Author: SPY

Municipal Authority vs "Professional Services" – What's the bottom line?

Shown below is a September 8, 2016 letter from the Columbia Municipal Authority to Columbia Borough Council urging council not to dissolve the authority. The unanimous vote for dissolution subsequently took place at the regular council meeting on September 12. At the time, Council President Kelly Murphy said there was no animosity between the authority and the borough over the decision. According to an LNP article (“Municipal Briefs” 9/21/16), Borough Manager Greg Sahd said the entity was no longer needed because its chief responsibility was to manage the borough’s sewer system. [The wastewater operation was sold to LASA in 2015.] The authority’s letter, however, specifies numerous benefits to the borough in keeping the authority.
At a special meeting on Monday, November 28, 2016, council voted to fund a $75,800 study on the feasibility of converting the borough’s wastewater plant to a facility that would produce natural gas. The authority’s letter appears to assert the authority’s expertise in advising council on just such a venture – at no cost to the borough. 

Shown below is the authority’s October 20, 2016 meeting agenda that includes recent balances. All assets of the authority are to be turned over to the borough.

Residents question wastewater conversion venture

At Monday’s special borough council meeting, residents questioned council’s intent to fund a $75,800 study for conversion of its wastewater plant. Council is looking at converting the plant into a facility for producing natural gas from food waste. [See previous article HERE.] The plant has been idle since the borough sold its wastewater collection system to LASA.

Resident Ron “Ollie” Fritz opposed moving forward with the project, citing the cost of conversion. “It’s going to be an enormous cost,” he said. He asked council to “put a hold” on the project. Fritz read from a 2015 LNP article in which Public Works Director Ron Miller said, “We want to be the first. We like being first…We’ll be the guinea pig.” [Miller said the newspaper quote came from a phone interview with a journalist and implied that his words may not have been accurately reported.]

“I don’t want to be the guinea pig,” Fritz said in response to Miller’s statement. “I can’t see using all this LASA money for a project like this.” [The borough sold its system to LASA for $8.6 million.]

Fritz recalled that when the issue was discussed last year, a 15-year payback on the venture was projected. He urged council to lease the plant instead. Fritz also noted unknowns about the venture. He told council that Miller had said the project could be lucrative, mediocre, or marginal. Council President Kelly Murphy explained that the purpose of the borough moving forward with the study is for risk assessment.

Fritz added that safety concerns exist due to bi-directional, full-speed trains that run past the plant. He noted the lack of even a simple crossbuck at the railroad crossing near the plant entrance and said lighted signals would be expensive: “Norfolk Southern would charge probably a half million dollars to put signals in there. They should be signaled properly.”

Defending the venture, Miller said, “We didn’t want to tear it [the plant] down. We were looking for alternatives.” Estimates currently range from half a million to two million dollars to tear down the plant.

Resident Frank Doutrich asked if council had paperwork verifying demolition costs.  [Council did not have costs estimates available to view.]  Doutrich suggested that council turn the plant over to a private enterprise.

David Nikoloff, principal of AIM Advisors, the organization offering to undertake the study, said, “There’s cost related to any alternative moving forward. We think there’s a lot of promise in this alternative we’re proposing.” He also said tax credits are available for an entity undertaking such a project.