Public Utility Commission sides with Cornwall Municipal Authority

(Lebanon) — Another legal shoe has dropped in Cornwall Borough’s attempt to take over operation of the Cornwall Municipal Authority’s water system.

For the second time in little more than a week, the outcome did not favor the borough.

But, according to Councilman Tony Fitzgibbons, the rulings will not stop council from proceeding with the takeover.

“The council has acted to disband the authority. The authority will be disbanded. And we will comply with whatever requirements we have to do that,” he said.

The matter dates back to early April when borough council passed an ordinance ordering the municipal authority to transfer its assets over to the borough with the belief it could operate the system more efficiently and provide cheaper rates.

The municipal authority took legal action to challenge the takeover on the grounds that because it serves a number of residents outside Cornwall, to do so would require the borough to receive a permit of public convenience from the PUC.

The authority also instantly responded by using savings to pay off a bond debt, and with the debt payments savings dropped water rates.

The authority’s legal action prompted a counter filing by the borough, challenging the authority’s right to intervene.

Last week, Public Utility Commission Judge David Salapa sided with the authority in ruling that the borough must obtain PUC approval for the reason that it has non-municipal customers.

However, the judge did not rule on the borough’s challenge of the authority’s standing or council’s claim that the borough was exempt from PUC jurisdiction because so few customers lived outside the municipality.

That decision came down on Monday, when Salapa, using similar reasoning to last week’s ruling, denied the borough’s preliminary objection that the authority had no standing to contest the borough’s takeover.

Salapa also denied the borough’s request for a declaratory judgement that would have waived the PUC’s jurisdiction over the matter because just 47 of its 1,331 water customers live outside the municipality.

The rulings likely set up an evidentiary hearing to be scheduled in the next few months that will allow both sides to argue the question about the PUC’s jurisdiction over the takeover, said Chris Afaa, an attorney representing the municipal authority.

“Basically, all the procedural stuff has been cleared away,” he said. “We can expect some pre-hearing conference to be scheduled so the parties can talk about the most efficient way to decide if the PUC should be exempt.”

Fitzgibbons, an attorney, maintained that the rulings were not unexpected and would only delay council’s eventual takeover of the water and sewer systems.

Pointing to its previous decisions, Fitzgibbons also expressed confidence that the PUC would eventually rule in the borough’s favor and waive the need for a certificate of public convenience.

“The decision was made and will not be revisited,” he said. “The only question is how much of the tax payers’ and rate payers’ money will be wasted.”

But Afaa turned the tables. Although it has a right to dissolve the authority, he said, the borough’s approach forced the authority’s hand to protect the welfare of the non-municipal rate payer.

“The authority’s view is, a lot of the cost and waste and time spent” on preliminary objections “could have been avoided if they had come to us first, or at the minimum gone to the PUC and done it the way the law requires,” he said.

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