LEWISTOWN — One week ago, in our Saturday, March 13 edition, The Sentinel published an editorial opinion on its opinion page entitled “The Lewistown Borough Council doth protest too much, we thinks,” giving our opinion of the recent actions of council pertaining to the Municipal Authority of the Borough of Lewistown.

Lewistown Borough Council President Venus Shade on Friday submitted a response to that editorial on behalf of council that is included below. The “article” cited is that editorial opinion and not a report on any meeting or event.

The response is included in italics in its entirety below.

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Over 15 months ago, the Municipal Authority of the Borough of Lewistown (MABL) launched a “surprise attack” against the Borough of Lewistown, and filed a lawsuit seeking to block the Borough from exercising its legal rights. Since that time, Lewistown Borough Council has endured one hit after another. The Sentinel’s latest article — “The Lewistown Borough Council doth protest too much, we thinks” — is based on misstatements, half-truths, propaganda, and fake news rather than reporting.

Instead of continuing to sustain an onslaught of attacks based on disinformation and political agenda, I decided it was time to set the record straight, once and for all. Be prepared: what follows will likely contradict what you’ve read in this paper and social media.

The Law

The Borough incorporated MABL in 1944. As the incorporating municipality, the Municipality Authorities Act — or “MAA”for short — gives the Borough continuing rights and powers to assure continued accountability and oversight over the unelected entity it created. For instance, the Borough not only appoints all of the members of MABL’s board, it also is empowered to restrict MABL’s projects, and its related activities.

By way of another example, the Borough has the legal right under the MAA to acquire all the assets of MABL, at any time, by simply dealing with its “obligations.” Think of it like paying off an existing mortgage in order to buy a home. Ironically, Granville Township is intimately familiar with this concept. In 1999, Granville Township acquired the sewage treatment system of the Granville Township Municipal Authority, and these facilities are now operated by the Granville Township Sewer and Water Department. I don’t recall any other municipalities calling out Granville Township for “monetize[ing] the authority for its own gain at the expense of all of its customers,” when it took over those assets.

None of these legal rights are new; they have been on the books for decades. You may be asking yourself — then why did MABL file a lawsuit against the Borough? Because MABL had an ulterior motive.

The Lawsuit

In the fall of 2019, Borough and MABL representatives held two meetings, when the Borough explained that it intended to hire a professional firm to study MABL’s finances, and any potential rate of return that the Borough might be legally entitled as the incorporating municipality. If the study supported it the Borough would consider acquiring some or all MABL’s assets, and lease those assets back to MABL to maintain a continuity of operations. The representatives made clear that the Borough had no desire to sell the water system to an outsider and would not enter into a leasing arrangement that had a material effect on MABL’s rates. While the study was undertaken, the Borough did not expect any major activities to take place until the study was completed. Both sides agreed to speak again once the Borough’s financial study was completed.

Ignoring the Borough’s request, MABL passed a resolution on December 18, 2019, which authorized the issuance of $30 million of new bonds. This “poison pill” would have prevented the Borough from repaying MABL’s debt for at least a decade, effectively blocking the Borough from pursuing its legal rights. Upon learning of MABL’s covert resolution, Borough Council passed its own resolution, invoking its statutory right to restrict MABL’s projects and prevent the issuance of the bonds. The Borough sent a letter to MABL clarifying the intent of its resolution, stating that if MABL believed it necessary to borrow any money whatsoever, the Borough would facilitate such a borrowing.

MABL never consulted with the Borough on anything, but instead filed a lawsuit against the Borough to nullify the actions taken by Council. This lawsuit has cost MABL’s ratepayers, including those in Armagh, Brown, Derry, Granville, and Union, nearly $1,000,000 in legal fees in less than a year! That translates to $90 for every MABL customer in 2020.

To make matters worse, this obscene waste of public funds was overseen by a “litigation committee” consisting of only two of MABL’s five board members. MABL’s executive director and lawyers, including its “esteemed local barrister,” then met in secret and actively locked out any MABL board members who they viewed as unfriendly to their cause. The legal bills were not provided to board members outside of this “litigation committee” despite repeated requests, and the bills were simply approved without question. You can imagine that Borough Council, which has appointed all five members of the MABL board, would be unhappy seeing two unelected board members approving such an incredible waste of ratepayer money in such a short period of time.

In mid-2020 the PA Commonwealth Court issued an order effectively stopping MABL from pursuing its “poison pill” strategy. Only then did their plan move from scorched Earth litigation to discussing a settlement.

On September 14, 2020, MABL, the Borough, and Mifflin County entered into a Memorandum of Understanding, which MABL’s lawyers drafted, stating clearly that was to be “non binding.” Under the MOU, two more agreements would have to be negotiated before anything would be finalized. When the terms of these additional agreements were presented to Borough Council, they were not accepted. This is when MABL again went to court to force the Borough to sign the documents without Council approval.

MABL’s lawyers then jumped sides and began representing the newly created County Authority, seeking to intervene in MABL’s lawsuit. The Court soon denied the County’s Authority’ attempt to intervene and also denied MABL’s motion to force a settlement.

Based on these events, it should come as no surprise that, on January 4, 2021, Borough Council appointed a new member to MABL’s board that is not in favor of filing lawsuits against the Borough. Since that time, the MABL board has hired a new solicitor and taken steps to end the million-dollar litigation.

Those are facts that have not been effectively reported. Note that at no point did the Borough seek to sell the water system to a private entity, which it has the right to do, or seek to “triple” the rates of MABL customers, a group which of course includes the residents of the Borough. Those allegations are among the lies spread on social media, at public meetings, and elsewhere. Who was behind these lies, and why were they spread? Just look to those most affected by any change at MABL.

The Fallout

I hope it is clear now why the Borough has no interest in participating in the current County Authority. It quickly became obvious that, rather than a cooperative venture that would benefit all, this new organization was simply a way to continue attacks on the Borough of Lewistown, and employ those lawyers that pursued it. Why would the Borough agree to entrust the water system to a group that is so clearly anti-Lewistown? If the townships of Armagh, Brown, Derry, Granville, or Union had been sued and demonized for a year, would they want to join an organization governed by these same people? Of course not!

The Borough believes the water system should not be for sale — to any new or outside party. This does not mean that the Borough does not see a path forward that involves cooperation with other municipalities served by the water system. In fact, even after the Borough knew that it had obtained a favorable ruling against the County Authority’s legal attempt to force a sale of the water system, Lewistown Borough Council representatives reached out to schedule a meeting to discuss fresh ideas about future cooperation.

These are the known facts. It is sincerely hoped that this allows for the rumors, innuendos, and gossip regarding Borough Council for the past year to be put to rest.