Sewer authority weighs debt options

Last week it was reported that the Jefferson Twp. Sewer Authority hired sewer engineer and rate analyst, Mike Gallagher to determine the fiscal health of the authority and asked that he attends the meetings to discuss his findings.

As was previously reported... the authority faces annual shortfalls of $600,000 per year; it has no reserves, it has barely any money in the bank, and about $16 million worth of debt.

In his report, Gallagher said to the board, "To address your current shortfall you need to do something quick and significant. The only thing that I see is to request a deferral of debt service."

The Villager recently had the opportunity to meet with Jefferson Twp. Sewer Authority Chairman Bill Nicolais to discuss some of the things the authority plans on doing to get back on track:

1. The sewer authority has already sent out letters to both the USDA and to Pennvest, asking each lender to grant them nine months of deferrals (Nicolais called it "forgiveness") on principal payments of each of their loans, asking if they could make interest only payments for those nine months. If granted, that would result in reduced payments of $40,000 per month.

2. After July 4, the authority will hold between 2-3 work sessions in July and another 2-3 in August. These work sessions are open to the public and Nicolais encourages the public to attend and observe. Please note there are no public comment periods at work sessions. That is reserved for the monthly sewer authority meeting. As soon as the dates are made public, they will be printed in the Villager.

3. At the next scheduled sewer authority meeting, Gallagher will present a slide presentation of the report he submitted to the board last month. Nicolais said, "It is our concern to educate the people why the rate increase is an evil must."

4. The authority is already looking at ways to streamline billing, including going to yearly billing with a coupon book system starting in 2014.

5. Nicolais plans on attending the next Jefferson Twp. Supervisor's meeting and plans on publicly asking for the township to forgive the debt of $502,000, to help them obtain the refinancing they need.