By Karen Blackledge
The Danville News
DANVILLE — Sewer rates in Danville are expected to more than double by as early as July 1.
Rate payers will have to make up about $30 million of the more than $36 million it will cost to complete mandated improvements at Danville's 60-year-old sewage treatment plant, said Ron Jager, vice president of water and wastewater practice with Gannett Fleming, during a press conference Thursday afternoon in the municpal building. Gannett Fleming is the Danville Municipal Authority's engineer.
The rate increase in Danville, which would probably go into effect July 1, would be the second increase since 2009. The quarterly rate for a single family home went up 90 percent, from $23.70 to $45 as of July 1, 2009.
Because it is one of the largest in Pennsylvania, the Danville plant is part of the Phase 1 mandate to reduce nitrogen and phosphorous discharge in an effort to improve commercial fishing in the Chesapeake Bay. Jager said the plant also must meet building and safety codes.
Riverside borough, which uses the Danville system, has already started increasing its rates due to the planned plant upgrades. Those residents can expect to pay $20 more per quarter in their next billing.
Last summer, the Mahoning Township Municipal Authority filed suit against Danville borough for increasing quarterly sewer rates, saying it breached a contract that required negotiation for additional costs.
Authority solicitor Michael Dennehy said there is no guarantee rates in Danville, Riverside and Mahoning Township would be the same because different municipalities are involved.
"Danville borough's sewer rates historically have been low if not the lowest in the state," Jager said.
The borough was able to keep rates low for the past 40 years because it took advantage of the Construction Grants Program and "because we have limited other improvements to the plant to those necessary to replace equipment that had exceeded its useful life," Jager said.
Authority Chairman Walter Shultz said Danville has about 2,500 users of the system. Riverside has about 650 users and Mahoning Township about 1,500 users and the Danville State Hospital and Geisinger Medical Center are also attached to the system.
The upgraded Danville plant is supposed to be operational by September 2012.
Long-range plans call for Valley Township and Cooper Township to connect to Danville's system.
The total cost of the project, including construction, engineering and legal services, is estimated at $36,434,000.
Major goals of the project, besides complying with bay clean-up requirements, are to provide a safer working environment for employees complying with current building codes and guidelines, improving public safety for residents and specifically the neighboring Danville Middle School, incorporate energy-efficient design in the improvements, improve reliability of the plant by replacing old equipment and provide flexibility to meet future regulatory requirements or unanticipated growth in the community, Jager said.
The Danville authority has contracted with Gannett Fleming's valuation and rates division to complete an evaluation of the rates in Danville. The study will be done as soon as sources and costs of funding are known, Jager said.
Loans and grants
The authority expects to know by March 23 if PennVEST has approved its request for a $20 million loan at 2.37 percent, the first five years and 3.098 percent the next 15 years. The authority has retained the legal services of Mette, Evans and Woodside and financial advice from Public Financial Management Inc. for municipal bond sale information to finance what isn't funded by PennVEST, Jager said.
When aked about alternative funding sources, Jager said "we have pursued all of the grants we know."
Dennehy said a $5 million grant the borough received under the H20 PA Act was one of the larger grants awarded under the first phase of the program. Montour County and the state Department of Environmental Protection also allocated a $1 million grant to the plant under the Growing Greener II program.
While state and federal requirements to upgrade the plant have increased sharply, funding programs have dried up, Jager said. "The old Construction Grants Program, which paid for 75 percent of the Danville plant upgrades in the 1970s, is long gone," he said.
The authority and Danville borough decided to address the upgrade issues now while they can realize savings by incorporating all projects into one large construction project and loan rates are low, Jager said.
Construction and contracts
The authority will advertise for bids in April and expects to sign a contract this summer. Noting bids for the new Danville consolidated elementary school came in considerably under the estimate, Shultz said bids are coming in 10 percent or less on projects. "The construction industry is putting out more favorable numbers," he said.
Construction is expected to begin by late summer and will take about two years. The nutrient reduction portions will be completed first by the fall of 2011, he said.
Jager said the authority and borough have been evaluating improvements required for the plant since early 2007.
The state DEP issued a new national pollutant discharge elimination permit to Danville on Jan. 11, 2008, which required the treatment plant to reduce nitrogen and phosphorus to 66,118 pounds and 8,816 pounds per year, respectively, by Sept. 30, 2012. The existing plant is not designed to reduce nutrients, Jager said.
Improvements required to comply with the new permit include a significant expansion of the aeration basins, new aeration and mixing equipment, a third final clarifier, a new chemical feed system for phosphorous reduction and replacement of numerous pumps, pipes and miscellaneous equipment, he said.
The improvements must do more than just reduce nutrients, he said. "The majority of structures and equipment at the Danville plant has provided between 40 and 60 years of service, exceeding the anticipated life for this type of equipment by a wide margin. In addition, many of the existing systems pre-date current building and safety codes," he said.
Jager said Williamsport is facing more than $100 million to upgrade its plant while Lewistown expects to spend $31 million on its plant.
"We are confident that, once the dust has settled and all communities have come into compliance with the new regulations, Danville will once again have one of the lowest sewer rates in Central Pennsylvania," he said.
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