It’s official: Towamencin board votes to terminate sewer sale

After nearly four years of talks, two township-wide votes, one tied election, and countless comments on both sides, the planned sale of Towamencin’s sewer system is no more.

Township supervisors voted unanimously on Wednesday night to withdraw from the long-discussed sewer sale agreement with buyer PA American Water.

“I would like to thank all of the Towamencin residents who never gave up. It took collective effort to stop this,” said Supervisor Kofi Osei, the leader of the local NOPE group whose activism propelled him to a tied election for a supervisor’s seat which he won by drawing numbers.

In September 2020 the township first took up talks on selling the sewer system, on the heels of a multiyear process to separate from a joint ownership structure that had been shared with Upper Gwynedd.

At the time, township officials said they had concerns about costly state and federal mandates that would require infrastructure repairs and upgrades. Supervisors made the case that a sale would yield an up-front payment the township could use to pay down debt, generate revenue for other projects, while shifting the costs of those upgrades to a private owner.

Residents opposed to the sale proposal were led by Osei and formed a "Towamencin NOPE" group arguing that the township's ratepayers would be vulnerable to steep rate hikes under a private owner, with no local control over those rates, and the proceeds going to corporate profits or bonuses as Towamencin's sewer bills doubled, tripled or more. In April 2022 the township hosted two public townhalls to field feedback, hundreds of residents turned out and most voiced opposition to the sale, and the next month the board voted 4-1 to approve a sale for $115 million to NextEra, the highest bidder at the time.

NOPE members led by Osei took the township to court, and mobilized to petition the county for a ballot question authorizing a government study commission to rewrite the township's charter with provisions they argued made the sale illegal. That charter was adopted by voters in May 2023, took effect on July 1 of that yea.

Osei was elected to the board of supervisors that November, ultimately prevailing in a tied election race with sale proponent Rich Marino. While the rest of the board transferred the sale to PA American at a lower price of $104 million after NextEra pulled out of the deal in March 2023, similar cases have since been stalled at the Pennsylvania Public Utility Commission's lengthy approval process, as NOPE members continued to question the mounting legal costs of the sale battle, and pushed for changes to the state law allowing such sales.

In August came a stunning reversal, when supervisors Chairman Chuck Wilson announced that PA American Water and the township saw little likelihood the sale would be approved and asked for a motion to terminate the sale. That motion came at the close of Wednesday night's supervisors meeting, after comments from several residents looking back at the lengthy battle for public opinion.

Steadfast opposition

Paul Andrews kicked off by thanking Osei and supervisor Joyce Snyder for their steadfast opposition to the sale, and the residents who backed the home rule charter and study commission efforts.

"Thanks to them, we have a home rule charter that will prevent any future attempt to steal water systems from under our feet. Even though a majority of our local supervisors refused to listen to us, eventually these efforts paid off, when the PUC changed its rules, forcing our board and Pennsylvania American Water to terminate our sale," he said.

"I would like to remind voters that our work isn't done. Act 12 must be repealed, which means electing legislators in Harrisburg that listen to us. And we must be vigilant here at home, to make sure this terminated APA doesn't somehow return, like a zombie, with another buyer," Andrews said.

That asset purchase agreement was the subject of several questions from resident Rich Costlow, who asked the board to "go overboard in trying to explain everything to us" about why the sale would be terminated, and what happens next.

"From my perspective, money was the overwhelming reason that the citizens of Towamencin were mobilized on either side of this sewer sale event, whether they were for it, or they were against it," he said. "About half the township is on either side of this question."

He asked about financial advisors PFM and whether they would be paid if the sale does not close, and whether the township would have to pay legal expenses to its special counsel for the sewer sale issue.

"If we're going to walk away from this, we should not have paid for stuff that we don't have to pay for, if the contract doesn't close," he said.

James Collins called it a "happy day," and said he thought the NOPE group showed how residents could come together across party lines.

"You had people from both sides of the aisle, regardless of political whatever, coming together, for what they thought was going to be an issue that could affect our community," he said.

"We mobilized, we met, we talked, we showed up to meetings, and we got involved. And that is the most important lesson" from the sale saga: "the more we're involved in what happens in our community," even after the sale ends, "the better our community will be," Collins said.

Tina Gallagher, a NOPE member who served on the study commission, added her own thanks to Osei and Snyder: "They agreed with many people that there was more harm than benefit to this sale," then took aim at the three remaining supervisors who voted for the sale.

"Shame to supervisors Smith, Warner and Wilson, for thinking that perhaps there was more benefit than harm. Harming people is what brought me to this issue. I felt like I was lied to. I felt like thinking that harming the majority of people in this community was a good idea, just did not sit with me. Spending taxpayer money for defending a harmful decision, just did not sit with me," she said.

Game over

Christian Fusco, a township resident and North Penn School Board member, questioned whether the sale debate was truly divisive, outside the meeting room.

"I think really, in the community at large, there was an agreement that this was a bad idea, and that's what I want to focus on. Without the leadership of Kofi Osei and without the organization of NOPE, none of this happens. This gets done in the dark, and we're stuck with a giant bill, and we're all wondering what the hell happened," he said.

He then cited the date of the meeting, September 11, and the feeling of unity after the terror attacks 23 years earlier.

"We go around on 9/11, and we say 'Never forget,' and many times I've thought to myself, what is it I need to remember? I think one of the lessons we need to take away was, on September 12th, we came together. We picked each other up. And we weren't worried about who was a Democrat and who was a Republican. We were all just Americans," he said.

"This is huge. American Water is one of the 50 largest utility companies in the country, and getting larger. This is a big deal. And we were able to pull it off because we worked together. They had the clout with the PUC. They had the money. They had the law on their side. They had a majority of the supervisors on their side. And we worked together, and we pulled it off. They're gone. They're done. Game over," Fusco said.

After other board business, came the formal action, with Wilson reading a motion authorizing the township's legal counsel "to take all needed action to terminate the PAWC asset purchase agreement," including signing a mutual release needed to do so, and repealing the ordinances from 2022 authorizing the sale and from 2023 regarding the transfer.

"The PUC recently issued an order setting a formula that effectively determines what it deems to be a reasonable price for utility acquisitions of municipal water and wastewater systems. Under the existing asset purchase agreement, the purchase price Pennsylvania American must pay the township, is far higher than the PUC's purchase price standard under its new formula," he said, echoing comments from the August meeting.

"The action before us this evening is to consider a motion authorizing township legal counsel to take all needed action to terminate the asset purchase agreement," he said.

"There are no payments going in either direction. This is a mutual release: both parties concluded that this wasn't going to be able to be completed," Wilson said in answer to a question about costs.

Resident Cheryl Portwood asked what would happen with PFM, the financial advisor that vetted the bids before the 2022 vote, and if or how they would be paid with no sale proceeds.

"We are done with them. They receive no payment; they will not receive any payment," Wilson said, and Portwood replied, "Good grief."

Osei then asked for specifics of the agreement with Dilworth Paxton, the special counsel for the sewer sale suit, and legal costs the township would have to cover. Wilson answered that "we're still working through that" due to "some conflicting language in the agreement." Wilson then began to ask for a motion, Osei interrupted with "Motion" to make it, and the latter then pointed out that the township municipal authority and PA American Water had already approved.

One 5-0 vote later, residents clapped and cheered as the termination was made official.

Osei thanked the rest of the board, noting "I've been asking for this for over three years now," before questioning whether the board could have done so when prior buyer NextEra pulled out in early 2023.

"NextEra would've terminated it cleanly. They just wanted to get out of the agreement," he said.

Osei questioned why Wilson and others "were negotiating in secret" with PA American prior to publicly disclosing that NextEra wanted out, and said he hoped the public remember which supervisors "were committed to jam this harmful scam through," he said.

"Remember though, the N in 'Nope' stands for neighbors. It wasn't just me," he said, acknowledging other communities who have opposed similar sales.

In comments after the meeting and posted on Facebook by the North Penn Democratic Committee, Osei added that the initial talks began four years ago, his involvement three years ago, and he saw little movement as just one voice.

"They would ignore me, and they did ignore me. So I started knocking on doors, and posting on Facebook, saying 'Please check out this decision the township is making.' And you all joined...and they still ignored us," he said.

"... But through all this effort, and through the pressure of people here in Towamencin," and legal cases challenging similar sales elsewhere, "the PUC finally said 'We should probably be a little more strict on this,' and finally, American Water was like 'We're not going to win this, we want to get out.'"

"This didn't come out of thin air. It had to happen, because we showed up to these meetings, and we did all of the work. So thank you all. I can't believe it's done," Osei said.

Towamencin's supervisors next meet at 7 p.m. on Sept. 25 at the township administration building, 1090 Troxel Road. For more information visit www.Towamencin.org.

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