Teresi Proposes Sale Of Wastewater Treatment Plant To JLDC
City Council members could soon see a resolution regarding the proposed sale of the wastewater treatment plant to the Jamestown Local Development Corporation.
Mayor Sam Teresi presented the proposal during Monday night’s City Council meeting with Kenneth Bond, a senior partner of Squire, Patton and Boggs. Under the plan, the city would sell the wastewater treatment plant to the JLDC in an effort to create and fund a capital infrastructure and equipment program.
Bond said the process of selling the waste water plant to the JLDC would be what is referred to as “the monetization of assets.” He said it is a “modern, legal and efficient way” to take the equity out of assets.
“It is not unlike if you were to go get a mortgage on your house,” he said. “You have an asset that has value, and you take out some debt, and the house acts as collateral or security for the mortgage. If you sell the house and you need to use the mortgage money for something else, you don’t have a place to live. So, monetization simply transfers the ownership of the asset to an entity related to the city, but in the transfer, the entity pays for the asset in its appraised value.”
Bond said the wastewater treatment plant is appraised between $15 and $20 million.
Teresi pointed out there are a variety of places in which funds could be applied for improvements, such as replacing sanitary sewer lines and slip lining programs; upgrading the waste water treatment plant; replacing or reconstructing water mains; continued energy or structural improvement programs for city facilities; enhanced storm water management improvement programs; Department of Public Works and a Parks Department equipment replacement fund; a debt service and sewer rate stabilization fund and a future property tax reserve with additional property tax and rate relief. The total of all of these suggestions comes to about $16 million.
“Sometimes, providing tax relief is about coming up with more revenues that are not property tax-based,” Teresi said. “Sometimes it comes up as shedding services, sometimes it results in finding new and better ways to do things and sometimes it comes in the form of investing in things that makes our lives easier.”
Under the proposal, the Board of Public Utilities and the JLDC would enter into a Use and Administration Agreement in which the BPU would operate the plant on behalf of the JLDC. Likewise, the existing city and BPU labor agreements would remain status quo.
The council members formed a general consensus of interest in the proposal. Teresi said the next step would be to have a draft resolution come before council next week. In the future, the City Council would need to vote on a resolution, as well as the JLDC.