Butler Area Sewer Authority has dissolution plans in place if its sale to Pennsylvania American Water Company is approved by the Pennsylvania Public Utility Commission, but dissolution is contingent on other factors, including the collection of outstanding payments.
Nearly 1,170 BASA customers are behind on their bills as of Sept. 30, totaling about $1.18 million in outstanding payments. Almost 165 accounts have liens on them, and 19 customers owe at least $800 to BASA while 959 customers owe less than $500.
Duane McKee, executive director of BASA, said although Sharp Collections, a tax preparation company based in Sharpsville, will most likely take over accounts receivable in the event of the sale, no one knows how long it will take to receive all the owed debts.
“The way we anticipate it happening is we're going to collect on the last quarter's bill,” McKee said. “Sharp will wait on those final collections — we're trying to get them (hired) for a couple years.”
Sharp Collections will take over accounts, because BASA employees who have accepted employment offers from Pennsylvania American Water will immediately join the company, said Gary Lobaugh, the water company’s senior manager of government and external affairs.
The final bill from BASA will cover only a portion of one quarter, which follows the final quarterly bill, according to Tom Knights, Butler Township managers.
At the same time, Pennsylvania American Water will mail new wastewater customers a separate, standalone “welcome packet,” which will contain additional details pertaining to future billings. The details and dates of these actions are pending PUC approval of the sale, according to Kurt Knaus, senior vice president of Ceisler Media, which is aiding with public relations communications of the sale.
The BASA board of directors approved the appointment of Sharp Collections at a meeting Oct. 10, and the Butler Township commissioners did the same at a meeting Oct. 16. Butler City Council will review the appointment before it is made official upon the closing of the sale.
Rebecca Black, Butler Township solicitor, said at the Oct. 16 meeting Sharp Collections will be paid a portion of the debts it collects.
“Appointing Sharp, there is obviously a payment involved in that; I believe 15% of the gross collections,” Black said. “So whatever they are able to collect, 15% of past due payments will be their fee.”
Black added that the amount owed within Butler Township is relatively low. However, the remainder of any amount collected from uses in the six municipalities will be split between the township and the city.
“The amount of past due liens within the township make up $66,000,” Black said. “It’s a very small amount of outstanding bills, collectible amounts that are actually within the township, which means the township has a lot of responsible individuals living within it who generally pay their bills on time.”
Pennsylvania American Water may close on its purchase of the sewer authority in December, Black said, for a total of $231.5 million, which will be split between Butler and Butler Township following the payment of debts and liabilities.
According to Dave Zarnick, Butler Township commissioner chairman, BASA has about $38 million in debts, based on the 2023 fiscal year, so the two municipalities would split about $193 million if the sale is approved.
“It could be more, could be less by the time of closing,” Zarnick said of the amount owed. “That is coming out of the sale money.”
