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Orbisonia-Rockhill Joint Municipal Authority v. Cromwell Township

July 23, 2009

THE ORBISONIA-ROCKHILL JOINT MUNICIPAL AUTHORITY
v.
CROMWELL TOWNSHIP, HUNTINGDON COUNTY, PENNSYLVANIA, APPELLANT



The opinion of the court was delivered by: Senior Judge Flaherty

Submitted: April 24, 2009

BEFORE: HONORABLE BERNARD L. McGINLEY, Judge, HONORABLE RENÉE COHN JUBELIRER, Judge, HONORABLE JIM FLAHERTY, Senior Judge.

OPINION

Cromwell Township (Township) appeals from an order of the Court of Common Pleas of Huntingdon County (trial court) which entered judgment in favor of the Orbisonia-Rockhill Joint Municipal Authority (Authority) and ordered Township to pay Authority $23,579.75, for breach of contract. We affirm.

The Authority is a joint municipal authority, which controls municipal water and sewer service for the Huntingdon County boroughs of Rockhill and Orbisonia and for a few residents within Township. Township is a second class township that surrounds the two small boroughs.

As found by the trial court, in January of 2005, both parties had issues with the Department of Environmental Resources (Department). Specifically, the Authority was experiencing an overload at its waste water treatment plant, such that Department issued a moratorium with respect to new users. Township, on the other hand, was being pressured by Department to execute its Act 537 plan. That plan provided for public sewers to be constructed from the village of Pogue to Rockhill Furnace and for the construction of a treatment facility. Department sent a letter to Township that if it did not proceed with the plan, a $300.00 a day civil penalty would be imposed. The urging of the Department prompted an informal discussion between the Authority and Township in early 2005, relative to a joint project.

Township, thereafter, advertised for bids in the summer of 2005. The bids were high and the cost to individual users would have been $70.00 per month, per household. Township supervisors, their counsel and engineers met with the Department officials in July, and despite the fact that the bids were far above estimates, they were told that they nonetheless had to proceed. Township supervisors then turned to the Authority for help.

Township supervisor, Mr. Whitsel testified that the hope was to put all of Township's sewage into the Authority's plant and help the Authority increase the capacity of its plant and to save money for Township residents. A series of joint meetings were then held in August and September of 2005.

According Mr. Whitsel, at the first meeting on August 15, 2005, the Authority's engineers were authorized to do a feasibility study for a joint project. The minutes of the public meeting reflect the following:

Cromwell Township Supervisors agreed by motion . and unanimous vote to pay one-half of the engineering fees already incurred preparing preliminary plans and work for the ORJMA [Authority] sewer upgrade. Costs will be provided to Cromwell Township.

(Record, Part 2 at 31.) On September 12, 2005, the engineering firm, employed by the Authority, submitted a report with regards to the project. The engineer who prepared the report, Mr. Morse, stated that from the Authority's perspective, the end result of the joint project was going to be less of a cost to the Authority's customers. A joint project would cost all of the customers $45.00 per month.

A public hearing was held on September 25, 2005 and was continued to September 29, 2005 at which time the parties signed a Memorandum of Understanding (Memorandum) to pursue a joint sewage project. The Memorandum was utilized to memorialize the intent of the parties, since approval for the project was necessary from the Department and the Pennsylvania Infrastructure Investment Authority (Pennvest), the major funding source for the project, and were prerequisites to a final agreement.

On November 15, 2005, a "Sewage Agreement" (Agreement) between the Authority and Township was executed. The Agreement provided in pertinent part:

4. PASSAGE OF ORDINANCES. Cromwell [Township] agrees that it will pass all ordinances necessary to effectuate this entire project . and an ordinance setting forth that Cromwell [Township] will not vacate any ordinance passed in effectuation of this Agreement ...


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