Pennsylvania-American Water Company purchase of Coatesville water and wastewater assets final

Pennsylvania-American Water Company (PAWC) and the City of Coatesville announced that the long-awaited sale of the City of Coatesville Authority (CCA) water and wastewater assets to PAWC is now final.

HERSHEY, Pa., March 22, 2001 — Pennsylvania-American Water Company (PAWC) and the City of Coatesville announced that the long-awaited sale of the City of Coatesville Authority (CCA) water and wastewater assets to PAWC is now final.

Closing the $48.225 million transaction came more than two years after the sales process began.

"Today, we celebrate the beginning of a new partnership between the associates at Pennsylvania-American and the citizens of the greater Coatesville area," said Robert M. Ross, president and CEO of Pennsylvania- American. "We have waited with great anticipation for this day to arrive, and today I am pleased and honored to officially welcome the men, women and children of the greater Coatesville area to the Pennsylvania-American water system family. We are grateful for the opportunity to serve the citizens of these communities and we look forward to providing our newest customers with the highest quality water and service possible."

The purchase expanded Pennsylvania-American's service territory to include an additional 8,600 water customers and 6,500 wastewater customers in 16 municipalities in Chester and Lancaster counties bringing the number of communities served by the company to 317 municipalities in 33 counties across the state.

The Coatesville system stretches 24 miles from Caln Township in Chester County to Quarryville Borough in Lancaster County. Two treatment facilities, Rock Run and Octoraro, provide the capability of supplying seven million gallons of water a day. The wastewater system serves eight communities with the treatment facility located in South Coatesville Borough.

"The acquisition marks one of the largest combined water and wastewater privatization in the history of the industry," said Ross. "More importantly, the benefits derived from the transaction will be widespread."

Municipal officials echoed this remark. "The authority board and city council voted in favor of the sale of authority assets over one year ago, because we knew it was in the best interest of the citizens and the community at large," said Ted Reed, former executive director of CCA and newly appointed manager of Pennsylvania-American's Southeastern Operations.

After paying the debts of CCA, the city will receive between $37 and $38 million. "Our vision all along has been to invest the monies generated from the sale to maximize the return for the citizens," said Stephon Hines, president of Coatesville City Council. "Today, this vision has become a reality." At 5 percent, it is estimated that the money invested will earn $1.8 million annually, which will be put back into the community and used to reduce taxes, improve infrastructure and promote economic development.

Specifically, the city proposes to cut the earned income tax from 2 percent to 1 percent; reduce real estate taxes by 1 mill; and do away with occupational privilege taxes. The cuts will save residents an estimated $1.1 million a year. In addition, the proceeds will help fund city efforts, such as the 24-hour multipurpose recreation and activities center to be located in downtown Coatesville and the business enterprise development program, and provide annual funding for the capital reserve fund and the rainy day fund.

Another cost savings to the customer will come as a result of what is termed service laterals. As part of the sale, Pennsylvania-American agreed to assume responsibility for maintaining water and sewer laterals from the main in the street to the curb or property line, for those who dedicate their lines to CCA. Typical costs to repair or replace laterals range from $2,000 to $4,000. Previously, this was the responsibility of the customer.

"A letter and dedication form were mailed to all CCA customers in December, providing them with the opportunity to dedicate their water and wastewater laterals to CCA," said Reed. "To date, over 6,100 customers have responded, and I would encourage those who have not done so already to return the form while they still can." Customers can still dedicate their service laterals up to 90 days following the close of the sale. For a copy of the Lateral Dedication Form, call (800) 565-7292 (PAWC).

Now that the sale is final, customers can also take advantage of Pennsylvania-American's convenient payment options, such as the company's Automatic Payment Program, whereby customers can pay for their water bill directly from their checking or savings account; pay by credit card; or at Pennsylvania-American's offsite payment locations. Pennsylvania-American has made arrangements with Smitties located at 602 East Lincoln Highway and Charlies Thriftway at 154 Airport Road to accept Pennsylvania-American payments. Pennsylvania-American will also continue to accept walk-in payments at the office located at 114 East Lincoln Highway.

"Pennsylvania-American intends to provide the same high level of service to residents and businesses in the greater Coatesville area that our current customers enjoy — service we feel our customers expect and deserve," said Ross. "Completing the purchase of the City of Coatesville Authority assets is a truly momentous occasion. We also look forward to building and maintaining quality relationships in the region and becoming an active member of the community."

Pennsylvania-American Water Company, a subsidiary of American Water Works Company (NYSE: AWK - news), is the largest regulated water company in the United States. The Company owns and operates 32 surface water filtration plants with a combined capacity of 332 million gallons of water per day. More than 7,500 miles of water transmission and distribution lines deliver high quality water to more than 2 million Pennsylvanians. American Water Works Company (NYSE: AWK - news) is the largest and most geographically diverse investor-owned water utility business in the United States. The Company's utility subsidiaries and affiliates now serve approximately 10 million people in 23 states.

SOURCE: Pennsylvania-American Water Company

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