Towamencin, Norristown officials testify at state hearing on sewer sales
TOWAMENCIN — A hearing being held by state lawmakers this week has drawn plenty of attention locally, with familiar faces in the middle of the debate again.
Towamencin residents urged their elected officials to watch Democratic senators led by state Sen. Katie Muth on efforts to amend or repeal Act 12 of 2016, which has been blamed for the increase in sales of local sewer and water systems to large conglomerates.
“I think the supervisors who voted to sell the sewer system should certainly listen to it, watch it, and take note of some of the comments,” said resident Joe Silverman.
In 2022 four of the five supervisors voted to sell the township’s sewer system, after roughly a year and a half of study, debate, and strong resident opposition warning of potential steep rate hikes and a lack of accountability under a private owner. Residents opposed to the sale formed a “Towamencin NOPE” group to coordinate their efforts, won township-wide votes in 2022 to establish a government study commission and in 2023 to adopt a home rule charter they argue makes the sale illegal, and in November elected NOPE founder Kofi Osei to the board of supervisors.
Local speakers in Harrisburg
Osei was among the speakers at a hearing held by the state Senate on Monday about repealing Act 12, as was North Penn Water Authority Executive Director Tony Bellitto, whose testimony in a 2023 state hearing drew millions of views of a clip in which he argued against privatizing such systems.
Residents urged Towamencin’s board on Wednesday night to watch Monday’s hearing, particularly the testimony from those two.
“Kofi made an excellent presentation, and also did Tony Bellitto. Tony’s head of the North Penn Water Authority, and he said they run the whole plant, 52 employees, for $4.5 million. That $4.5 million also pays the CEO of Aqua,” Silverman said, referring to one of the companies that has bought water and sewer systems across the state.
“He said that public water, public sewer should not be a commodity that should be sold, it should be run by the municipality. He said ‘I have four grandkids. If somebody came up to me, and said ‘I’ll give you $1 million for that grandkid,’ would you sell it? He said no, it’s not for sale. But I could retire with that money? It’s not for sale. The same with the sewer plants, water: it’s not for sale,” Silverman said.
Since the hearing, Osei has posted clips of testimony on the Towamencin NOPE Facebook page, and Silverman told the board he watched the entire nearly-three-hour proceeding and urged they do the same.
“If you don’t listen to what the people have to say, then you don’t belong on the board,” he said.
Residents react
Paul Andrews said he also watched the full hearing, and had a similar takeaway: that companies view such sales as purchasing customers, whose rates they can subsequently increase, rather than a public utility run for residents’ benefit.
“We should all have a little of a better understanding about why privatizing water or wastewater systems are a scam, perpetrated on the residents of a township,” he said.
Osei himself didn’t reference the hearing during the supervisors meeting, but he did address the township’s sale.
“By law, the buying utility is entitled to recover most or all of their purchase price in rates. In Towamencin, the proposed purchase price is $104 million, and the fair market valuation is $104,096,000 million. If approved to purchase the system, American Water would be entitled to recover the full purchase price,” Osei said.
“Towamencin charges $590 a year for a residential sewer ratepayer. American Water charges $1,272 a year for residential ratepayers on average. So when you’re looking at solutions to our aging infrastructure, it is incumbent on the General Assembly to ask two questions: all else equal, from the end user perspective, do investor-owned utilities run water and wastewater systems cheaper than municipal systems? And is there a benefit to investor ownership that could not be achieved in a publicly owned model? The answer to both those questions is no. If someone had a leaking roof, they wouldn’t sell their house to a roofer, rent the same house back, and then use the money from selling their house to buy a sports car.”
In his own testimony at that hearing, Bellitto asked that the lawmakers look at the bigger picture.
“Let me suggest a radical thought: how about that water and sewer services, the value is priceless? What I mean by that is, what is our premise here? The premise here is, how do we value publicly owned water and wastewater services? Should they be a commodity that is bought and sold on the open market?
“We believe no, because it directly affects the health and wellbeing of all citizens of the state. This is an essential service. Everything comes to a grinding halt if there is no water and sewer service, every day,” Bellitto said.
And another familiar face made an appearance in the hearing: David McMahon, founder of the Norristown NOPE group that rebuffed a similar sale effort there in 20??, and testified to Towamencin’s study commission as they drafted their home rule charter last year, also testified.
“Act 12, fair market valuation, is an industry-driven legislation that is being rolled out state by state. Pennsylvania was one of the early adopters, and we can also show how to roll that back,” he said.
“Since first getting involved in this issue in 2020, I’ve had hundreds of conversations around this issue. And it can be really hard to summarize all the facets of it. But I will say this: regular people understand very quickly what the central issue is. They understand that, as a community, when we have an essential need, we can pool our resources, build the necessary infrastructure, and provide that service to ourselves at cost. That is the public utility model, based on ideas of the common good, and that’s what is threatened by privatization,” McMahon said.
Vote to reverse sale fails
After other board business, supervisor Joyce Snyder closed the supervisors meeting with another motion attempting to direct staff to stop the sale, the fifth time she has done so in the past year.
“I would like to make a motion for the board to be fiscally responsible, and request staff terminate the sale of the sewer,” Snyder said.
Osei immediately seconded, and cited the Jan. 16 referendum vote against an expansion of North Penn High School as another case where voters spoke at the ballot box against an unwanted new expense.
“The voters of Towamencin decided, and we had a vote for the high school, so the Towamencin voters are very discerning on what they vote yes and no to. I think it was pretty clear what they voted for, when they voted for the home rule charter,” he said.
“We’ve budgeted a few hundred thousand dollars to defend this decision, that no one wants, in courts. I don’t think that’s fair to our taxpayers, or really our ratepayers since it’s coming out of the sewer fund, and we’re saying we need to do all these upgrades. So as a compromise, I’m saying we send this letter of termination, asking American Water to get out of the sale without liability. And if they sue, which we don’t know they will, we just don’t defend it. We don’t spend money defending it, and we don’t spend money defending the termination,” he said.
Board Chairman Chuck Wilson then called for a vote, and Snyder and Osei cast the only votes in favor, with Wilson and supervisors Laura Smith and Kristin Warner voting against.
Towamencin’s supervisors next meet at 7 p.m. on Feb. 14 at the township administration building, 1090 Troxel Road. For more information visit www.Towamencin.org.
View more on Mainline Media News