Oil City Hoping to Meet with Companies Interested in Buying Wastewater System

| August 10, 2018

OIL CITY, Pa. (EYT) – The Oil City Council is hoping to meet informally with a pair of companies who have expressed interest in purchasing the city’s wastewater system.

After putting out informal requests for proposal to see how much the system would be worth, the city received letters back from both Aqua Pennsylvania Wastewater, Inc., and Pennsylvania American Water.

But neither company was willing to put into writing what it would be willing to pay for the system.

“I was quite disappointed,” City Manager Mark Schroyer said. “Neither will document the value of the city’s assets. They don’t want to show their hand to their competitors.”

Both companies appear willing to sit down with the city to discuss the worth in private, but Schroyer wasn’t sure if the city was allowed to do so.

City solicitor Robert Varsek said the city could sit down and listen as long as no formal action was taken behind closed doors.

“The way I see it, we have three options then,” Schroyer said. “We can meet with them in private, we can put the sale on the backburner or we can put out a formal RFP and see what they are willing to pay.”

Schroyer said the problem he saw with a formal RFP would be the cost to the city which he estimated could range anywhere from $20,000 to $40,000 while acknowledging that step would have to be taken anyway if the city decided to sell the system.

Councilman Dale Massie said he wants to see what the system is worth in “real” numbers as opposed to the varying estimates being given.

“It seems to be a moving number,” Massie said of the estimates. “One time it is $40 million now it is down to $25 million. I can’t make a decision without some feel for what it is really worth. If it is under $20 million, I’m not real excited. I want to get a good deal for the residents.”

A pair of council members took the opportunity to again express long-held beliefs.

Ron Gustafson said he would love to see the city retain control of the system but in a partnership with Cranberry and Cornplanter Townships. But he also acknowledged that anytime those discussions come up there always seems to be resistance of some sort.

Michael Poff reiterated that his belief is that an outside company would put its profits ahead of the needs of the city’s residents because they ultimate goal is to make money.

In the end, the council decided to approach both Aqua Pennsylvania Wastewater and Pennsylvania American Water about meeting one-on-one to discuss what the system would be worth.

Massie said he is insisting those meetings be in person and not via teleconference or video conference.

“I want to understand the character of them,” Massie said.

COUNCIL AGREES TO HELP IN REMOVAL OF COLLAPSED BUILDING

The council agreed to chip in $2,000 towards the removal of a collapsed building that has forced the closure Lee’s Lane the last couple of weeks.

According to Schroyer, the unnamed property owner had just recently acquired the property only to have the building collapse. He was willing to pay for the removal of the building and was quoted, sight unseen, by a contractor an amount of $7,000. But once the contractor saw the project the cost rose to $10,000, which the property owner bulked at.

“He has a $7,000 loan that he took out,” Schroyer said of the property owner. “What we would like to do is partner with him. I see two things here. This is, No. 1, a public safety hazard because the ally is blocked and, No. 2, the ally buttresses the basement of the building and we would like to see it stay or we are going to have to go in there and do something else to stabilize the alley.”

Schroyer said the city has money available in its demolition fund.

“I think it can be solved,” Schroyer said. “The property owner and the contractor seem to be onboard with the idea.”

LEWIS LANE ISSUE DISCUSSED

The council discussed an issue with Lewis Lane.

For years – from some estimates dating back to the 1940s – one end of Lewis Lane has been open to vehicular traffic in the area of Vergelli Scrap Metals. But sometime in June, Vergelli closed down the lane and put a fence up raising a concern with residents of Lewis Lane about safety issues as well as the ability of the garbage truck to get back to their properties.

The city sent a letter Vergelli asking if the end of Lewis Lane could be reopened but got a negative response from Vergelli’s lawyers.

Schroyer said the city has owned a right-a-way of the lane but only for utility purposes.

Various options were discussed, but ultimately Varsek suggested that the matter would be better handled in an executive session because of the potential of litigation. The council adjourned to executive session but took no formal action.

ONE BURNED OUT PROPERTY GIVEN TAX REFUND, A SECOND DENIED

The council received requests for prorated property tax refunds on two properties that were either destroyed or partially destroyed by fires.

After a lengthy discussion, the council agreed to refund $471.28 for a property at 207 West 4th Street based on the fact that the burned out building had been razed.

The council, however, rejected the request for a refund of $255 at 611 Mitchell Avenue citing the fact the building is still there and the insurance company has yet to decide if it is a total loss or not. The council did say the property owner could request the refund in the future if the building was razed.

“I’m not for giving a refund if the property is still standing,” Gustafson, who also noted that even if buildings are razed on the property the land still has a value, said. “(Not giving the refund) may be our only recourse to make sure the (building) gets torn down.”

OTHER BUSINESS

In other business the council:

  • Heard from Schroyer that the city received two donations for the Land of Laughter Playground project, one in the amount of $200 from Gustafson, and a second one from Janette Thompson, who used to teach at the school that was on the property, in the amount of $100.
  • Approved a request from Oil City School District to hold its homecoming parade and bonfire from 6 p.m. to 9 p.m. Sept. 20.
  • Gave approval to the Oil City Main Street program to apply for a $50,000 Facade Improvement Grant. The program has already awarded over $100,000 in funds for improvements.

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