Athens Township supervisors Wednesday tabled a vote on whether to guarantee a $6.5 million loan for the Athens Township Authority to make needed upgrades to the township's sewer system.

Supervisors postponed action on the guaranty to give solicitor John Thompson time to check on the language used in a proposed agreement. A special meeting will likely be called to vote on the guaranty prior to the supervisors' July meeting, officials said.

The guaranty would enable the authority to obtain a lower interest rate, keeping sewer rate increases at a minimum, explained ATA chairman Pat Musto.

However, under the guaranty, the township would be required to make payments on the debt if the ATA defaults on the loan - a highly unlikely scenario, Musto said. "We fully expect to pay our own bills," he said.

Thompson and supervisors took issue with a clause in the agreement that stated the township must budget each year for the amount they would need to pay the debts, should the need arise. That number would work out to over $400,000 annually to start, officials said - about 10 percent of what the township budgeted for the current fiscal year.

"It just doesn't make sense to me that we have to have a parallel effort," said supervisor Jack Walter. "That's just ludicrous."

Without a guaranty, the authority would have to raise sewer rates even higher than the proposed $40 to $60 annual increase, Musto said. The authority has already increased its tap-in fee from $1,500 to $5,500 per equivalent dwelling unit to offset the upgrade expense.

Due to rapid natural gas-related growth in the township over the past few years, the sewer system is at or very near capacity in several key areas. The ATA can no longer issue will-serve permits to new developments, thereby halting growth in areas served by the maxed-out pump stations, Musto said.

Of the loan, $4 million will finance the new project, while $2.5 million is a refinancing of old debt, Musto said.

The sewer upgrade project would involve two pump stations - one near the former Camco Manufacturing facility on King Lane and the other located near Athens Area High School.

The King Lane pump station is currently rated to serve 500 EDUs - the amount of demand typically created by one single-family household, about 400 gallons of water a day. The upgrade would boost the station's capacity to 1,500 EDUs, Musto said. "We're planning for growth," he said.

Recent development in that area, including several hotels, a proposed nursing home and the recently completed Chesapeake Energy office complex, has taken a toll on the station, Musto said.

A new force main would then be run from the pump station down Wilawana Road and through the area, running under Route 220 and parallel to the existing Elmira Street sewer line. The main would connect to the pump station near the high school, known as Pump Station #1.

That station would also be upgraded to handle the additional EDUs from the new main, Musto said. Pump Station #1 is currently at between 90 and 95 percent capacity.

Crews would then install a new, larger main from that pump station to the Valley Joint Sewer Authority plant in Athens Borough to relieve the bottleneck, Musto said.

The main would replace one that was installed just five years ago, before authority members anticipated the township's rapid growth, said authority member Terry Depew. "That's how quick everything happened," he said. "We're still paying for that line."

The proposed project would not include improvements to the Greens Landing sewer line, which is also very near capacity. Preliminary estimates for upgrades to that line alone came in at over $4 million, Musto said.

Following the upgrade, the authority will also need to look into purchasing more capacity from the Valley Joint Sewer Authority, Musto said.

Musto also asked supervisors for a portion of the township's impact fee funding to help offset sewer rate increases that will result from the upgrade. The sewer system has seen the most impact from the natural gas industry, he said.

The contribution would help residential sewer customers, who will end up paying for the upgrades required by commercial and industrial growth, authority members said.

"It's just not fair to them," Depew said.

Amanda Renko can be reached at (570) 888-9652; or email: arenko@thedailyreview.com.