Municipal authority members stumped at takeover

(Cornwall) — It is possible that the struggle between the Cornwall Municipal Water Authority and Cornwall Borough could cost more than $200,000 in legal fees, said Authority Council Christopher M. Arfaa, and those charges could get passed on to the tax payers in the borough.

“That threat is not an unreasonable estimate, given what’s going on,” Arfaa said.

“The citizens and rate-payers are right to be concerned about the amount of money, and litigation, by definition, is not productive. But if you look at the facts, it’s the decisions of the borough that are driving the costs.”

On April 2, borough council passed an ordinance to dissolve the Authority and acquire its assets. That meeting occurred at 8 a.m.,in an effort, Arfaa said, to discourage input from the community.

“Why have your meeting for the first time ever at 8 a.m.; that’s like ‘shoot first, ask questions later,’” Arfaa said. “That action only enhanced the need (for the Authority) to get legal counsel, to make sure everything was done above-board.”

Authority members said that emergency 8 a.m. meeting violated the state’s Sunshine Laws.

Borough Council also filed an injunction with the Court of Common Pleas stating “do not allow this Authority to spend any money resisting us.”

But Judge John Tylwalk ruled that the Authority had a right to an attorney – and the games were on.

Those six days of litigation (in the Court of Common Pleas) represent half of the attorney fees the Authority has for the entire month of April, Arfaa said.

The borough’s action against the Authority has not been decided, so litigation fees will continue to climb. Meanwhile the Authority is trying to fulfill its “fiduciary responsibilities,” Arfaa said.

Borough resident George Stump told Authority members Monday that the citizens are not happy about the money being spent to resolve the legal issues accompanying the proposed takeover.

Vice-chairman Donald Bemesderfer expressed the confusion that every Authority member echoed.

“Not one person from (borough) council came here and said ‘this is what we’re going to do,’ we found out they were dissolving the Authority in the newspaper,” Bemesderfer said. “By sheer brute force, they took it over. They could have been here months before. I never had an explanation as to why they wanted it. The truth is, everybody who sat on this Authority board looked out for the rate payer.”

While there was some speculation that the borough council wanted the money that the Authority has in the bank, another possibility was voiced: the need for more room.

It is rumored, Arfaa said, that the Cornwall Police Department may need the entire borough municipal building, so that the Council could move quarters into the municipal authority building on Rexmont Road.

While the Authority has at least $800,000 in their account, an amount that may reach closer to $2 million, Bemesderfer cautioned inappropriate use of the funds.

“This is not magic money,” Bemesderfer said. “We’ve got an old system, we’re looking at crumbling infra-structure. We’ve still got some terra cotta piping and Bethlehem steel cast iron pipes.

“You can liquidate reserves, but you have to remember that replacing infrastructure is going to be expensive. We need to look to the future.”

When the Council passed an ordinance requiring the Authority to liquidate their assets, it placed the Authority “between a rock and a hard place,” Arfaa said.

The borough ordered the dissolution of the Authority before getting the Public Utilities Commission approval, but PUC code states the borough cannot acquire the Authority before getting PUC approval, he explained.

“The PUC says that can’t be done (transferring assets) without first getting PUC approval,” Arfaa said.

The Authority’s attorney pointed out reasons to visiting residents why the Authority should continue to exist, saying that the Authority has independent borrowing capabilities, something that Council does not have.

“That’s a tangible benefit for the rate-payers,” Arfaa said.

Municipal authorities are not subject to certain PUC costs that municipalities would need to pay, Arfaa added.

The whole thing is a mystery, said Chairman Paul Vranesic.

“The whole process has been wasteful,” Vranesic said. “I still haven’t seen a cost/benefit analysis that would show this is a good cost-effective move for the borough. You’re not reducing staff – so what are you saving?”

“If it’s about consolidating services, what are you consolidating?” Vranesic asked.

Vranesic said the Authority board is willing to meet with the borough council in public meetings to avoid further legal expenses.

“No one from Council ever came here and told us we were doing a bad job,” Vranesic said. “Are the police moving here? Is that what it is? At this point, a lot of people in the borough are scratching their heads and wondering what’s going on. It certainly could have been handled better.”

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This article comes to us through a partnership between the Lebanon Daily News and WITF.