E.C., Callery need to assess overall cost of sewage dispute
With officials of Evans City and Callery boroughs locked in a sewage dispute that could end up in court, residents in both towns should be concerned about how much the legal battle might cost them.
Neither town is well-off financially, and unnecessary expenditures will make balancing their budgets more difficult without a tax increase — even if the cost of pursuing and defending against the lawsuit doesn’t involve inordinate sums.
Whatever the amount, it still will be money that should not have to be spent, if compromise were a higher priority.
Evans City Borough Council put the dispute on a path to the courthouse on Sept. 7 when council members voted unanimously to sue Callery, which has said it would try to block the sale of Evans City’s sewage treatment plant to the Evans City Water and Sewer Authority.
The boroughs have been engaged in a two-year disagreement over how much Callery should be paying to Evans City for sewage treatment. Callery bumped up the disagreement a notch in recent days by accusing Evans City of intentionally overcharging Callery for sewer service for more than 10 years.
On Sept. 7, not only did the Evans City council announce its intention to sue, but approved the sewage plant transfer, despite being aware of Callery’s opposition and intent to use a clause in the two boroughs’ sewage service agreement to stop the transfer from happening.
The clause in question says that Callery’s approval would be necessary if Evans City decided to transfer sewage and water facilities.
Callery is attempting to use that clause as leverage to obtain a more favorable sewage rate from Evans City, but Callery also has determined that Callery customers would save money if that borough would leave the Evans City treatment system and enter into an agreement with the Breakneck Creek Regional Authority.
With Breakneck’s sewage fees as an enticement, Callery has said it wouldn’t block the Evans City treatment plant sale if it were released from its about two-decades-long agreement with Evans City.
But Evans City doesn’t want to lose Callery customers’ revenue. At the same time, Evans City faces being in violation of an agreement with the state Department of Environmental Protection if it cannot proceed with upgrades to its plant.
Evans City doesn’t have the borrrowing window for the $7.7 million plant upgrade. That’s why Evans City wants to transfer plant ownership; the water and sewer authority does not have a debt cap that would prohibit the upgrade investment.
From Evans City’s perspective then, it’s essential that the dispute be put to rest. While Evans City might lose revenue from Callery’s departure, it also stands to lose significantly if Callery blocks the sale and DEP assesses fines on the borough for failure to upgrade the plant.
The authority’s ownership of the treatment plant, with revenue from the authority coming to the borough for 30 years, is the better deal for Evans City. However, the transfer approved by the council will be meaningless if a judge rules against Evans City’s action.
Mike Gallagher, Evans City solicitor, has called Callery’s stance reckless, unreasonable and unconscionable and an attempt to hold Evans City residents economic hostages.
Meanwhile, Tom Smith, Callery solicitor, has said Callery officials would continue to try to block the transfer unless an agreement between the two towns can be worked out — which is possible, if officials of both towns work hard enough to achieve an accord.
A court battle won’t improve relations between the boroughs.
No doubt residents of the two boroughs have been following the escalation of the dispute, but they might not have been acknowledging the financial impact they could face by way of their tax bills.
Residents of the two boroughs would do well to think about that potential cost and whether they’re willing to pay it.
