LH Council further commits to Joint Municipal Authority talks

Agrees to transfer assets when one is formed

LOCK HAVEN -- Lock Haven City Council is further cementing its intent to form a Joint Municipal Authority with other entities that utilize the water system.

The subject in particular regarded the city's willingness to turn over its assets and debts to a newly formed authority.

Talks about forming a joint authority began in January when it became apparent the costs associated with maintaining the water system -- including DEP required upgrades to the city's two reservoirs, Keller and Ohl reservoirs -- would be difficult to maintain individually.

The suggestion came from Suburban Water Authority Manager Greg Mayes in a letter presented to council during its Jan. 8 meeting. Mayes proposed the city, along with Suburban, the Central Water Filtration Authority and the Lock Haven City Authority, work to combine its assets for a singular system.

At the time, council agreed to explore the option, with Council members Barbara Masorti and Rick Conklin serving on a subcommittee.

At Monday's meeting, Masorti and Conklin, along with City Manager Gregory Wilson, presented council with a recommendation to further ensure the city's participation within the formation of the new authority.

Masorti said in discussions with representatives of the various entities, it was decided a letter of intent that would lay out what would be expected of each could ensure the work needed to prepare a Joint Municipal Authority wouldn't be in vain.

"We could go that route and spend the money, have the by laws made and have everything put together," she said.

However, Masorti said it could be possible for one of the entities to choose to back away once it realized what would be expected.

"If all four entities aren't willing to not only bring their assets to the table and their debt to the table then expending the energy and the money to form a joint authority" would be wasted, she said.

Wilson said the city's overall assets regarding the water system are valued at about $1.9 million, based on an assessment by its insurance company completed in 2023.

Those assets included limited infrastructure, such as the Castanea and Cummings Village tanks; meter pits; vehicles; stop pipes, meters, shovels, picks, fitting, leak detection equipment and more.

The one liability the city has, Wilson said, is its 2021 A borrowing note which, with interest, is valued at $528,000 as of Dec. 31, 2023.

"The bulk of the city system is in the hands of the Lock Haven City Authority which is meeting this Friday to consider the same question," Wilson said.

Wilson said the assessed value of the city authority's assets is roughly $11 million.

With council's agreement, if the joint authority moves forward, it would agree to hand over its assets and any debt for $1.

"Last week, Suburban Water Authority held its regular meeting and it did agree to turn over its assets for $1 to the new joint municipal authority," Wilson said.

Wilson noted a merger will take time, and this is only the first step. He pointed out the combination of multiple entities will require finding ways to combine union and nonunion work forces, healthcare and more.

"After discussion last Thursday, the recommendation from the committee to the entire council was that -- if terms can be reached that are agreeable to the city in the formation of a Joint Municipal Authority -- the city would turn over its assets," Wilson said.

Mayor Joel Long asked how the formation of this authority could affect municipalities that are served by either Suburban or the city.

Masorti noted currently, there is not representation on the city's side of things for its customers in Wayne and Castanea townships. However, in the formation of a new authority that representation could be offered.

"This new joint authority opens the door for Castanea and Wayne to have a seat at the table. They can choose not to," she said.

Masorti said the joint municipal committee is hopeful all entities involved will agree to the terms laid out in the recommendation.

"We're sharing not only our assets but our costs. Because the truth is the costs that are coming to water systems like ours over the course of the next 20 years are really high," she said. "As a city, we are never going to be able to handle all of that alone."

Conklin noted the costs that are in the city's future will be shared with Suburban and the two authorities already -- just in a different way.

"We're all going to share them anyway just on slightly different levels. It would be better in my mind if everybody looked at it and was paying the same rate," he said.

Following discussion, council unanimously agreed to the terms laid out.

"We're a long way from having this come together," Masorti noted. "This is just preliminary to make sure this city council is in for doing this."

In other water system discussions, council voted unanimously to request the Central Clinton County Water Filtration Authority update its cost-sharing agreement between Suburban Water and the city.

The recommendation was made after a letter from Suburban Water Authority was sent to the city in mid-March.

"Currently the city and Suburban bear shared costs in the water system, which includes the dams we get water from, and the cost of filtration. Those costs are administered through the Central Clinton County Water Filtration Authority," Wilson said.

Wilson explained when a project is funded for the water system, the city takes on the debt which is passed to the filtration authority. From there, the cost is split 60/40 between the city and Suburban with the full payment sent back to the city.

The letter from Suburban noted the filtration authority -- which is made up of representative from both entities -- would be the best place for future discussions regarding interim financing for capital improvements of the shared system.

"The city's subcommittee is recommending to council that the cost sharing agreement between all parties be amended to provide that the administration, planning and funding be done by the filtration authority instead of the city for all shared capital improvements," Wilson said.

This includes completion of the groundwater wells in Wayne Township along with the dam improvements at Keller and Ohl reservoirs and more.

"This (letter) isn't the first of its kind to come to the city. I think when we discussed different options that were available one was creating a committee to oversee all of the projects. But that committee already exists -- the central filtration authority," Wilson said.

Wilson noted the filtration authority also recommended this change be made.

He added, with the city free of that line of debt, it opens its borrowing capabilities. He used Keller Reservoir's upgrades as an example.

"When discussion takes place when we'd like to get started on Keller, there is no interim financing room for the city to borrow to do Keller," Wilson said. "Whereas if these entities are willing to get involved in that process of funding, the perfect place to really do that would be the filtration authority existing board."

It was noted this step would make further discussions regarding a Joint Municipal Authority run smoothly.