Sewer Plant update 1-20-11

January 20, 2011
Gennaro A. Marino P.E.
409 W. Main St.
Kutztown, Pa 19530
610-683-7977
Kutztown Borough Council
Kutztown Borough Hall
Gentlemen,

The article in today’s Reading Eagle about the $5.5 million Kutztown Sewage Treatment Plant update by Ron Devlin was very informative. Councilman Schlegel stated he wants to be up front and that water and sewer rates will be increased. He stated he did not know how much the increase would be because it hasn’t been bid. The real reason he does not know the rate increase is because he and the rest of the Council have not figured out where the funds will come from. You all vote for the $5.5 million project without having any idea where the money will come from or how it will be raised. The Borough does not have any funds in reserve or funds set aside for such a disaster or for an electrical department transformer burnout. Councilman Schlegel if you inform Spotts Stevens & McCoy of the type of financing for the project they can estimate the rate increase based on the $5.5 million construction estimate.

The Borough has never set aside funds for any type of utility breakdown or any unforeseen emergency. Councilman Schlegel, you made sure the article stated that part of the update was mandated by the State Department of Environmental Protection. Let’s face it funds should also have been set aside for new DEP updates.

What you didn’t say was the Borough debt is presently about $13 million and the annual debt payment is about $1.2 million a year.( about $25,000 a week) If the Borough borrows $5.5 million at the same rate of the present debt the annual payment for the $5.5 million will be about $500,000 a year. (a little less than $10,000 a week) The borough debt will be about $18.5 million? The Borough debt will just about be equal to the Borough Budget and if the debt payment were paid weekly the payment would be about $35,000 a week.

Please note this is grade school arithmetic, and you, the Borough Council, have created this financial disaster and better find a way to resolve it.

You can apply for grants from the state. Please keep the public up front on how you propose to finance this project. Thank you.

Gennaro A. Marino P.E.