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TOWNSHIP KENNEDY v. OHIO VALLEY GENERAL HOSPITAL (11/14/89)

decided: November 14, 1989.

TOWNSHIP OF KENNEDY, A MUNICIPAL CORPORATION, APPELLANT,
v.
OHIO VALLEY GENERAL HOSPITAL, APPELLEE



Appeal from Common Pleas Court, Allegheny County; Honorable Ralph H. Smith, Jr., Judge.

COUNSEL

Joseph J. Pass, Jubelirer, Pass & Intrieri, P.C., Pittsburgh, for appellant.

Michael J. Betts, with him, Arthur H. Stroyd, Jr., Reed, Smith, Shaw & McClay, Pittsburgh, for appellee.

Doyle, Palladino and Smith, JJ.

Author: Doyle

[ 129 Pa. Commw. Page 496]

Before us for consideration is an order of the Court of Common Pleas of Allegheny County which, pursuant to a remand ordered by this Court in Township of Kennedy v. Ohio Valley General Hospital, 101 Pa. Commonwealth Ct. 536, 516 A.2d 1313 (1986) (Kennedy I), determined that sewage rates which the Township of Kennedy (Township) sought to impose upon Ohio Valley General Hospital (Hospital) were unreasonable.

The history of the Hospital's and the Township's sewer facilities is fully set forth in Kennedy I and we shall reiterate it here only in capsulized form. When the Hospital began its construction in the Township in 1949 the Township had no sewage treatment facilities of its own. Thus, the Hospital discharged its sewage into the sewage system of the Allegheny County Sanitary Authority (ALCOSAN), via the "Ohio Valley line", which line, as we held in Kennedy I, is owned by the Township although the funds for the construction of the line were provided by the Hospital. The Ohio Valley line discharges into the sewer lines of the Borough of McKees Rocks at its municipal border and ultimately flows into the ALCOSAN system. Sewer rental charges were paid by the Hospital to the Township for use of this sewage system until the current litigation began.

At the time the Ohio Valley line was constructed no sewer authority existed in the Township. One did come into existence in 1957 (the Authority) but was thereafter inactive until 1971 when it was reactivated. It then constructed new sewer lines and sewer services in the Township. This project, known as the "EPA project," was implemented

[ 129 Pa. Commw. Page 497]

    because the Township had been cited by the Pennsylvania Department of Environmental Resources and the United States Environmental Protection Agency for permitting raw sewage to discharge and percolate through portions of the Township due to defective septic systems maintained by various home owners and commercial establishments. Construction on the EPA project actually began in 1975 and was completed in late 1977 or early 1978 and became part of the "Comprehensive Sewage Collection System" of the Township.*fn1 The Hospital, however, utilized only the Ohio Valley line and did not directly benefit from the additions to the system attributable to the EPA project. To pay for the comprehensive sewer project the Township passed an ordinance*fn2 which increased sewer fees including those paid by the Hospital. Thereafter, the Hospital refused to pay its bills and litigation ensued which litigation was ultimately, by stipulation, treated as a declaratory judgment action.

In Kennedy I the Hospital argued successfully to the trial court that Section 1 of the Act of July 18, 1935, P.L. 1286 (Sewer Rental Act), as amended, 53 P.S. ยง 2231, did not authorize the Township to charge the Hospital a sewer rental fee. That Section states:

Rentals for use of sewage system

Whenever any county, city, borough, incorporated town, or township, either singly or jointly with other municipalities or townships, (a) has, wholly or partially, constructed or completed or shall hereafter, wholly or ...


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