Authority mulls planned sale to county board
Past actions, purchase terms come into question
LEWISTOWN — The Municipal Authority of the Borough of Lewistown (MABL) was presented with a resolution related to the transfer of the authority’s assets to the Mifflin County Municipal Authority at Wednesday’s regular monthly meeting, but questions over the terms led to the proposal being tabled in favor of a special meeting on the topic next week.
Solicitor David Gaines presented Resolution 5-2021, which authorizes officers of the board to enter into agreement for the sale of assets to MCMA. The previously negotiated terms of sale require MCMA to pay Lewistown Borough $1 million at the time of execution, and $300,000 per year, plus an inflation adjustment, each year for 30 years, a total of $13.17 million.
But, the resolution did not include an asset purchase agreement that was referenced in the resolution, and it was unclear what would happen if MCMA was in position to pay off the balance early.
Board member Frank Berrier questioned what the payment to the borough would be if the new authority offered a buyout, which would be allowed under the current wording of the resolution, along with the agreement of the borough. Because Gaines was unable to offer an answer, the resolution was eventually set aside.
Berrier also questioned a clause in the resolution that addressed previous actions of the authority. He particularly expressed concern over agreement to the original Memorandum of Understanding signed by former board member Murray Laite, who Executive Director Craig Bubb stated had that authority as a result of an ordinance passed by a prior board.
Board member Jeff Rocco recommended a special meeting to ensure this did not slow the process of transition. The board agreed to schedule a meeting on a date to be determined next week.
As part of the same discussion, Berrier noted that the MOU does not include a “purchase price,” although it does have a schedule of payments. Board chairman Ben Rager said the total of the payments — $13.17 million — is the purchase price, although there was a reference to an actual asset purchase agreement in the resolution, but none was attached.
The board also discussed two legal bills that have been on the agenda since January, again choosing, as Rager said, to “kick the can down the road” yet again.
Cozen O’Conner, the law firm that represented MABL in its suit against the borough, has yet to be paid $9,189.71 for its work. Tucker Arensberg, the firm with which former MABL solicitor Tim Searer is associated, has asked for $1,313.66.
Berrier and Rocco again dominated the discussion, which focused on whether the authority was overcharged, especially by Cozen O’Conner, and whether some of the amount requested was for MCMA activity.
Berrier noted that MABL was to pay for the “formation” of MCMA, but questioned whether some of the fees were accrued at the behest of the county before MCMA actually existed.
Rocco argues that the entire transition included the expectation that MABL would become MCMA, and any funds in the system will be transferred over.
“That was part of the whole deal. … Any work done was being done on behalf of both parties (will likely pass to MCMA),” he said.
“If we owe money we should pay it. We should take care of our bills,” he added. “Are you guys equipped to say they shouldn’t have billed us (that amount)?”
Rocco noted that, as solicitor, Searer reviewed the bills and said they were appropriate. Rager favored leaving the payment up to the new authority, which is to take over the water system before the end of the year.
Also at the meeting:
¯The treasurer’s report noted that water revenue is $35,000 below budget year to date, and below last year at the same time, which was attributed to lingering effects of COVID.
¯Office Manager Deanna Hassinger reported that a finance and payroll software update was completed as of July 1.
¯Executive Director Craig Bubb reported that the authority had completed its work on Fourth Street in Lewistown, and that PennDOT would begin milling and paving early next week.
¯Board member Frank Berrier asked Engineer Pat Ward about possible hazards to the community’s water supply from either vehicle incidents occurring on U.S. 322, or from security related to feeder streams above the dam. Ward agreed that it might be wise to address the issue with PennDOT in light of two overturned trucks in the area of the reservoir in the past two years. Bubb added that the authority has a source water assessment plan and is proactive in water safety.
¯Rocco moved that the board approve attendance by senior management and board members at the PMAA conference in State College in September. MABL is a member of the association, although its relationship changed when the board changed unemployment compensation insurance providers earlier this year. The motion carried with Berrier opposed.