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Cecil County Sale of Water/Sewer Plants Proposed for State OK

August 9, 2011
By Nancy Schwerzler

The long-stalled sale of most Cecil County water and sewage treatment plants to the private Artesian firm has received staff recommendations to the state Public Service Commission to approve the sale.

The sale, originally approved by the Cecil County commissioners nearly three years ago, was blocked by litigation initiated by the Appleton Regional Community Alliance (ARCA), an anti-growth group based in the northeastern area of the county adjacent to the Delaware state line. However, the state’s highest court, the Maryland Court of Appeals, ruled recently in favor of the county to permit the sale.

[See previous Cecil Times report here:
http://ceciltimes.com/2011/06/court-of-appeals-rules-cecil-county-can-sell-watersewer-plants-to-artesian-court-orders-arca-to-pay-some-county-legal-fees/

But there is still another hurdle for the proposed sale. It must be approved by the state Public Service Commission. That panel is scheduled to hold a hearing on the issue on Wednesday in Baltimore.

[UPDATE: A last-minute bid by some county commissioners to delay PSC action was filed in a letter from Del. Michael Smigiel (R-36) to the state panel. In addition, a majority of the commissioners decided Tuesday to fire their long-time attorney, Lawrence Haislip, from representing the county in the sale to Artesian, according to Artesian officials who were notified on Tuesday.]

[UPDATE: In a brief four-paragraph letter to the PSC, Smigiel wrote that he had “been contacted by several of the Cecil County commissioners asking if I would request a postponement” of the scheduled hearing. “Commissioners have an opportunity to resolve some issues regarding the legal counsel that shall be representing them henceforth,” he wrote.]

The ARCA litigation has cost Cecil County taxpayers over $203,000 in legal fees so far, as well as costs for ongoing operation and routine maintenance of the water and sewer plants and an interim management agreement with Artesian to keep the plants operating while the county cut back on staffing—or at least $1 million in costs. [See previous Cecil Times report here:

http://ceciltimes.com/2011/06/arca-lawsuits-cost-county-citizens-up-to-1million-and-counting-on-artesian-sale/

As the PSC prepares for its hearing on Wednesday, the professional staff of the PSC filed documents a few days ago to recommend that the full PSC board approve the sale to Artesian, according to research by the Cecil Times.

Anthony Myers, assistant executive director of the PSC, filed a lengthy memo on 8/3/11, recommending approval of the application by Artesian to acquire the water and sewer facilities from Cecil County:

“Staff recommends that the Commission (1) find that the exercise of the franchises is consistent with the public convenience and necessity, (2) authorize the exercise of the franchises by Artesian Water Maryland and Artesian Wastewater Maryland, and (3) authorize the assumption of the long-term debt obligation consistent with the joint application and Asset Purchase Agreement. The Commission should accept the proposed water and wastewater tariffs for filing with an effective date concurrent with the date of the closing of the transaction…”

The PSC had initially approved the sale on 11/18/08 but pulled back from that finding after ARCA and the Cecil Land Use Alliance (CLUA), another local anti-growth group, challenged the sale. The PSC was essentially waiting for the courts to decide the issue. The Cecil County Circuit court initially ruled in favor of the county and Artesian but ARCA appealed the case to Annapolis. But the state’s highest court ruled that the county had the appropriate legal authority to proceed with the sale.

In its voluminous report to the full PSC, the agency’s staff noted that despite losing in the state’s highest court, ARCA and CLUA subsequently demanded that the PSC should side with the losing, minority opinion in that case. Those groups argued that although the high court ruled that the county had the legal authority to do so, it “should” not necessarily do so.

In filings with the PSC, Artesian asked for swift approval of the sale, citing the Court of Appeals ruling, and asked for approval of the detailed terms of the acquisition, including assumption of $6 million in debt currently owed by the county on sewage treatment plants that would ultimately be transferred to Artesian’s responsibility.

The PSC staff recommendations concluded that the sale is “consistent with the public convenience and necessity,” as provided in state law.

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2 Responses to Cecil County Sale of Water/Sewer Plants Proposed for State OK

  1. Sue Fuhrmann on August 9, 2011 at 3:48 pm

    It would have been helpful to describe ARCA and CLUA as RESPONSIBLE growth groups rather than anti-development. There IS a difference, and it’s significant.
    Thank you.

    EDITOR’S NOTE: Ms. Fuhrmann is listed as an “intervenor” opposing the Artesian case before the Public Service Commission, according to an 8/8/11 letter to the PSC from the lawyer representing opponents of the sale.

  2. TotallyDisgusted on August 10, 2011 at 7:40 am

    [Libelous statement deleted]
    Just give at firesale prices, my taxpayer owned sewer system, with miles and miles of pre built piping and sewer plants to an out-of-state-for-profit company.

    Regardless of any needed upgrades, the cost to build what is already here would be many many times more than the low taxpayer/ ratepayer paid for infrastructure that Artisian is getting. Now we can proceed to build many more houses and look just like New Castle County.

    The fix is in. I cannot believe the court’s decision and I expect no less from PSC.
    The rate payers are [expletive deleted.]

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