Water is a valuable public asset which should be available to all, not sold to the highest bidder to exploit for profits.
Our New Garden Experience
Our sewer system was the first one sold under Fair Market Value in Pennsylvania. We think we were sold a very bad deal. The main driver seemed to the the $29.5 million purchase price, which was going to do wonderful things for New Garden. But, we think, things turned out very differently.
There are a number of elements to this story. To start, here is a summary of the sale process (LINK). The items noted below are the key events in the sale process and subsequent rate increases.
Key Sewer Sale Events
2016 - It Is Falling Apart A key justification for the sales was the claim that the system was falling apart and a huge investment would be required to fix it (LINK). The link pretty well debunks that claim.
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Wastewater Trucking An element of the "falling apart" claim was a bona fide capacity issue at one of the treatment facilities. That facility could not dispose of all the waster water being sent to it. There was a very cost effective solution available, but New Garden did not implement it. Rather they decided to truck the excess waste water from one location to another. That was expensive and went on for five years. The role of trucking wastewater is told here (LINK).
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Rate Increase Required The follow on to the claim that the system was falling apart was the claim that without a sale an almost 80% rate increase was needed to finance the repairs (LINK). Again, that claim is pretty well debunked.
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Rate Cap A key selling point for the sale was the promise of a ten year rate cap. In retrospect that would have been an attractive part of the deal. However, before the deal closed, that rate cap was taken away for very questionable reasons. There is a lot to this story and it is told here (LINK).
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After The Rate Cap This is a side issue, but, what happens after the rate cap? Just how much should we expect rates to go up? That was never mentioned during the sale process. If it had been, it probably would have generated many questions. Here is our estimate of the subsequent rate increase (LINK).
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The 2018 Rate Increase In the middle of the sale process New Garden abruptly announced a three step, 30% rate increase. The reasons for this increase are questionable and that story is told here (LINK).
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Aqua's First Rate Increase New Garden and Aqua executed the sale in December-2020. Eight months later Aqua did a routine filing for a general system wide rate increase. The Public Utility Commission processed and approved an increase that went into effect May-2022. It was not until September-2022 when most New Garden residents received their first bills with the full impact of the rate increase. The residential increases ranged from 21% to as much as 124%. The average was about 85%. Needless to say, there was a lot of "rate shock". But, at that point, expressing shock and outrage was all that could be done. Here is more perspective on the increase (LINK).
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Accountability For The Rate Increase When we were hit with big rate increases in 2022, we wanted answers from New Garden about what happened. That kind of rate increase was certainly not expected by residents. After being repeatedly pressed, New Garden agreed to hold a special meeting on the issue. We think it turned out to be a total fiasco. Here is the detailed story of that meeting (LINK).
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Rate Mitigation When the proposed sale was first announced, New Garden promised its sewer customers that some of the sewer sale funds would be used to mitigate against rate increases over and above the promised rate cap. That promise was made multiple times in writing. When the rate increases actually happened, New Garden changed its tune. Rate mitigation never came to pass. The full story is told here (LINK).