According to the release, borough officials have spent more than a year reviewing engineering reports, financial records, infrastructure conditions, regulatory requirements, and historical operating practices related to the wastewater system. Borough leaders say the review has revealed one of the most significant infrastructure and financial challenges facing the community.
Millions in Debt and a Plant That Was Never Built
Among the findings, officials said previous administrations borrowed more than $1.2 million through interim financing for engineering, planning, and design work for a proposed new wastewater treatment plant that ultimately was never constructed. The borough also identified approximately $300,000 in engineering-related invoices tied to the abandoned project and remains responsible for an additional loan of about $335,000 for equipment purchased during prior administrations.The borough estimates the combined interest on those inherited obligations now costs taxpayers approximately $250 per day, diverting money that could otherwise support roads, parks, public safety, and other municipal services. Officials said they are working with lenders, financial professionals, and legal counsel to restructure or resolve those debts while attempting to restore the borough's financial stability.
Officials noted that while millions were spent on planning, construction costs for a new treatment plant have since risen dramatically, from an estimated $25 million to nearly $40 million, because of inflation, increased labor and material costs, and changing federal requirements.
Deferred Maintenance and Operational Concerns
The borough's review concluded that the wastewater treatment plant received little meaningful capital investment over several decades, with maintenance, equipment replacement, and modernization repeatedly postponed. Officials believe that lack of investment significantly contributed to the deteriorating condition of the facility and increased the cost of bringing it into compliance with modern environmental standards.
The release also outlines historical operational concerns that have been referred to a forensic accountant and appropriate investigative and regulatory authorities.
Among the allegations being reviewed are claims that certifications belonging to retired wastewater operators were displayed or relied upon for regulatory compliance after those individuals were no longer actively working at the facility. The borough also reported finding records indicating public funds may have been paid to certain individuals who allegedly were not actively performing wastewater plant duties during the periods in question. Officials emphasized that these matters remain under review and that no final legal determinations regarding responsibility or criminal conduct have been made.
Forensic Audit Underway
In addition to examining the condition of the treatment system, the borough's forensic review is evaluating historical contracts, invoices, expenditures, payments, and operating practices.
Officials said the completed audit is expected to provide residents with a clearer understanding of how public funds were managed and identify any financial irregularities that warrant additional review. The borough said findings will be shared publicly to the fullest extent permitted by law while cooperating with any ongoing investigations.
Borough Rejects Sewer System Sale
The release addresses one question officials say they frequently hear: why not simply sell the sewer system?According to the borough, officials explored that possibility and had the system evaluated by Aqua. The evaluation placed the system's potential value at approximately $1.5 million, an amount officials say is less than the financial obligations tied to the wastewater system. Borough leaders concluded that such a sale could leave taxpayers responsible for substantial remaining debt while giving up ownership of a critical public utility.
Officials also estimated that privatization could result in residential sewer bills increasing to approximately $300 to $350 per quarter, though they stressed that figure is only an estimate based on market research and not a guaranteed future rate.
The borough further cited its experience following the sale of the Municipal Authority of the Borough of Shenandoah (MABS), saying inherited financial obligations and increased water costs have influenced its decision-making regarding any future utility sale.
Focus Shifts to Rehabilitation
Rather than pursuing a sale, borough officials and the Shenandoah Sewer Authority are focusing on rehabilitating and modernizing the existing wastewater treatment plant.
The borough said it is aggressively pursuing grants, low-interest financing, engineering alternatives, and other funding opportunities to reduce costs for taxpayers while developing what officials describe as a technically sound and financially sustainable solution.
An important next step will involve discussions with the Pennsylvania Department of Environmental Protection (DEP) and the U.S. Environmental Protection Agency (EPA) regarding the borough's existing consent order. Officials hope to present an alternative plan that would allow rehabilitation of the current facility instead of requiring construction of an entirely new treatment plant. They acknowledged that any changes would require regulatory approval.
Commitment to Transparency
Borough officials said transparency will remain a priority throughout the process, with additional information to be released as reviews are completed and as legally permitted. They said the goal is not only to understand what led to the current situation but also to ensure future decisions involving millions of dollars in public funds are made with accountability and proper oversight.
The release also includes statements from Shenandoah Sewer Authority Chairman Bob Shumski, Borough Council President Joe Boris, and Borough Manager Mike Cadau, each reaffirming the borough's commitment to finding an affordable, environmentally compliant, and financially responsible long-term solution while protecting local taxpayers.
Leadership Statements
Shenandoah Sewer Authority Chairman Bob Shumski“The Sewer Authority recognizes the magnitude of the challenges before us, but we are committed to finding a responsible long-term solution. Protecting public health, maintaining environmental compliance, and providing reliable wastewater service remain our priorities.
We will continue working with the Borough, engineers, DEP, EPA, financial professionals, and funding agencies to evaluate rehabilitation of the existing infrastructure and to identify the most cost-effective solution available. Every decision must consider both environmental responsibility and affordability for the residents who ultimately pay for this system.”
Shenandoah Borough Council President Joe Boris
“Borough Council understands that the decisions being made today will affect Shenandoah for decades. We cannot change decisions made in prior years, but we can insist that decisions moving forward are transparent, documented, fiscally responsible, and made in the best interests of our residents.
Council remains committed to protecting taxpayers, preserving essential public infrastructure when financially feasible, aggressively pursuing grant funding, and supporting a long-term solution that places Shenandoah in a stronger financial position.”
Borough Manager Mike Cadau
“These challenges developed over many years and cannot be solved overnight. Our responsibility is to solve problems, not ignore them. We have evaluated the options, including selling the sewer system, but the financial realities do not support accepting a sale that could leave taxpayers with substantial remaining obligations while surrendering a critical public asset. We also have to learn from what occurred with MABS.
Our approach is to put the facts in front of the public, work with our engineers, financial professionals, DEP and EPA, aggressively pursue outside funding, and determine whether the existing plant can be rehabilitated in a way that protects taxpayers and satisfies environmental requirements. We will continue demanding transparency and accountability while working toward a solution that Shenandoah can actually afford.”