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TAMAQUA BOROUGH v. RUSH TOWNSHIP SEWER AUTHORITY (10/12/84)

decided: October 12, 1984.

TAMAQUA BOROUGH, SCHUYLKILL COUNTY, AND TAMAQUA BOROUGH AUTHORITY, APPELLANTS
v.
RUSH TOWNSHIP SEWER AUTHORITY, APPELLEE



Appeal from the Order of the Court of Common Pleas of Schuylkill County in the case of Tamaqua Borough, Schuylkill County and Tamaqua Borough Authority v. Rush Township Sewer Authority et al., No. S-488, March Term, 1977.

COUNSEL

Jeffrey P. Bowe, Bowe, Lisella and Bowe, for appellants.

John T. Pfeiffer, III, Pfeiffer, Brown & Baldwin, P.C., with him, Paris J. DeSantis, DeSantis & Menconi, for appellee.

Judges Craig, Barry and Blatt, sitting as a panel of three. Opinion by Judge Blatt.

Author: Blatt

[ 85 Pa. Commw. Page 422]

Tamaqua Borough and the Tamaqua Borough Authority appeal here an order of the Court of Common Pleas of Schuylkill County which held that a fee of $80.00 per equivalent dwelling unit (EDU) per year was a proper rate to charge Rush Township Sewer Authority (Rush Authority) pursuant to a contract it had with Tamaqua Borough for the treatment of its sewage.

Sometime in February of 1964, the Tamaqua Borough Authority leased its sewer system, including the treatment facilities, to Tamaqua Borough (Borough). Subsequently, on February 14, 1969, the Borough and the Rush Authority entered into a contract which gave the Rush Authority the right to discharge sewage, collected in the Village of Hometown, into the Borough's

[ 85 Pa. Commw. Page 423]

    sewage system for treatment and disposal in exchange for the sum of $27.00 per year per EDU.

The contract provides in Section 1 that the Rush Authority will connect its sewage system with the Borough's at "the northern Corporate Borough boundary." In addition, the parties agreed to increase the basic fee per EDU set forth in the contract only "[i]n the event that Tamaqua [Borough] . . . [would] have to upgrade the treatment of sewage, the increased costs thereof . . . [would] be prorated between the two (2) municipalities on the same ratio as the E.D.U.'s bear to each other."*fn1 Section 4B of the Agreement. The trial court found, however, that the original basic fee of $27.00 per EDU per year had been increased on June 30, 1971 to $32.00 and then again on June 28, 1974 to $38.60. In both instances, the Rush Authority paid the increased price.

On October 4, 1972, the Pennsylvania Department of Environmental Resources (DER) ordered the Borough to "enter into agreements with Tamaqua Borough Authority to plan, design, finance, construct and operate sewage facilities to properly collect, convey and treat sewage . . . in compliance with Sections 4, 5, 201 and 202 of the Clean Streams Law*fn2 and Section 91.31 of the Department's Rules and Regulations*fn3 promulgated thereunder." (Emphasis added.) To comply with the order of DER, the Borough repaired

[ 85 Pa. Commw. Page 424]

    and expanded its existing sewage collection lines, constructed an independent surface water collection and drainage system to divert surface water away from the sanitary sewer system, and upgraded and enlarged the treatment plant to provide secondary treatment of the sewage collected from the Borough and the Village of Hometown. The cost of the required improvements, construction and upgrading was financed in part by a bond issue.

Following the completion of this project in March of 1975, the Borough determined that the price of maintaining and operating the plant along with the amortization of the bond issue necessitated an increase in the fee charged to residential users in Tamaqua and to the Rush Authority. Consequently, the Borough enacted an ordinance increasing the fee to $96.00 per EDU per year. The Rush Authority, however, paid only $68.00 per EDU per year, contending that under the contract it could be charged only for the cost of upgrading the treatment facility and that the increased fee of $96.00 per EDU per year encompassed not only those costs, but also the monies expended for improvements in the sewage collection system and the construction of the independent collection system for surface waters.

Thereafter, on March 25, 1977, the Borough filed a complaint in equity, which was later transferred to the law side of the court by a stipulation between the parties, to collect alleged arrearages. On May 16, 1977, the Rush Authority filed an answer and a counterclaim seeking to recover the additional sums collected by the Borough as a result of the 1971 and 1974 increases in the basic fee set under the 1969 contract.

Following a non-jury trial, the court concluded that the Rush Authority was liable here under the contract only for those costs accrued in upgrading the sewage ...


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