Sewer Authority threatens to end American Water contract to
escape financial obligation to company
By Michael Sadowski
TRIBUNE STAFF WRITER
Water division of Thames USA currently operates the South
Scranton wastewater treatment plant. In a complex scheme American "loaned" money to Scranton
to be repaid through the course of a twenty year contract. Now
the city and the company disagree if the money must be paid back
is pressuring American Water by entertaining interest from two
other companies to operate the wastewater facility.
United Water and Severn Trent Services, two national
water-management companies, have expressed interest in taking
over operations of the plant in the last few weeks. Severn Trent
expressed this interest in a letter sent to the authority, while
a United Water official called authority engineer Albert
Magnotta to express interest.
Scranton Sewage Authority chairman Eugene Barrett said the addition of new
companies into the mix takes a bit of pressure off the
authority. Last month, the authority had no companies interested
and the possibility of the authority having to take over the
treatment plant -- as it had done until 1999 -- seemed very
While that still can happen, the authority now has options.
"This fosters competition," Mr. Barrett said. "It
does give us something else to look at. If someone can give us
the service better than what we have dealt with, then it is
incumbent on us to look at that."
American Water still wants to negotiate with the city to devise
a successor contract and continue to operate the plant.
"We are serious about negotiating," AWS Regional
Director Stephen Siegfried said. "American Water wants to
be in Scranton."
But if American Water and the authority end their relationship,
there already is debate over how much -- if any -- the city and
Dunmore owes the company.
Scranton and Dunmore received an up-front, lump-sum $8 million
payment from American Water in 1999. As the arrangement
progresses each year, the amount the company can reclaim is
gradually reduced and reaches zero after 20 years.
The schedule indicates a hanging balance of $6.63 million
through Jan. 31.
Mr. Barrett reiterated Wednesday he believes there is
"legal standing" for the city and borough not to owe
Mr. Siegfried disagreed: "It's in the contract. It's in
black and white. It's very clear."
The last option -- the authority take over the plant -- is still