$17.5 million transaction enables Borough to fully fund pension plan
MECHANICSBURG, Pa.–(BUSINESS WIRE)–Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), announced today that it has acquired the wastewater assets of the Borough of Kane Authority in McKean County for approximately $17.5 million. The Authority’s wastewater system serves nearly 2,100 customers in Kane Borough and Wetmore Township.
“We are very pleased to close another significant acquisition that further expands our wastewater footprint in an area where we’ve been providing drinking water for more than 100 years,” said Pennsylvania American Water President Mike Doran. “The purchase provides a long-term wastewater solution to the community and a way to better address the financial burdens associated with increasing environmental requirements.”
The sale of the wastewater system is expected to allow the borough to eliminate its existing wastewater debt, fully fund borough pension plans, and invest in capital projects. Effective today, all four of Kane’s employees, represented by AFSCME District Council 85, Local 3603, are now employees of Pennsylvania American Water.
“This transaction will greatly benefit our citizens’ future by eliminating the unfunded liability in the Borough’s pension plans and other post-employment benefits, as well as funding storm sewer improvements and equipment replacement expenses,” said Kane Borough Manager Don Payne. “It also will anchor the Borough’s economic development strategy as well as fund improvements to our park system.”
As approved by the Pennsylvania Public Utility Commission (PUC), the company has adopted Kane’s existing wastewater rates and will continue to bill customers monthly. Pennsylvania American Water’s rates and rules of service are regulated by the PUC and are posted on the company’s website.
This is the fifth municipal acquisition by the company under Pennsylvania’s Act 12 statute, which allows municipalities to sell water and wastewater systems for a price based on the fair market value of the facilities.
“Act 12 allows municipalities the opportunity to receive a purchase price that is more in line with the current value of its system assets,” said Doran. “We have three other municipalities that are under agreement and taking advantage of this opportunity to receive fair market value for their water and wastewater systems.”
Pennsylvania American Water, a subsidiary of American Water (NYSE: AWK), is the largest investor owned water utility in the state, providing high-quality and reliable water and/or wastewater services to approximately 2.4 million people. With a history dating back to 1886, American Water is the largest and most geographically diverse U.S. publicly traded water and wastewater utility company. The company employs more than 6,800 dedicated professionals who provide regulated and market-based drinking water, wastewater and other related services to 15 million people in 46 states. American Water provides safe, clean, affordable and reliable water services to our customers to make sure we keep their lives flowing. For more information, visit amwater.com and follow American Water on Twitter, Facebook and LinkedIn.
External Affairs Manager