State House Sound Bites

Capitol reporter Mary Wilson covers Pennsylvania politics and issues at the Pennsylvania state capitol.

Stealing from sewers to pay for payroll

Written by Mary Wilson, Capitol Bureau Chief | Sep 11, 2012 9:20 AM

Harrisburg Capitol building with fountainIf Pennsylvania cities and townships are feeling the hurt from the economic doldrums, entities like water authorities, sewer authorities, and garbage authorities are their wealthy cousins – relatively flush with cash from user fees.

Some municipalities have been leaning more and more on these rich relatives, using formal agreements and historically close relationships to get straight money transfers to help pay the bills.

But municipalities are going to have a harder time getting a little help from their friends under a new state law. John Brosious, with the Pennsylvania Municipality Authority Association, said it drives home the point that such practices must end. For one thing, they eat away at authorities’ finances.

“With more and more municipalities trying to figure out how to deal with their financial situation, [lawmakers] wanted to be sure that this was, you know, not a monetary house of cards that would kind of collapse on everybody that was involved,” said Brosious.

The law limits how much authorities can give – in cash or in kind – to community groups and events. It also requires authorities to spend their revenue only on things related to their mission – like service delivery and infrastructure upgrades. “If you’re paying a water bill or sewer bill or garbage bill, that what you’re paying for that service, is, essentially, for that service,” explained Brosious. “[S]ome of that money isn’t being used for other purposes, such as going back to a municipality to cover some of the costs that they may have incurred.”

These straight transfers, said Brosious, represented a much larger sum of money. In some cities (the state’s capital city included), the authority transfers have amounted to millions of dollars.

Brosious says sometimes it’s a formal agreement, or a historic relationship, that compels the authority to transfer money to the municipality. And sometimes the authority does bill for the service, but other times it’s clear the municipality is leaning on the authority.

Complicating matters is the fact that some authorities serve multiple municipalities or areas. So, people who pay fees to a water authority that serves several towns may also be subsidizing a municipality they don’t even live in.

There are exceptions. Authorities are still allowed to go in on equipment purchases that will be shared by both entities, and they can decide to share equipment with municipalities during emergencies.

The law went into effect in late August.

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