Oil City is looking into the option of selling its wastewater treatment plant and sewage/stormwater collection system to help stabilize the financial state of the city.
Mayor Bill Moon Jr., along with councilmen Dale Massie, Isaiah Dunham and Ron Gustafson, voted during Thursday’s city council meeting to solicit bids for the properties.
Councilman Michael Poff cast the lone vote against the motion.
“I still think it’s an awful idea,” Poff said.
Poff said he appreciates creative thinking, but he does not think it is in the best interest of the city to sell its resources.
City manager Mark Schroyer has said he believes Oil City is a textbook case of a city in decline, and this is an option he thinks should be looked into for the sake of avoiding any tax increases.
“This may be our only salvation, albeit short term,” Schroyer said. “This may get us 10 years of financial stability.”
Schroyer said once the bids are received, the city will look to see if they meet expectations before moving forward to consider the sale any further.
“It’s a major consideration for the city,” Schroyer said. “We are talking millions of dollars…Unfortunately, a lot of financially distressed municipalities in Pennsylvania are being faced with difficult decisions like this one. There are not many moves to make in Oil City.”
In the past year, the city has had to spend $400,000 on unexpected repairs to the facilities, and about $10 million in repairs are needed at the North Side pump station and the treatment plant.
Schroyer said selling the treatment plant and collection system would eliminate the need for those projects, immediately saving the city $10 million, which could be used to pay off about $5 million of a total of $15 million the city borrowed to tackle water/sewer issues.
Schroyer said the remaining money would be used for much-needed water projects.
Gustafson said he was skeptical about the idea at first, but he said he doesn’t think the customer base in Oil City is large enough keep up with the rising costs of maintaining the system.
In addition, Gustafson said he thinks implementing a tax increase would be detrimental to the city because it would make Oil City a less attractive place to potential homeowners or businesses.
Schroyer said a larger company taking over the plant and system would have multiple advantages, including making the property taxable.
He also said he thinks residents’ bills could go down in the long run because a larger entity would be able to spread costs over its entire customer base.
Massie said he fears if the city does nothing, the problem might only get worse.
“I don’t think we have a lot of alternatives right now,” he said.
