City of Beaver Falls Sale of the Wastewater Treatment Plant FAQs
A little over a year ago the Beaver Falls Council began looking into the possibility of selling the Beaver Falls Wastewater Treatment Plant. After a year of research, the City Council of Beaver Falls approved the second reading of Ordinance 4049 - authorizing an asset purchase agreement with Aqua during their September 28th meeting. This agreement will allow the City of Beaver Falls and Aqua to enter into an agreement to sell the Beaver Falls Waste Water Treatment Plant for $41,250,000.
Through further negotiations, Aqua has pledged an additional $1,200,000 in donations. These include a $1,000,000, to a much-needed Fire Ladder Truck (replacing our 25+ year old truck) and $200,000 to the Beaver Falls Carnegie Library to help with their roof replacement project.
Why did City Council vote yes?
We have spent over a year looking into the sale of the Beaver Falls Wastewater Treatment Plant. The bleak outlook on the financial stability of the City of Beaver Falls by the Pennsylvania State Strategic Management Planning Program determined if something is not done the City of Beaver Falls could not meet future financial obligations or budgets and would be facing the possibility of entering into Act 47 (Bankruptcy).
We have an asset that has value but we cannot profit from the operations. Under the Sewer Rental Act, state law prohibits the city because of our ownership of the plant from using profits from operations of the plant for anything other than improvements. However, other municipalities can charge their residents more than what they paid us to treat their wastewater.
We cannot pave streets, buy a new firetruck, or use those monies for anything else. The Wastewater Treatment Plant is debt-free and is currently in good working condition. The future upgrade to the plant to be compliant with DEP will cost the City of Beaver Falls no less than $14,000,000.
How will this affect your rates?
Aqua has agreed to a 3-year price freeze on rates. Private companies like Aqua are under the PUC regulations and, every 5 years Aqua can ask the PUC to do a rate increase. The PUC tends to be very consumer-oriented and requires hearings and Aqua needs to prove why an increase is necessary before any increase is granted. Due to the size of Aqua’s current customer basic they can spread the cost to purchase and any improvements the plant over all their customers, reducing the total cost to just the local customers.
There will be an increase from Aqua in 2025. A household that uses 4,000 gallons per month would pay about $20.00 more. It is important to point out the projections show that, if the City kept the plant, Aqua’s rates and the City’s rates would be the same by 2031.
How will this sale benefit the citizens of Beaver Falls?
5 mill reduction in property taxes:
Starting in 2022, the current council will approve lowing the property tax by 5 Mills. This will help to offset any additional wastewater treatment cost to our citizens. (When is the last time you have heard of a taxing body reducing property taxes?)
What will the money from the sale be used for?
City Council has determined to use the proceeds as follows:
Over ½ of the funds ($25,000,000) be placed into an interest-bearing Trust Account, providing annual income to the City of Beaver Falls producing an estimated $875,000 annually.
Payoff all debt which will save the city $245,000 in interest payments and $600,000 in bond payments annually. This will give the city positive cash follow of over $1,700,000.
Establish the "Beaver Falls Revive" project which will invest in:
Improving the city parks and playgrounds.
Expand recreation program funding.
Removal of blighted buildings in the city.
Update city equipment. (Saving annually on repair bills)
Pension funding, if underfunded
Paving projects and improving infrastructure.
Downtown Streetscape improvements.
This single event is the most positive thing that has ever happened to the City of Beaver Falls and will help us sustain and improve the City for years to come.
If you have any additional questions, please contact the City Manager's Office at (724) 847-2800.