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BUTLER AREA SEWER AUTHORITY v. NORTHWEST SANITARY SEWER SYSTEM AUTHORITY (08/27/71)

decided: August 27, 1971.

BUTLER AREA SEWER AUTHORITY
v.
NORTHWEST SANITARY SEWER SYSTEM AUTHORITY



Appeal from the final decree of the Court of Common Pleas of Butler County, Ms. D. 35 September Term 1969, in case of In re: Northwest Sanitary Sewer System Authority, a Municipal Authority, v. Butler Area Sewer Authority, a Municipal Authority.

COUNSEL

Lee C. McCandless, with him Frank P. Krizner and McCandless, Chew & Krizner, for appellant.

Richard L. McCandless, with him Coulter, Gilchrist, Dillon & McCandless, for appellee.

President Judge Bowman and Judges Crumlish, Jr., Kramer, Wilkinson, Jr., Manderino, Mencer and Rogers. Opinion by Judge Rogers. Judge Manderino dissents. Concurring and Dissenting Opinion by Judge Mencer.

Author: Rogers

[ 3 Pa. Commw. Page 78]

This is an appeal from an order of a court of common pleas granting the prayer of a petition of a municipal authority for judicial approval of the payment of money of the Authority to owners of properties assessed

[ 3 Pa. Commw. Page 79]

    for benefits conferred by the construction of a sewer by the Authority.

Here, as is often the case in public matters, although an air of urgent controversy pervades the proceedings, the material facts are not in dispute.

The City of Butler and the Township of Butler jointly owned and operated a sewage system. In about 1959, the township, desiring to serve additional areas, created two municipal authorities, the South Butler Township Authority and the Northwest Sanitary Sewer System Authority (Northwest), which latter authority only is involved in this suit. Northwest was unable to construct sewer lines because the treatment plant and trunk sewers owned by the city and the township lacked capacity to dispose of additional sewage. Thereupon, the city and the township created a joint authority named the Butler Area Sewer Authority (Butler Authority) to which they assigned all sewage facilities together with their right to receive a grant of Federal funds for enlargement of the treatment plant in an amount in excess of $1,200,000. Butler Authority with the money from the grant and by the sale of bonds then spent more than $3,000,000 enlarging its treatment plant and trunk lines to accommodate the sewage of Northwest and the South Butler Authority.

Northwest applied for and received approval of a Federal grant for a part of the costs of construction of the lines necessary to serve its area. The grant was, however, by regulation of both the State Department of Health and the Federal agency involved conditioned upon Northwest's having a satisfactory arrangement for the disposal of the sewage to be collected in its lines. This was accomplished by a written agreement between it and Butler Authority. By this, Butler Authority agreed to treat the sewage collected in Northwest's lines and to operate and maintain Northwest's system

[ 3 Pa. Commw. Page 80]

    at its, Butler Authority's, expense. It reserved the right to charge customers of the lines to be constructed by Northwest at a rate uniform throughout the Butler Authority system and the right to make and enforce rules, regulations and rates applicable throughout the system. Northwest agreed that Butler Authority should be the sole and exclusive agency for Northwest's sewage treatment service and the maintenance of its, Northwest's, properties; that Butler Authority would be entitled to any charges made for connections to Northwest's lines; that such charges would conform with Butler Authority's rules, regulations and rates; and that all construction and additions and extensions to Northwest's lines should be inspected and approved by Butler Authority. The final operative paragraph of the agreement, and the only reference therein as to its duration was as follows: "It is mutually agreed by and between the parties that this Agreement shall continue so long as the party of the second part [Northwest] shall have an outstanding indebtedness, or if the second*fn1 [sic] party should assume any unpaid balance, then in that event, without further action on the part of either party all sewer lines, trunk lines, equipment and right of ways, or realty, to wit, all assets of the second party become and remain the property of the first party." Northwest constructed its sewers at a total cost of about $723,000. Of ...


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