Penn Hills residents express concern for hiring company to appraise sewage system

Dozens of Penn Hills residents tuned in to a virtual meeting Monday to discuss a plan that could lead to the sale of the municipality’s sewage system.

Of those who spoke, nearly all were against an idea to hire Philadelphia-based Public Financial Management (PFM) to look into how much the system is worth.

The meeting came after council, in February, delayed hiring the company to give residents the chance to discuss the move.

Several residents, including Mayor Pauline Calabrese, expressed opposition to the plan because they were afraid of the repercussions of privatizing a public utility. Although selling the system could bring a lump sum in order to pay off existing debt or other projects, they feared higher rates for customers in the future.

“Let’s be honest, no private entity is coming in to not make a profit,” Calabrese said.

Deputy Mayor Catherine Sapp said selling the system is not what has been presented. She said the process is similar to getting a house appraised.

“It’s not this issue of privatizing or looking to privatize. It’s actually just an appraisal to see what our system is worth — something we all should know,” she said.

If hired, PFM would analyze the municipality’s sewage system and come up with an estimated appraisal. The system, as it stands, includes 245 miles of sewage pipes, 12 pump stations, seven equalization stations, two sewage treatment plants, 13 emergency power generators, 7,172 manholes and 65 storage tanks.

Officials have estimated the municipality still owes around $54 million of sewage sytem-related debt it accrued in the 1990s. The debt, which officials say will be paid off by 2034, came when the federal government mandated Penn Hills to update its crumbling system that led to sewage overflows into rivers and streams.

Raymond Rall has worked at the municipality’s Water Pollution Control Department for 44 years. Addressing council, he said he was against the municipality joining ALCOSAN, and he’s wary of the possibility of privatizing the system now.

“If it goes privatized, (employees) will lose benefits, they will lose pay probably and there’s no guarantee they’re going to keep their job and the taxpayers will have no control over the rates, just like they don’t with ALCOSAN,” he said, adding he plans to retire within a couple of years.

Penn Hills customers, at $265.47, paid the highest residential sewer rate in Allegheny County in 2020, according to data collected by 3 Rivers Wet Weather.

The number represents quarterly municipal and ALCOSAN rates at 12,000 gallons of water used.

The next highest rate payers were in Brentwood, at $240.49. Brentwood Borough sold its sewage system to PA American Water for $19.2 million in December.

The third highest rates were in Indiana, at $221.86.

Penn Hills’ agreement with PFM would mean paying the company a one-time fee of $8,000 plus expenses, such as meals and travel, which are capped at $500.

Hiring PFM will be up for a vote during council’s meeting March 15.

Council has said agenda-setting meetings will take place one week before its monthly voting meetings. Calabrese said the meetings are designed for back-and-forth discussion on important topics.