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Coaldale declares street light firm in default of pact

Published May 11. 2011 05:01PM

Coaldale council on Tuesday voted unanimously to declare a Lackawanna street light management firm in default of its contract.

A letter informing Municipal Energy Managers of Moscow of council's action is poised to be sent to the firm by solicitor Michael Greek. MEM promises big savings by having municipalities buy their street lights from PPL, then hiring MEM to maintain them.

Coaldale is among several municipalities that are frustrated with MEM's alleged lack of follow-through. Lansford, Nesquehoning and Tamaqua have also discussed what officials say is the firm's failure to fulfill its promises.

Efforts to reach MEM representatives were unsuccessful Wednesday.

Under the terms of a contract the borough signed with MEM in February 2009, Coaldale would save $213,346 in street lighting costs over 20 years. MEM promised to negotiate with PPL for the borough to buy the lights, and MEM would upgrade and maintain the lights for a flat annual fee through 2037.

PPL would still own the poles and provide the electricity.

At the time, the borough had been leasing its street lights from PPL for $28,000 a year.

But by mid-2010, Coaldale officials were concerned because MEM was not keeping its end of the bargain. The firm, they say, has failed to make the interest payments on $158,460 of a $182,400 loan the borough took out to implement the conversion, as it had promised.

The payments come due twice a year, in December and in June. After the firm failed to come through with the December payment, the borough was forced to scrape together $6,000 to pay the bill.

Further, MEM has ignored the borough's attempts to contact them through telephone calls, letters and email messages, secretary Louise Lill has said.

The company has also failed to respond to her messages about faulty street lights. PPL subsequently fixed the problems.

In March, borough Councilman David Yelito joined officials from other boroughs to meet with MEM, but the talks, Yelito said at a March 9 public meeting, were fruitless.

MEM has contended PPL was dragging its feet on the transfer of street lights to the boroughs.

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