Sewer Authority Sale Costs $3 Million in Legal Fees

SCRANTON — How many lawyers does it take to sell a public sewer authority to a utility?

The answer is 50, according to the billing invoices Newswatch 16 obtained from the Scranton Sewer Authority

But whatever those lawyers did to earn those fees, is being kept private.

Scranton City Council member Bill Gaughan calls the legal fees staggering. He says when Scranton chose to sell the Scranton Sewer Authority to Pennsylvania American Water for $195 million, no one told city leaders it would cost so much, for so many lawyers.

“It was a frenzy for the attorneys and consultants in the deal,” said Gaughan.

Pages of billing invoices from the sale show eight law firms, 50 lawyers, and a bill of over $3.1 million.

“The lawyers and consultants made out like bandits,” Gaughan said.

The legal fees paid by the Scranton Sewer Authority amount to 1.5 percent of the total sale price.

That’s a lot when compared to a similar transaction near Philadelphia.

Limerick Township in Montgomery County is selling its sewer authority to Aqua Pennsylvania Wastewater** for $71.5 million. Legal bills for the Limerick Sewer Authority will be capped at just over $200,000 and only two law firms are involved.

So why did the Scranton Sewer Authority spend more than 15 times* as much in legal fees and what did all those lawyers do?

We don’t know. Details on the legal bills were redacted, kept from the public.

When we asked why, sewer authority director and chief counsel Jason Shrive says the descriptions are part of attorney-client privilege and releasing them would violate confidentiality.

“I can tell there are concerns about the bills because they seem to overdo it with the redactions,” said John Toothman.

Newswatch 16 used Skype to talk to John Toothman from his office near Washington DC. He heads the legal advocacy group devilsadvocate.com.

Toothman believes most parts the billing statements should be made public because the sale was finalized this past December. He also questions why so many law firms had a hand in the sale of the Scranton Sewer Authority.

“Lawyers are business people, too, and one of the things that happens is, they can sense when there’s an opportunity to make some money,” said Toothman.

More than half of the $3.1 million in legal fees went to Buchanan Ingersoll, a law firm based in Philadelphia where legal fees are the highest in the state.

Two lawyers from that firm were paid more than $800 an hour for their work.

Another lawyer from that firm billed the authority $770 an hour, for working 160 hours in one month.

“$123,816 for a month’s work? For a month’s work,” Gaughan asked.

Newswatch 16 and other news organizations have appealed to the state office of open records to get an account of what the lawyers did to earn all that money.

Jason Shrive, who is currently both the executive director of the Scranton Sewer Authority and its solicitor during the transition from the sale, said he would not comment on the legal fees while the open-records appeal remains active.

*In terms of actual dollars, the $3.1 million the Scranton Sewer Authority paid in legal fees is 15 times more than the approximately $200,000 paid by the Limerick Sewer Authority. As a percentage of the total sale price, Limerick’s legal fees amount to 0.3 percent, or about 5 times less than the 1.5 percent paid by the Scranton Sewer Authority.

** 5/4/17 – Corrected to show Limerick Sewer Authority was sold to Aqua Pennsylvania Wastewater and not Pennsylvania American Water.

11 comments

  • ***

    “no one told city leaders it would cost so much, for so many lawyers”……im from Wanye County so I don’t really get a say, but next time you all vote..can you vote people in that have common sense? Did they think the work would be free or cheap?…..im speechless. 100% agree that Scranton gets everything it deserves and it sad because Scranton has so much potential and history but none of that matters when money talks and corruption is at an all time high.. That

  • Irish lass

    This is the second go around with a Sewer Authority sale or rental. Remember the managing company that came in from Massachusetts. There were 4 count them; 4 separate contracts drawn up by a score of lawyers. This is how they make their money by scamming us. It is sinful and there ought to be a law regarding public utilities and privatization. Damn them all.

  • TheTruth

    The real question is who stands to gain from this sale? Who owns the company buying the sewer plant? Will tax payers see a reduction in taxes? Follow the money its all dirty.

    • john williams

      PAWC part of American Water, now a German-Owned company. Fees will definately increase as there will be more spending to bring the system in compliance with PA Dept of Enviornmental Protection, aka the Gestapo of Pennsylvania!

  • Lloyd Schmucatelli

    The most expensive attorney I’ve ever used was $300 an hour. That’s high for this area. So that’s 10,000 hours comparing apples to apples.

    With that rate, you keep the conversations short.

    People in charge of things like city sewer companies have no experience in running profitable businesses.

    This is insider money and cronyism.

    Garbage in, garbage out…

    Not that I care all that much. It’s a known fact we are a corrupt society!

  • Martin Devon

    NEPA is the devils backyard. I only check the news there waiting for something very bad to happen

  • Marty Marsh

    I guess you folks are not up on keeping the money wheel turning. Nothing is simple any longer when dealing with any government.

Comments are closed.