Tarentum threatens to end longstanding water agreement with neighboring East Deer

Tarentum officials are threatening to pull the plug on a water agreement with neighboring East Deer — 12 years from now.

Tarentum Council voted to notify East Deer that it will opt out of the existing agreement, scheduled to expire in 2032, because officials said it is no longer in Tarentum’s best interests and is unilaterally beneficial to East Deer.

“This contract doesn’t expire any time soon. We’re just letting (East Deer) know, years ahead of time, that it will be over,” Tarentum Solicitor David Regoli said after the council vote. “This will get their attention, and maybe they’ll want to talk to us a little bit more.”

Tarentum sells treated water to East Deer, which the township then distributes to its residents. A contract between the borough and township has been in place since 1972 and automatically renews every 15 years, according to Tarentum Manager Michael Nestico. The last renewal took effect in 2017.

Nestico said the borough approached East Deer about negotiating a new contract, but township officials were unwilling to do so because “the agreement tends to weigh in the township’s favor.”

East Deer Commissioner Tony Taliani said he and the township’s lawyer met once with Nestico and Regoli to discuss the water contract. He didn’t disclose details of the conversation.

“East Deer Township will fully honor its obligations with Tarentum Borough,” Taliani said. “We are willing to talk to them at any time about a new contract that will take place at the expiration of the current contract or that would present terms that would be advantageous to our municipality.”

Taliani said East Deer has other options for buying water, but has not investigated them for a while. He said East Deer is happy with the service Tarentum provides, and that township residents should not anticipate changes in water services anytime soon.

Nestico said the agreement does not adjust for inflation, and it prevents Tarentum from increasing what it charges East Deer for water by more than 3 cents per 1,000 gallons without increasing rates on its own residents.

“Unfortunately the East Deer water rates have only been increased one time in the last 13 years, but the borough has increased rates on its own customers several times in that same period,” Nestico said.

“Our water production and infrastructure costs have gone up considerably since the inception of this contract,” Nestico added. “We must ensure that our rates are able to sustain the utility operation.”

East Deer has used an average of 129 million gallons of water per year over the past four years, at an average annual cost of $383,000, Nestico said.

Tarentum residents pay about 87% more per gallon than East Deer residents based on the minimum rate each municipality charges.

Tarentum residents pay $25 for the first 2,000 gallons, while East Deer residents pay $10 for the first 1,500 gallons.

Nestico said Tarentum began examining East Deer’s water rates at the end of 2019. Council in December approved increasing the rate by 12%, but Nestico said the borough will not enact the increase until it is sure it conforms with the contract’s language.

Nestico could not say how much of an increase would be possible under the contract’s limitations.

“At this time we are conducting a rate analysis so that we can effectively implement a new rate schedule,” he said.