Whitehall-Coplay Press

Sunday, June 24, 2018

CWSA hears performance details at annual meeting

Wednesday, April 25, 2018 by PAUL CMIL Special to The Press in Local News

High marks are given for pension funding, EPA inspection requirement

The April 19 meeting of the Coplay-Whitehall Sewer Authority (CWSA) was its annual review meeting. Key members of the audit and review teams gave their detailed reports to the board.

John Barry, from Brown and Brown Insurance, was first to present his performance assessment.

“This was a tough year for insurance claims,” he said. “Losses caused by disasters topped $135 billion, which was the largest loss we have ever recorded. Worldwide, there was an estimated $330 billion in uninsured losses. The U.S. share of the losses was nearly 50 percent.”

With that preface, the board braced for rate increases. Barry indicated an increase of 1.2 percent in insurance rates and a drop in workers’ compensation costs. CWSA has improved its on-the-job safety programs and reduced its accident modifier with safe workplace practices.

“In addition to the actions taken by CWSA, we are able to keep rates low because the investment climate improved, mergers in the industry keep rates competitive and we had tax relief,” he said.

Most people do not realize that the value of investments and the cost of taxes significantly impact the premium rate.

Barry emphasized that cybersecurity is a major issue because it is an ongoing problem and does not have a singular cause or resolution.

As for future trends, Barry sees potential for a different consolidation.

“JP Morgan, Amazon and Berkshire Hathaway are looking at how they can reduce insurance costs. These companies are self-insured and want to reduce their costs,” he said.

How these companies address insurance requirements will be watched closely.

Jeff Dobeck, of Buckno Lisicky & Company, P.C., presented the audit report. The auditors found no problems with the financial accounting program or the commitment of CWSA to a true accounting of costs.

A good audit is key, given the environment for wastewater management entities. Lehigh County Authority (LCA) is under scrutiny with detractors claiming the organization is essentially bankrupt and questioning its expenditures. LCA is the organization that leased the Allentown Wastewater Treatment Plant from the City of Allentown. The Allentown treatment plant is the plant treating sewage from CWSA.

Assets and liabilities for CWSA remained steady. The authority has $29.6 million in hard assets with a long-term debt balance of $8.6 million. CWSA had a net worth of $20.4 million and showed an operating loss of $235,000.

Another key operating indicator is pension liability. The pension plan is 87.7-percent funded, an excellent ratio made possible by increases in investment value. The value of the fund is calculated based on the age and longevity of the potential recipients. As might be expected from a long-term projection, changes will happen that can affect pension funding.

Attorney John Stover reported that delinquent payments are being reduced. CWSA settled 30 claims during the year. There are 19 new claims that are under negotiation.

Stover reported that a long legal battle between CWSA and the Allentown Waterfront Project is settled. (See that story in next week’s edition.)

The Environmental Protection Agency (EPA) issued a mandate for all municipalities using the Allentown Wastewater Treatment Plant to reduce inflow and infiltration in the system. CWSA made a concerted effort to comply with the requirements and is considered to be further along than other related organizations.

One requirement of the mandate is to check each customer for rainwater diversions that go into the sewer system. CWSA reported it is 96-percent complete with its inspections. Stover indicated the EPA requirement could be turned over to the Pennsylvania Department of Environmental Protection for final completion.

Darryl Jenkins, CWSA engineer, briefed the board on the progress made by completing projects to reduce inflow and infiltration. Future projects include providing public sewer connections to households around Summit and Prospect streets in Whitehall. Jenkins praised the board and the staff for their ability to react pragmatically to problems and get issues resolved.