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Wilkes-Barre hears presentation on exploring sale or other options for city sewer system
Summary
City consultants from PFM Financial Advisors told council members the city will analyze rate impacts, capital needs and regulatory hurdles as it considers options — including sale or other ownership models — for the municipal sewer collection system; no decision was made and a public RFP timeline was outlined.
Scott Sheer of PFM Financial Advisors told the Wilkes-Barre City Council that the city is in an exploratory phase to evaluate possible options for its sewer collection system, including potential sale, lease, or retention with targeted investments. Sheer emphasized the work is a fact-finding, due-diligence process and not a decision to sell.
The firm described the system as roughly 137 miles of pipe, serving about 22,000 equivalent dwelling units via six pump stations and nine diversion chambers, with wastewater conveyed to the city's sanitary treatment facility. Sheer cited recent capital needs, including a roughly $600,000 repair on Horton Street, and said aging infrastructure and increasing regulatory demands under state agencies are driving the review.
PFM outlined the objectives for the exploration: assess rate and affordability impacts for customers, estimate infrastructure investment needs, and evaluate environmental and regulatory liabilities. Sheer said the analysis will examine how rates might compare five and 10 years out under different ownership scenarios, and how proceeds from any transaction could affect the city's broader debt profile.
Sheer warned the council that debt-service pressures are expected to rise in the coming years tied to an existing Series B 2017 bond; he described a scenario in which debt-service jumps from roughly $1 million to $2 million and later to about $4 million, which he said is equivalent to about $31 million in cumulative cost over the period discussed. Overall city debt obligations were described as a little over $8 million per year.
PFM also noted that any private buyer's proposed rates would go through review by the Pennsylvania Public Utility Commission (PUC). Sheer said shortlisted firms and potential investor-owned utilities routinely buy and reinvest in older systems, but that regulatory review by the PUC is a central part of the process.
Sheer described work completed so far (reengagement in February, an RFQ and a short list of respondents) and said a resolution to hire the recommended deal team and special counsel was on the agenda to help the city move to the next phase. He outlined a proposed schedule: issue an RFP or request for bids in August, receive responses in September, hold public information sessions in October, present responses in November, and note that any transaction could take more than a year to complete if pursued.
Council members asked whether buyers would be interested in an older system and how valuation would reflect needed repairs; Sheer replied that potential buyers are active in such markets and that bidder meetings will clarify interest and valuation. The council did not record a final decision on proceeding with a sale during the segments provided.
What happens next: the council is considering a resolution to hire the advisor/team; the timeline presented contemplates an August RFP and public sessions beginning in October if the city proceeds. The presentation and questions are part of the ongoing exploration and no final action on a sale was recorded in the transcript.
