This story was produced by the State College regional bureau of Spotlight PA, an independent, nonpartisan newsroom dedicated to investigative and public-service journalism for Pennsylvania. Sign up for our north-central Pa. newsletter, Talk of the Town, at spotlightpa.org/newsletters/talkofthetown.
FERGUSON TOWNSHIP — Last year, the State College Borough Water Authority tried to start negotiations to buy the troubled Rock Spring Water Company, but a sale never materialized.
The water authority attempted to obtain “a letter of intent to negotiate the sale” of the private company in May 2023, according to emails acquired by Spotlight PA.
Spotlight PA obtained the emails after the water authority denied a public records request seeking its communications with and about Rock Spring. After the newsroom successfully appealed the denial to the state Office of Open Records, the water authority provided redacted emails between Rock Spring and township officials, but was later directed by the Office of Open Records to send its emails with the private company unredacted.
Robert Mix, the water authority’s solicitor, told the state Office of Open Records in a June 4, 2024, letter that “contract negotiations have not been completed” and the water authority hasn’t “made a final decision in this matter.”
A recent Spotlight PA investigation revealed that systemic water loss has plagued Rock Spring, which serves roughly 500 properties in a rural part of Ferguson Township, for more than a decade.
The current water system, estimated to be at least 50 years old, needs $13.5 million in repairs, according to a 2022 engineering report commissioned by the municipality. Ferguson Township does not oversee Rock Spring, but local officials have tried to find ways to resolve the company’s issues on behalf of residents.
The report — compiled by Altoona-based firm Gwin Dobson & Foreman Engineers and obtained by Spotlight PA — identified the State College Borough Water Authority as “the only logical entity capable” of taking over Rock Spring. The water authority has acquired local systems in the past, but it cannot force a sale.
Rock Spring’s owners previously approached the water authority about a sale in 2008, but the private company rescinded the offer two months later, per public records.
According to the emails obtained by Spotlight PA, Brian Heiser, the water authority’s executive director, contacted a Rock Spring representative in May 2023 asking for an update on “a letter of intent to negotiate the sale” of the company. He also requested permission to speak with the company’s engineers. Heiser declined to comment for this story.
The Rock Spring representative, whose full name and title were not included in the emails, responded that the letter of intent was in progress but needed a review from their lawyer.
“Thank you for the update. Do you know when you may have the letter of intent provided to SCBWA? We are in a position where we need it ASAP because the window for us to obtain funding for this is closing quickly,” Heiser replied. “We can’t apply for funding without the agreement between Rock [Spring] and SCBWA in place.”
The company representative wrote back that a timeline for the letter wasn’t confirmed and granted permission for the water authority to contact Rock Spring’s engineers.
It’s unclear what happened after the exchange.
Rock Spring has been a family business since its founding in 1947. It continues to hemorrhage water each year despite being told by state regulators to reduce water loss. When the company last increased its rates more than a decade ago, regulators told the owners to make efforts to find a buyer to take over Rock Spring’s operations.
The company previously told Spotlight PA that customers are responsible for finding leaks on their properties and scheduling repairs. Rock Spring also said that customers haven’t cooperated with that directive.
When asked about finding new owners and talks with the water authority, a Rock Spring representative, who didn’t provide their name or title, told Spotlight PA in a July 18 email that addressing leaks “is more important at this time.”
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