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Details of agreement with paper mill released at council meeting

Tyrone Borough Council took the step of ratifying a completed agreement with the American Eagle Paper Mill at last night’s borough council meeting.
The council heard solicitor Larry Clapper give some of the highlights of the agreement while noting that the borough signed the documents earlier in the day.
Late last week, borough manager Sharon Dannaway told The Daily Herald the two sides had agreed to extend a deadline for the mill to file an appeal regarding fines for permit violations by a week so as to allow all the necessary parties to sign off on the agreement. The deadline had already been extended once to March 31 and the new deadline was to have been this Friday.
Among the highlights of the agreement, both the borough and the mill have agreed to have a cost-of-service study completed before revising the rate the mill will pay for sewage treatment services.
Since an agreement in 2003, the mill’s costs have been capped at $429,000 a year. Without the cap, the mill would have paid about $560,000 a year. Under the agreement, the mill will now pay the $560,000 a year retroactive to Jan. 1 of this year until Dec. 31, 2008 or until such time that the cost-of-service studies can be completed and a new agreement put in place. The mill will not be subject to a 65 percent rate increase that was put into effect for other customers at the start of 2004.
The mill has also been granted an additional 800 pounds a day for biochemical oxygen demand between now and the end of the July. Solicitor Clapper noted the borough would still have ownership of the capacity. The mill agreed to pay $230,000 for the additional amount that would give them a total of 6,500 pounds per day capacity for BOD.
The mill’s permit allows them 5,700 per day and they have exceeded that capacity for several months since last August. Sewer Department Manager Tim Nulton said the mill was out of compliance from August through February of this year. He did not know the status of March as of this morning. A review of the agreement noted a January report submitted by the mill. For that month, the mill had an average of 6,349 pounds per day of BOD or about 650 pounds per day in excess of its permitted limit.
The cause of the additional BOD was due to increased production that began last summer. The mill has already been working on solving the BOD problems. The plant has been installing several biotowers at the facility in a pretreatment effort to reduce the BOD. Team Ten, LLC president John Ferner had previously said the biotowers cost the mill about $600,000.
This morning Ferner said, “I think we appreciate that the borough sat down with us and tried to work out a resolution to the (BOD) problem. We have spent a considerable amount of money to solve the problem. The borough understands our problems and we understand theirs.”
He said the agreement, “At least on a temporary basis gives us some time to work together to complete a rate study and come up with a solution for the future. We’re happy to be able to sit down and work something out.”
The mill wanted the additional BOD allowance through July to allow the biochemical towers time to produce the needed reduction. The $230,000 being paid to the borough for the increased BOD capacity will be used to upgrade the borough’s treatment facility.
Last year, the Tyrone Borough Authority imposed by resolution a monthly reimbursement charge of $3,750 on the mill effective at the start of this year. The charge was to have remained in effect until the borough was reimbursed $230,000. The amount represents what the borough would have been paid in 2004 and 2005 had the mill’s cost for sewage not been capped at $429,000. Under the new agreement, the reimbursement charge is being rescinded with the payment of the $230,000 for the use of the extra BOD capacity. Dannaway told The Herald this morning that the mill has been paying the reimbursement charge since the beginning of the year. Upon payment of the $230,000, the borough will reimburse those monthly payments to the mill.
The mill has also agreed to pay $24,000 per year for the cost of adding certain nutrients for treatment.
The borough will also hire an engineer who has expertise in public wastewater treatment and paper mill industrial waste discharge. The mill will absorb $10,000 in costs for the engineer. The borough would be responsible for any costs in excess of $10,000. Mill operators will also provide an advisor who will consult with the borough on the various issues.
Mill operators were subject to fines of more than $90,000 for the BOD violations. Under the agreement, they will pay $15,000. The mill also agreed to pay $1,000 a month in penalties for any month they are out of BOD compliance from April through July. In August and September of this year the penalty would be $1,500 per month. From October and beyond, the parties would have all rights available to them if the mill were out of compliance.
The new agreement is between the borough and the American Eagle Paper Mill operators, Team Ten LLC and the Blair County Development Corporation.