Updated: September 27, 2023
Increased costs due to higher Philadelphia Water Department rates offset by sound financial planning
WARRINGTON, PA – The Bucks County Water and Sewer Authority (BCWSA) Board of Directors today approved the authority’s sewer budget for 2024 with no rate hike for customers. The $78.9 million budget absorbs higher costs for treatment services through strategic financing and positive returns.
Services for sewage treatment are expected to increase by $2.7 million over last year. A significant portion of the increase is due to the Philadelphia Water Department’s (PWD) almost 25 percent rate increase for its contracted services with BCWSA, which sends wastewater from lower Bucks County to a treatment facility in Philadelphia.
According to BCWSA’s CEO Benjamin W. Jones, the authority’s ability to mitigate the increase with no rate adjustment is attributed to the estimated debt service for 2022 issuance being higher than the actual because of financing adjustments and the capitalization of interest.
“The better than anticipated borrowing rates and ability to maintain our debt services allow us to absorb the additional cost from PWD,” said Jones. “We also realized better than projected investment returns from overall higher interest rates.”
Jones continued, “We structured the financing this way in anticipation of increases from the PWD and the unknown inflation costs.”
Last year, BCWSA dedicated $155 million in capital expenditures to make significant upgrades and repairs across its sewer system. These expenditures fall under the authority’s debt service payments within the recently approved budget. BCWSA pays down the debt in part through rate increases that were approved and initiated last year.
“The long-term reliability and vitality of BCWSA services is entirely dependent on the Authority’s ability to repair, replace and expand the systems’ infrastructure,” said Jones. “We’ve made significant progress to ident improve our infrastructure in a short period of time.”
While no retail or wholesale customers will incur rate increases as part of this year’s budget, Warrington Township’s rates will be adjusted up to current BCWSA retail rates. BCWSA purchased Warrington’s sewer system in 2019 and the agreement included a four-year rate freeze. Warrington customers will now benefit from an integrated BCWSA rate structure as part of the authority’s larger system.
In addition, the BCWSA Board of Directors approved a $17.5 million water budget for 2024, almost equal to last year’s budget with no rate increases anticipated.