The City of Scranton, Pennsylvania was saddled with a federally mandated Consent Decree associated with the operation and management of the Scranton Sewer Authority. The Authority was in the midst of carrying out a challenging, federally mandated long-term control plan that had already resulted in three significant rate increases in excess of 44 percent each (in 2003, 2007 and 2012). The Authority was also projecting average annual rate increases of 4.57 percent a year for the next 30 years, resulting in “High Burden” sewer bills under EPA metrics.
Faegre Baker Daniels Consulting principal Skip Stitt used a competitive Request for Proposals (RFP) process to identify third-party providers interested in acquiring or leasing the sewer utility assets. After reviewing the providers’ responses, the Authority entered into an asset purchase agreement with Pennsylvania American Water Company (PAWC) valued at $195 million. In concert with the City, PAWC developed a series of industry-leading operational strategies to reduce costs, increase revenue and improve services as part of the sale.