown out on the grounds that Center and Summit had already agreed not to contest the sale before filing their appeal.
“I just want to say, we're very pleased with the Commonwealth Court reaffirming the decision, and we hope that's the end of it and we're able to move forward,” Dandoy said at a city council meeting Oct. 10.
In addition to Butler city and township and Center and Summit townships, BASA’s footprint also includes East Butler, along with parts of Connoquenessing, Oakland and Penn townships.
On Thursday, city council also approved a motion to strike an entire article of the city’s code which gives BASA the authority to conduct inspections on sanitary sewer systems, as BASA will soon cease to exist as an operating body.
“They were coming up to a point, with the impending closing on the sale, where BASA could not schedule these (inspections) in time,” Dandoy said. “People were calling and saying, ‘Can we get an inspection?’ And they couldn't do it because they would be scheduling it after November when, potentially, it’s not them anymore. It would be PA Water.”
It is not yet known when or how the stricken portion of the code will be replaced, as the city will discuss the matter with Pennsylvania American.
“We're just revoking all of that requirement and letting PA Water decide what they want to do,” Dandoy said.
