The sale of the city sewer system to the Greater Johnstown Water Authority is a good move for the city of Johnstown – in the short term and in the long run.
Immediate benefit: The city has already received a $24 million payment.
Additionally, the city can keep money now in its sewer general revenue fund after costs associated with the transaction, meaning another $4 million stays with the city.
A longer term benefit: The water authority is taking on $63 million in debt through the Pennsylvania Infrastructure Investment Authority from the ongoing region-wide sewer project to reduce overflows.
Officials said that debt could grow by nearly $18 million as the project moves through Johnstown’s central business district.
The water authority is now the point agency for getting the project completed by the Dec. 31, 2022, deadline – meeting stipulations from the state Department of Environmental Protection.
Selling major public assets, including the sewer system, was a recommendation from state officials as Johnstown works to exit the Act 47 program for distressed municipalities.
The city is giving up an infrastructure asset that generates revenue through customer payments.
But we see this move as the best option for Johnstown.
City Council closed the deal with the GJWA on Wednesday, keeping the sewer system under control of a public entity.
The water authority has pledged to hold sewer rates for three years.
Mayor Frank Janakovic told The Tribune-Democrat’s Dave Sutor that the deal will “help stabilize our city, which we’ve not been in that kind of shape for decades.”
Interim City Manager John Trant Jr. said the sale will “put the city on a new trajectory that has the potential to benefit the city in amazing ways for decades to come.”
He said “significant capital improvements” and “visible improvements to the city’s infrastructure and amenities” are on the way.
The Johnstown Redevelopment Authority continues with ownership of the sewage plant at Dornick Point, as well as some areas of the system.
City officials have said they plan to use some of the sale proceeds to:
• Support their pensions, which are struggling under the weight of retirements outpacing money going into the fund. The city will be able to reduce its annual minimum obligation by $2.25 million to $3 million, Act 47 coordinator Deborah Grass said.
• Upgrade equipment for the police and fire departments, and for public works.
• Make improvements at Sargent’s Stadium at the Point and Frank J. Pasquerilla Conference Center, including replacing the artificial surface at the ballpark.
“We’re thrilled to see this coming to fruition after all of the hard work,” Grass said.
We agree, and applaud the efforts of GJWA manager Michael Kerr, city leaders and state officials in making this happen in a way that benefits the city’s budget and sewer system customers.