Brentwood sells its sanitary sewer system for $19.2 million to PA American Water

Brentwood Borough officials wrapped up a yearlong deal Dec. 7 when they sold its sanitary sewer system for $19.2 million to a separate utility company.

Brentwood’s roughly 4,500 customers will now be served by Pennsylvania America Water.

The sewer authority, which only owns the pipes that carry the sewage to ALCOSAN, began searching for buyers in 2019. George Zboyovsky said the borough did not have the capacity or the manpower to continue collecting fees, a service the borough had done in-house with its public works crew.

“This entity has the capacity to handle it and maintain the rates,” he said.

As part of the deal, no public works crew member will lose their jobs, and PA American Water will use its own force to handle the responsibilities.

Zboyovsky said the borough has risen its rates along with ALCOSAN every year for the last decade or so to keep up with the cost of maintaining the lines and operating the payment collection services.

In 2021, the borough’s usage charge will remain at $8.91 per 1,000 gallons and the service fee will stay at $4.57. The sale agreement with PA American Water states the company will not raise rates until 2023.

Rates must be approved by the Pennsylvania Utility Commission, the regulating authority for utilities.

The money from the sale will help pay off $14 million of debt, specifically, bonds issued to pay for renovation projects such as the football stadium, the pool and the construction of the borough building.

The manager said there are discussions surrounding other possible ways to use proceeds from the sale. One of those options includes creating a special fund used to offset future tax increases.

“Our rough calculation showed we don’t need to have another tax increase for another 10 or more years,” Zboyovsky said.

Another option includes using about $1 million of the proceeds to renovate the Brentwood Civic Center.

The unanimous vote by council means Brentwood, with a population of about 9,300, became the first smaller community in Allegheny County to sell its sanitary sewer system. The City of McKeesport, with a population of around 19,000, sold its sewer authority to the same company for $159 million in 2017.

Selling water and wastewater systems became possible after the state’s Act 12 of 2016. It allows municipalities to sell systems for a price based on the fair market value of the system.

Brentwood’s system was appraised by PFM Group in November 2019. The borough has discussed its options in public meetings since then, until finally voting Dec. 7 on the final purchase agreement with PA American Water.