OIL CITY, Pa. (EYT) — After a spirited debate, the Oil City council by a 4-1 vote Thursday elected to dip its toes into the water of a possible sale of the city-owned wastewater treatment plant.

After months of prep work, the council last month was given a variety of options for what it could do with the wastewater plant, and Thursday those discussions became more spirited when city manager Mark Schroyer gave the council three options.

“We could do nothing,” Schroyer said. “We could put our toes in the water and test to see what the system is worth or we could go with a full-blown commitment to sell the system.”

In the end, the council, with Dale Massie, Isaiah Dunham, Ron Gustafson and mayor William Moon voting in favor and councilman Michael Poff voting against, decided to proceed with the middle option.

“We can’t proceed in speculative values,” Gustafson said about a system that could be worth anywhere from $18.4 million to $61 million according to a study done by the firm HRG on the city’s behalf. “We would need to see what the system is worth. I’m not sold on an outright sale. I don’t know. The study doesn’t give us that. I think there are other avenues to explore including a cooperative agreement with our neighbors. Although I don’t know how easy that would be. But I can’t make a decision without numbers.”

Schroyer believes that based on the HRG numbers and other discussions the value of the system should be between $32 million and $35 million. The question then becomes, would the city make enough off the sale to make it worthwhile.

“We have $10 million in existing debt and another $14 million that we just borrowed that we would have to pay from,” Schroyer said. “By the time that is down, we could be down to $15 or $17 million real quick.”

On the other hand, according to Schroyer and a number of council members, the city could also be facing significant costs, including some unplanned costs, with the system and that whether or not the system is sold, sewage rates are going to have to go up.

“Can our small, limited customer base handle the (cost) of the repairs?” Gustafson asked.

A debate ensued between Poff and Dunham over whether the city should even consider the sale.

“If we privatize it, we lose control of the system,” Poff said. “Yes, we get a lump sum money, but the company is going to be looking for a return on investment. Our bills will pay it all back plus. Their number one responsibility is to their shareholders.”

Poff said he believes that in addition to any rate hike that would be needed to cover repairs/upgrades the company would also increase rates an additional six to 18 percent with it probably falling in the 10 to 13 percent range.

Dunham shot back that rates would raise either way.

“They will raise it more,” Poff said.

“We can put it in the sale that they can only raise it so much,” Dunham countered.

Massie said something needs to be done.

“It’s a losing situation if we don’t do anything,” Massie said.

Poff echoed his beliefs that it is the responsibility of the city to do what is best for the citizens of Oil City.

“The more we privatize, the more we rely on and trust a private company to (have our interest in their best interest),” Poff said. “Once we do it, there is no going back.”

Dunham asked what was better for Oil City.

“We are,” Poff said.

“They pay us,” Dunham countered.

Massie said that if something isn’t done, the council would have to face leaving its children and grandchildren with a large amount of debt.

“Can we afford to keep it?” Massie asked.

Gustafson said this is the biggest issue he has faced during his time on council.

“This is probably the largest thing I’ve had to consider in my time on council,” Gustafson said.

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