History of the PCMA

Formerly Lake Wynonah Municipal Authority
(Compiled from Recorded Court Documents and Other Sources)

In 1970, a corporation from Memphis, Tennessee by the name of American Realty Service Corporation contacted the law firm of Zimmerman, Lieberman & Derenzo. American Realty was in the business of building second-home developments in the eastern part of the United States and had already completed two in Pennsylvania, but it wanted to develop a third in southern Schuylkill County. Zimmerman, Lieberman & Derenzo was engaged to perform the title search for American Realty to purchase the 36 properties needed to develop what became Lake Wynonah. At the time, American Realty had attorneys in Washington taking care of the Federal Interstate Land Sales Act requirements and had attorneys in Harrisburg addressing Public Utility Commission (PUC) and other state-related regulatory matters. As the project progressed, Zimmerman, Lieberman & Derenzo was asked to take care of matters at a local level. Because Lake Wynonah is situated in two Townships (one-third in Wayne, two-thirds in South Manheim), the zoning changes and other planning measures required for the project needed to be duplicated and were better handled by a local law firm.

American Realty was a holding company owned by one man (Edward Rhen) in Memphis, Tennessee. American Realty had wholly owned subsidiaries for its projects. Initially, there were two for the Lake Wynonah Project. The primary wholly owned subsidiary was a corporation named Lake Wynonah, Inc., which was the entity that acquired title to all the properties needed for the Lake Wynonah project. It was also the entity that initiated the construction of the Lake Wynonah development by building 32 miles of roads; creating the two lakes; and constructing the dams, marina, lodge, swimming pool, and playgrounds. All the facilities were constructed and installed by Lake Wynonah, Inc. as the property owner and developer of the project. The second wholly owned subsidy was Lake Wynonah Utilities, Inc. which was separate and distinct from Lake Wynonah, Inc. because it was a PUC certified corporation that was going to operate the water system. The water system piping was installed by Lake Wynonah, Inc. (the developer) in the course of constructing the 32 miles of roads. As the roads were constructed, water lines in the right-of-way of the streets were installed at the same time.

There are 2,643 lots in Lake Wynonah. American Realty was a highly organized entity that had successfully built at least 50 prior developments across the United States. Lake Wynonah, Inc. (one of American Realty's subsidiaries) started selling some of these lots and by the early part of 1974 all of the lots available for sale were either sold in terms of having been paid for in full, or were under contract to be sold. Lake Wynonah, Inc. had its own sales people (characterized as "dirt salesmen") who did all the negotiating with buyers from 1970 to 1974. Once all the available lots were sold or under agreements of sale, American Realty pulled out of the project.

Because Lake Wynonah, Inc. realized that its part of the Lake Wynonah project would end with the selling of all available lots, it wanted to make sure that entities would be in place to continue the operation of the development at the completion of all of the facility construction. Zimmerman, Lieberman & Derenzo was engaged to set up several entities. One of the entities was the Lake Wynonah Property Owners' Association (LWPOA), a typical non-for-profit organization common to developments such as Lake Wynonah. Another entity was the Lake Wynonah Municipal Authority. Lake Wynonah, Inc. had worked closely with the supervisors of both Wayne and South Manheim townships, and the supervisors agreed to establish a joint municipal authority. The law firm of Zimmerman, Lieberman & Derenzo was asked to do the legal work related to framing the necessary resolutions and articles of incorporation to form the Authority.

In 1970, the Lake Wynonah Municipal Authority (LWMA) was incorporated and set up under the Pennsylvania Municipal Authorities Act of 1945. Initially, it was meant to operate as a sewer authority only. As the sales people for Lake Wynonah, Inc. sold each property, the sum of $250 per lot was set aside and put into an escrow account with the idea that when a municipal authority was formed, the funds would be turned over to the authority for the purpose of constructing a sewage treatment plant.

Contractor Nobel "Bud" Quandel built the sewage treatment plant in the mid-70s. Because Lake Wynonah was initially intended to be a second-home development, and because of the myriad of hills in the Lake Wynonah development, Lake Wynonah, Inc. did not think it was feasible to install a public sewage collection system (central sewage). The Pennsylvania Department of Environmental Resources (now called the Pennsylvania Department of Environmental Protection, or DEP) allowed home builders to utilize holding tanks for sewage collection as a temporary measure. The $250 per lot that was set aside was used to build the sewage treatment plant and purchase a pump truck to remove sewage from the holding tanks and transport it to the treatment plant for processing.

After concluding its successful association with the Lake Wynonah project (it saw approximately $10,000,000 in profits), American Realty became involved in another similar project in Atlanta, Georgia. The project was a complete failure and American Realty filed bankruptcy. An attorney in Memphis, Tennessee (American Realty's headquarters) by the name of Freeman Marr was appointed by the federal court as the trustee in the bankruptcy. There were few assets remaining in Lake Wynonah, Inc. (an American Realty subsidiary) at the time of the bankruptcy filing. What remained was previously sold off or turned over to the LWMA and the LWPOA. All properties or easements relating to sewage were turned over to the LWMA; all lots intended for common benefit and all amenities (roads, lakes, dams, marina, swimming pool, lodge, playgrounds) were turned over to the LWPOA.

When Lake Wynonah, Inc. and American Realty Service Corporation pulled out of Lake Wynonah in the spring of 1974, all assets had been distributed except the water system which was owned and operated by Lake Wynonah Utilities, Inc. They retained the water system and utilities because it represented a source of revenue. But when American Realty filed bankruptcy, all of its subsidiaries were pulled into the proceedings. As a result, Freeman Marr had assets all over the eastern part of the United States that he had to dispose of as the trustee in the bankruptcy. One of these remaining assets was the very small water system for Lake Wynonah which was owned by Lake Wynonah Utilities, Inc. He contacted the law firm of Zimmerman, Lieberman & Derenzo and told Ron Derenzo (a partner of the law firm) that he'd had no success in selling the water system and wanted to know if Ron knew anyone who might be interested in purchasing it.

Ron knew of no one interested in purchasing the water system because it was such a small operation. At that point, there were 200 or less homes in Lake Wynonah and the majority of those homes were used only in the summer or on weekends. Homeowners, vacant lot owners, and others who had any connection with Lake Wynonah were concerned that their investments would go down the drain if an operating water system wasn't in place. At that point, and with some reluctance, the LWMA indicated it would be willing to take over the water system. But there was a problem. The LWMA had no money and it had no legal right to operate a water system.

In order for the LWMA to take over operation of the water system, the supervisors of both Wayne and South Manheim townships had to adopt the necessary resolutions (which they did). Freeman Marr was willing to sell the water system for $750,000 knowing that there would be no actual cash involved. The Ballard Spahr firm in Philadelphia was hired as the LWMA's bond council and a bond issue was prepared. It was truly a "paper closing" because no money passed hands. The LWMA issued $750,000 in bonds in exchange for all assets of the water system from Lake Wynonah Utilities, Inc. (the water system company) and Lake Wynonah Utilities, Inc. (a private utility company subject to PUC regulation) was immediately defunct. A decertification of any PUC regulations was performed and in 1977 the LWMA (a local government entity not subject to PUC regulations) became a water Authority in addition to a sewage Authority.

The LWMA was required to pledge its water revenues to pay off the bonds because it had no other monies except sewage income which was designated strictly for sewage expenses. The water bonds were subsequently paid off in 1995.

On December 30, 2009 the Lake Wynonah Municipal Authority changed its name to Plum Creek Municipal Authority.