(The following is a letter to the editor from a Towamencin resident regarding the potential sale of the township’s sewer system. The views expressed in this editorial belong to the author alone. Send editorial submissions to [email protected].)
The sale of the sewer system is nothing but a transfer from a bill generally referred to as a “tax” to what is generally referred to as a “utility bill.” This is a gimmick, and all this does is shift the discussion away from the word “tax.”
Our township supervisors are about to decide on selling our sewer system to a company for $115M. Here is how this will work:
The township signs an agreement of sale.
The awarded bidder writes a check to the township for $115M. The clock starts ticking.
Interest starts to accrue. Since increases in sewer rates are frozen for 2 years, the company cannot charge us to get paid back until year three.
Jump ahead to year three: The $115M becomes $120M assuming an interest rate of 2%, which is very low. (Interest rates are rising and are approaching 5% for the purchase of a house.)
Present sewer system revenues are $5M per year. We are essentially paying back that company that gave us $115M. Look at this as a loan, same as buying a home. Our payments on a $120M loan at 2% for 30 years. Our annual payments to pay for principal and interest will come to $5M, which equals present annual sewer system revenues.
Servicing the loan will require a doubling of sewer revenues, and thus our sewer bills will double.
We pay this for 30 years.
Now, at this point in time, even after 30 years, the company has still not made any profits. The only way they can show a profit would be to increase rates above and beyond the doubling of rates that services the loan of $115M, and this does not include capital projects.
This is a shell game shifting our expenses from a tax to a utility bill.
Please vote NO! on the sewer system sale.
Signed,
Martin Cohen
Westhampton Way
Towamencin
See also:
Residents Speak Out After Towamencin Supervisors Signal Intent to Sell Sewer System
Towamencin Supervisor Majority Says They’re in Favor of Selling Sewer System Despite Opposition
North Penn Says Proposed Towamencin Sewer Sale Would Have Minimal Impact on District
To Sell or Not to Sell: Towamencin Board to Decide Sanitary Sewer Fate in May
Towamencin Inches Closer To Possible Sewer Privatization With Feb. 11 Bid Deadline
Editorial: Selling the Sewer System Would Be Bad for Towamencin (and Elsewhere)
