Pa. agency could be on the hook for $1.25 million grant

April 27, 2011|By ROXANN MILLER |

GREENCASTLE, Pa. — The sale of the Antrim Township's water system has hit another dead end, forcing a Franklin County development agency to possibly pay back a $1.25 million state grant.

In January, it looked like the nearly two years of haggling over the sale of the Antrim Township Municipal Authority water system to Greencastle Area Franklin County Water Authority was a done deal.

But it fell apart two months later over the 10-home Hess development when the Greencastle authority refused to exempt the homes from Antrim Township Board of Supervisor's list of mandatory hookup exemptions, officials said.

Greencastle authority Manager Kenneth Womack said the key snag during the final stage was the question of exempting Antrim Township homeowners on Bemisderfer and Hykes roads and in the Hess development from hooking onto the water system.

"We agreed to exempt the homes on Bemisderfer and Hykes roads until their property was sold, but we would not exempt the Hess development," Womack said.

Womack said residents in the Hess development were required to hook onto the Greencastle water system in 2007, per the Pennsylvania Municipal Authorities Act.

But failing to exempt the Hess development was the deal breaker at the March Antrim Township Supervisors meeting when they voted 3-2 against the sale unless the Greencastle authority honored its original agreement and exempted residents of the Hess development.

"Apparently, they rejected our offer and Greencastle Water Authority is just moving on with business over here. We're not making any counteroffer," Womack said.

"What's crazy about all of this is they (GAFCWA and ATMA) are not arguing over price. In this case, the price was agreed to immediately," said Mike Ross, president of Franklin County Area Development Corp. "In this case, you have a situation where both authorities have already approved the deal."

Ross said he got involved in the project when the Antrim authority applied for grant funding to expand the treatment capacity of its water treatment plant.

To help Antrim with its grant application, Ross and FCADC helped procure the infrastructure development program grant through the Pennsylvania Department of Community and Economic Development in 2008.

To get funding, Ross said there needed to be a company — in this case FCADC — that would promise to invest a certain amount of money in the project to create a number of jobs over a three-year period as a condition of the municipality getting the grant.

If the conditions of the grant weren't met, FCADC was on the hook to repay the $1.25 million that was used to upgrade Antrim's plant.

"We made the case to DCED that the development potential at Exit 3 is so significant, and that the ability to have adequate water will be critical in serving the needs of future developments, that we pledged that if you funded this request that two things would occur — one, within three years there would be at least $20 million of new investments, and two, 75 jobs would be created," Ross said.

With the upgrades to the Antrim plant complete and the state grant due to expire by the end of June, Ross said his agency must repay the grant money if the plant was not sold to GAFCWA.

"We (FCADC) are the unintended victims here. We're hanging out there because of the inability to reach an agreement on the consolidation of the system. I can tell you right now we're not in a position to write a check for $1.25 million. We're going to have to work potentially on a repayment plan," Ross said.

Hess a sticking point

Ross said he doesn't understand why the Hess development continues to be a pivotal issue in the sale of the water system.

"If, and when, or how much they should pay to connect, should have no bearing on the sale of the system. If this sale never goes through, the Hess development will continue to be served by GAFCWA," Ross said. "The sale is being held up on an issue that is at best peripheral to the agreement, but could easily be argued as immaterial to the agreement."

Antrim Township Supervisor Fred Young is a resident of the Hess Development. He said people have accused him of holding up the sale of the water system for personal reasons.

He said that's not true.

"The rhetoric that is being put out there is very one-sided as why this sale has failed. I was just as happy as anyone else on Jan. 11 when I thought we finally had a sale," Young said.

Young said his decisions are made for all of his constituents including those in the Hess development who would suffer a financial hardship if they had to hook onto the GAFCW.

'Sweet deal'

But, Young said other Antrim Township residents are against the sale of the water system for other reasons.

"The vast majority of my constituents don't have water and sewer and say, 'Why are you loaning my money at 2 percent interest to another authority in another town to buy our water system?,' and they're right," Young said.

Young said if the sale had gone through, GAFCWA would have taken over payments on the system when the Antrim Township system was purchased in 2003 and be getting an upgraded plant and be charged 2 percent interest on the loan.

He said the township has given the GAFCWA a "sweet deal" and is tired of the township being painted as the "bad guys."

Young also said that the idea of selling the Antrim Township water facility to Greencastle happened after the grant.

"Something that people don't want to discuss right now is they make it sound like this ($1.25 million) grant was happening because it was assumed that these (water systems) would be merged. That's not the case," Young said. "The talk of selling didn't even happen until four to five months after this was agreed upon."

Ross said Young's statement is not correct.

The future development potential of Exit 3 will be enhanced with one water system rather than two, Ross said.

"From the standpoint of operational issue and trying to be more user-friendly to the outside world, it makes it much easier as a developer to come in and be able to say that the water is being supplied by one authority rather than deal with two authorities," Ross said.

For now, the supervisors are sticking to their guns and not selling.

The GAFCWA is not buying, but Ross said he remains cautiously optimistic that the two parties will agree to a sale so that the FCADC won't be on the hook to pay back the $1.25 million.

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