‘We’re at a dead end.’ UAJA moves to take legal action against State College over payments
The University Area Joint Authority voted Wednesday to take legal action against the State College Borough, as it has been withholding partial payments and owes the authority more than $400,000.
The State College Borough has been withholding partial payments to UAJA for several months, Cory Miller, UAJA’s executive director, said during August’s UAJA meeting. The unresolved issue has the potential to trigger rate increases, he said.
UAJA, the municipal authority providing wastewater treatment to much of State College and the Centre Region, previously had an agreement with the borough, but it expired in September 2020. Under that agreement, the borough paid based on meter readings. After the authority conducted a rate study, it adopted new, higher rates in October 2021, and again in early 2022 with some changes.
The borough had concerns with UAJA’s rate determination and has been paying UAJA according to the old agreement, UAJA leadership said.
“They’ve been basically paying us … according to how we billed them prior to Jan. 1 of this year,” Miller said in August. “So we’ve gone two quarters and they’ve withheld money from both of those quarters.” Including late fees and other charges, the borough owes about $406,000.
Representing the borough, Isaac Wakefield, of Salzmann Hughes, remotely attended UAJA’s meeting on Wednesday. He said a letter was sent to UAJA on Tuesday outlining the borough’s concerns.
“The tone of that letter was, I’d say, frustrated. And I think, candidly, that’s just how the borough feels about how the negotiations to this point have shaken out. Despite the authority’s authorization last month to negotiate with the borough, that hasn’t occurred. So each time that we’ve tried to set up meetings or discussions with staff or special counsel, we sort of hit a brick wall,” Wakefield said.
With the letter, there was an offer by the borough to pay the outstanding balance, less penalties, while a new agreement is negotiated, Wakefield said. UAJA Chair David Lapinski said their special counsel met with the board in an executive session and they discussed the matter.
The board majority voted to have UAJA’s counsel “file a complaint in equity in Centre County Court of Common Pleas requesting relief in the form of an order for the borough to pay all outstanding invoices in full and continue to do so until such time as the borough obtains relief from the court under the Municipality Authorities Act.” The motion was made by board member Mark Kunkle and seconded by Wes Glebe.
“I think we need legal intercession to establish that we’re not — and haven’t been — under the old agreement. They seem to think they are and I think we need some way of, you know, clearing that,” Glebe said.
Larry Miles and Thomas Daubert were the only board members to vote against the motion. Miles said he was not comfortable going to court.
“I’m very uncomfortable (with) this disagreement between two brother, interdependent organizations going to court unnecessarily and exposing all of us all — both organizations — to the press. I cannot vote to go to court,” Miles said.
Board member Daniel Guss said he was also uncomfortable with it, but it needed to be done.
“I wish there was another way to do it. But it seems like we’re at a dead end and we need to, we need the money. And it’s going to start affecting our bonds and all different other things. So I think we just have to get this to move by taking this motion,” Guss said.
Through UAJA’s bond indenture, if they don’t meet the debt service coverage factor, it could trigger a rate increase. In August, Miller said it needed to be resolved and paid by the end of December to avoid that.
