Tube City Almanac

January 03, 2013

Host Fee Challenge Worries Council President

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North Versailles Township commissioners are considering a legal challenge to a "host fee" imposed on McKeesport's sewerage authority by the city of McKeesport.

According to a story by Anne Cloonan in the Post-Gazette, township commissioners last month authorized solicitor Greg Evashavik to work with Jack Cambest, attorney for North Versailles' sanitary authority, to work on a potential court challenge to the $1 million host fee approved in December by McKeesport city council.

City officials have said the host fee was designed to reimburse McKeesport taxpayers for expenses incurred on behalf of the Municipal Authority of the City of McKeesport, as well as for the lost tax revenues caused by expansion of the sewerage authority's 10th Ward treatment plant and associated lines.

Losing the $1 million host fee would take a substantial bite from the city's $17 million budget. Besides McKeesport and North Versailles, the city's sewage treatment plant also treats wastewater from communities such as Port Vue, Liberty and Lincoln, and will soon be connected to Elizabeth Township as well.

"There have been increases in their rates, and they're very upset, and I can understand why," City Council President Darryl Segina said Wednesday. He voted against the host fee and has been its most outspoken critic. "I think the administration should have some sort of a backup plan," Segina said.

. . .

According to both authorities' respective websites, customers of McKeesport's sewerage authority beginning in 2011 paid $10.55 for each 1,000 gallons of water consumed --- more than twice the $4.32 paid in 2012 by customers of the Allegheny County Sanitary Authority.

But this summer, Alcosan warned customers they can expect rates to double or even triple, according to KDKA-TV's Andy Sheehan.

McKeesport's municipal authority, Alcosan and other western Pennsylvania sewage treatment facilities have been ordered by federal and state agencies to stop or sharply limit releasing sewage into local streams and rivers during storms. The McKeesport authority is currently in the middle of an estimated $60 million expansion program.

KDKA-TV's Sheehan reported that Alcosan's improvements will cost an estimated $2 billion to $3.6 billion.

. . .

Nick Shermenti, who chairs the sewerage authority's board of directors and also serves as the city's public works department, told the Almanac in a recent interview that the host fee is not responsible for any rate increases.

Rather, Shermenti said, any increases in the sewer authority rates has been caused by improvements necessary to end so-called "combined sewer overflows" --- releases of sewage into the river when heavy rain storms cause sewer systems to back up.

"I can't say there won't be any more rate increases in the future, but if there are, they will be related to our (Pennsylvania Sewage Facilities Act) upgrades," Shermenti told the Almanac.

. . .

McKeesport Mayor Michael Cherepko said Wednesday that he and other city officials have already met with North Versailles officials to discuss their concerns. The sewerage authority has documentation dating back to 2008 and 2009 showing that rates would be increasing steadily to pay for necessary improvements, the mayor said.

Besides the obvious construction costs, the authority's operating costs will be increasing as well as the new plant comes on line, Cherepko said. The authority's power bills are expected to triple, he said.

Until last year, the sewerage authority was making an annual debt payment to the city of more than $1 million. Debts owed to the city by the authority were retired in 2011 when the authority pre-paid the remaining balance.

As a result, Shermenti noted, "that money was already in the (authority) budget." Cherepko echoed Shermenti's comments. "The money has already been going from the sewerage authority to the city for some time, whether it was as a debt payment or a host fee," the mayor said Wednesday.

. . .

At Wednesday's city council meeting, Segina urged the sewerage authority to make a stronger effort to include other municipalities in the process, and to do a better job explaining and justifying rate increases.

"I think all of these communities should be invited to the authority meetings," he said. "These communities need to know that they are a part of this authority, and that we are all in this together."

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