Water users hit with increased surcharge; cap ends for mill sewage

The Tyrone Borough Authority met yesterday to consider the adoption of the water and sewer budgets for 2006.
Both budgets were accepted and resolutions were approved that will mean increased costs for water customers and a major user of the borough’s sewage treatment facilities.
For the past several years, water customers in the borough have paid a surcharge of $1.33 per 1,000 gallons of usage. The money is used to help the borough repay a loan through PennVest. However, the current surcharge is not enough to make the yearly payment.
The resolution passed yesterday will increase the surcharge to $1.50 per 1,000 gallons of usage. Borough manager Sharon Dannaway said the new rate would mean an increase of about 68 cents on the average water customer’s bill.
Authority chairman William Hall explained why the revenue from the PennVest surcharge has not kept up with the cost of the loan payment. He said the rate increase that went into effect in 2004 has led to a reduction in consumption. He said more and more people are using water-saving devices.
The authority also passed a resolution that will impose a $45,000 reimbursement fee on the American Eagle Paper Mill.
The borough and the mill have an agreement that caps the facility’s costs at $429,000 per year. That agreement expires at the end of the year.
The fee will allow the borough to recoup money it would have received the last two years had a cap not been in place. Without the cap, the borough would have taken in additional $229,000 from the mill based on actual usage.
If collected over the next five years, the borough would recoup its money.
In 2006, American Eagle will also pay for actual usage. The borough estimates actual usage at $550,000. With the reimbursement figure of $45,000, the mill’s total cost is projected at $595,000.
However, Dannaway told The Daily Herald that the move is an “interim” decision. She said the borough is considering all options regarding the mill’s costs for 2007 and beyond. She said the recent moves were made to “alleviate litigation for both parties.”
In October, borough council discussed an increase of up to 65 percent as part of a five-year agreement. The 65-percent figure is equivalent to the amount passed onto other customers at the beginning of 2004. If the 65-percent increase were imposed, the mill’s costs would rise to $953,000 per year. The $953,000 amount includes the $45,000 reimbursement figure.
Earlier this year, the mill had attempted to extend the original agreement and increase its capacity, but the borough turned down the request.
Mill representative John Ferner said this morning, “We anticipate working out a long-term agreement. This is a positive start. Hopefully, sometime in the next few months we will come to some type of agreement that will be beneficial to both of us.”