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City officials are confident that a proposed $1 million host fee being assessed to the Municipal Authority of the City of McKeesport will pass any legal tests.

Recent changes to state law restricting sewerage, water and other authorities from making certain kinds of grants or payments will have "no impact" on McKeesport, city Solicitor J. Jason Elash said.

"We've talked to people at other authorities, including in Altoona," he said. "These fees are being paid all over the state."

Council on Wednesday by 5-1-1 vote approved entering into a cooperation agreement with the sewerage authority assessing a "host fee" for every 1,000 gallons of wastewater treated in McKeesport. The fee would generate $1 million in revenue for the city. Council President Darryl Segina voted against the measure, while Councilman Dale McCall, who sits on the authority's board, abstained.

Mayor Michael Cherepko said the host fee --- which was recommended to the city several years ago, but never enacted --- is the "first phase" toward closing the city's $1 million to $2 million annual budget deficit. The sewerage authority has assured the city that the cost of the fee will not be passed onto ratepayers, the mayor said.

In June, Gov. Corbett signed a new law that amended the rules governing authorities that requires any funds being spent by a municipal authority to be used only for a "service or project directly related to the mission or purpose" of that authority.

It's largely up to board members at authorities to decide whether an expenditure is part of their mission or purpose, said John Brosious, deputy director of the Pennsylvania Municipal Authorities Association.

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"The idea behind the law was to make sure that the money you're charging for a water or sewer bill is going to go directly to projects related to providing water and sewer to the community," Brosious told the Almanac. "Just because you're sitting on capital reserves doesn't mean you can give (them) away."

The law was written in the wake of a scandal in Harrisburg, where former mayor Stephen R. Reed received $8.3 million from the city's sewer and water authority to purchase artifacts for a "Wild West" museum. The bill passed both the state Senate and House without opposition.

Brosious said most of the complaints about authorities misspending money have been on a much smaller scale. Municipal authorities have been criticized for starting scholarship funds or making capital expenditures for volunteer fire departments, he said.

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"There have been some interpretations as to what the 'purpose and mission' of the authority covers," Brosious said. "We have had some in the past that have made contributions to a fire company or ambulance company for training for such things as confined space emergencies ... authorities felt that was in keeping with their mission if they have workers laying lines and their safety was at risk. That might be an appropriate expense."

Authorities have to be aware that the law also allows ratepayers to sue them in county Common Pleas Court if they feel that a payment to a municipality was unjustified. If a judge rules that an expense was outside of the authority's mission and purpose, the municipality is liable for reimbursing the authority in full, Brosious said.

"If you feel that your expenditure is defensible under the law, or under an interpretation of your mission or purpose, you have to be the one to decide," he said.

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State law generally intends for authority funds to be tied to services provided by that authority, Brosious said. "Are there auxiliary costs associated with providing those services?" he said. "Yes, and if you feel they're within the parameters of how you conduct business, you have to decide if they're defensible."

McKeesport officials said they were aware of the provisions of the law when the ordinance was drafted. They said the city's host fee is designed to reimburse the municipality in the wake of unprecedented expansion of the sewerage authority's treatment plant in the lower 10th Ward, which they said has damaged local streets, caused noise and odors for nearby residents, and removed properties from the tax rolls.

The host fee is also intended to reimburse the city for new federal Homeland Security mandates that have resulted in increased demands on city police and firefighters, Cherepko said.

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The city has asked the authority to consider amending its mission and purpose to make sure that it encompasses those items, Elash told the Almanac Wednesday. "We believe that even if they didn't, this host fee would be legal," he said.

Unlike a scholarship or the Harrisburg situation, the fee is intended to pay for services directly related to the authority's work, Elash said.

The new law also requires authorities that serve boroughs, cities or townships in more than one county to expand their boards of directors and appoint representatives from those other communities. The McKeesport authority serves East McKeesport, Glassport, Liberty, Port Vue, Versailles and White Oak boroughs and Elizabeth and North Versailles townships, and is adding Dravosburg and Duquesne as well.

Because all of those communities are within Allegheny County, Brosious and Elash said the McKeesport authority is not affected by that provision of the law.

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Tube City hard-hat tip to Alert Reader Brian for suggesting this story.

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