Tyrone Borough has decided not to renew its agreement regarding sewage capacity to the American Eagle Paper Mill.
The deal which runs through this year was struck in 2003 to allow the mill the use of part of the borough’s sewage capacity at a capped cost of $429,000 maximum. The deal also called for a minimum payment to the borough of $350,000.
The mill exceeded the cap in 2004, reaching the $429,000 figure in October of last year.
As a part of its discussions last night, the borough also indicated it could decide to ask for an increase of up to 25 percent above what the mill currently pays for sewage treatment starting in 2006. The council would have to seek such an increase through the Tyrone Borough Authority.
Previously, sewage rates were raised in the borough for residents and commercial users in 2004. The 65 percent increase, the first in more than two decades, did not apply to the paper mill.
Team Ten LLC, the operating group for the mill, had met with borough officials to seek an extension of the 2003 agreement for 2006 and 2007. In return, the mill would have given the borough an additional $100,000 for 2004 and another $100,000 for 2005 above the $429,000. The additional proposed amount for 2006 and 2007 was $50,000 for each year respectively.
Even with the additional $300,000, Myers told council the borough would still be short $168,000. This morning, he told The Daily Herald he based the figure on what he estimated the mill would use during the four-year period covering 2004 through 2007. He said the mill is expected to exceed the cap of $429,000 per year by a total of $192,000 combined for 2004 and 2005. The money would have to be made up by tapping into sewer department reserves.
The mill was also seeking to buy an additional 400 pounds per day of “solids” or BOD (Biochemical Oxygen Demand) capacity. Because of the way the recycled paper is treated, the mill has a need for that type of sewage treatment. The issue was not dealt with during the 2003 negotiations, since the sewage capacity needs, in terms of type and amount, were based on what was used when the mill was operated by Westvaco prior to a 2001 shutdown. The additional “solids” capacity apparently would have been included in the revised capped amounts if the borough had agreed to the new deal.
“When you look at who is going to pay the price, ultimately, it would be the residents of the borough,” said Mayor Patricia Stoner. “(Based on) the figures which were given to us, we would recognize a $168,000 loss.
“They (the residents) were asked to sacrifice, they sacrificed willingly, a lot of people in the borough, not only borough residents, borough council made concessions because we wanted Team Ten up and running. But we can’t keep unloading it onto our residents. It’s not fair. I think that council made a wise decision.”
She also said the “solids” capacity the mill had requested from the borough had value and the company was welcome to ask for that at another time.
Councilman William Latchford said, “I’ve always been a big supporter of the mill, I personally would like to see us, at the very least, do something for them because the town is built around the mill and the railroad. The heritage is there.
“I would like to have seen, but it looks like council has made up there mind, a break-even scenario for us, where we don’t make anything off of it, they don’t make anything off of it,” said Latchford. “I think that’s at least a goodwill effort.
“They might not agree with that,” said Latchford. “But, knowing how much we have lost, they are in business to make money and when they see that we’ve lost money, that’s not as big of a concern to them as it is to us. I think that’s why council, in general, responded the way they have.”
Council did not vote on the issue, instead coming to their conclusion by a discussion and a consensus.
During the meeting, Councilman Bill Fink was asked by Mayor Stoner for his view and he abstained from giving it. When asked by Councilwoman Jennifer Bryan why he abstained from giving his opinion, he responded that there might be “a conflict of interest” and he would discuss it with her after the meeting.
Fink, who is seeking the Republican nomination for Tyrone Borough mayor, was asked about his decision after the meeting adjourned.
He told The Daily Herald, “I think there could possibly be a conflict of interest, since two of the members of Team Ten are heading up our campaign committee. So, I just felt it was improper for me to make any kind of a decision one way or the other.
“I will tell you however, had I made a decision, I would not have settled for anything less than break-even,” said Fink.
Representatives of the mill were not at last night’s meeting. This morning, a Team Ten representative said mill president John Ferner was out of town until Wednesday and any comment about the borough’s decision was being referred to him.
