By RICK MILLER
Olean Star
OLEAN — Mayor Bill Aiello on Friday disclosed the bill and late charges for wastewater treatment for the Village of Allegany and St. Bonaventure University had climbed to $7.3 million.
The City of Olean notified the Village of Allegany, St. Bonaventure and a portion of the town of Allegany in the water district nearly four years ago that a 40-year contract initiated in September 1980 had expired and that the Olean Common Council.
For two years, the municipalities negotiated, but were unsuccessful in coming to a new agreement. The Olean Common Council set new rates and began charging late fees in 2023.
Aiello said in a press release on Friday that he was trying to clarify “the status of a long-standing inter-municipal agreement and the resulting financial obligations owed by neighboring communities.”
There was no expiration date on the contract, so the contract defaulted to the state’s statutory maximum of 40 years, Aiello said.
On Aug. 4, 2023, the city formally notified the village that the contract had expired under the law.
“Since that time, the city has been billing the village monthly at rates established by the Olean City Council, including compounding late fees for nonpayment,” Aiello said.
The Village and Town of Allegany and St. Bonaventure University filed an Article 78 challenging both the charges and the city’s contention that the contract has expired under state law.
Aiello said that while the litigation remains active, the city received a partial payment of $300,000 from the village on Oct. 7, 2024. The balance, the mayor said, was $7,355,271.48.
The mayor said he and other city officials emphasize “transparency and accountability to Olean’s taxpayers who deserve clarity regarding the substantial delinquent bill from neighboring entities.”
Aiello said, “The City remains committed to resolving this matter through appropriate legal channels while safeguarding the financial interests of its residents.”
Allegany Mayor Greg Pearl was unavailable to comment, but another village official who asked not to be named said the city had been “billing the village as a customer, not a municipality.”
The official said the village had been in negotiations with the city over the issue for some time, but continued to pat $300,000 a year, an estimate based on what was paid over the years. “We pay a year ahead.”
“We generate about 10% of the sewage,” a far cry from the $7.3 million being sought by the city. “Our water and sewer rates would have to go up 10 times to pay that,” the official said. “That’s more than our entire budget.”
The city’s sewer budget is $4.8 million a year.
In the 1980 agreement, the village agreed in an intermunicipal agreement to pay $140,000 to treat 1 million gallons of wastewater a day from the village, the university and the sewer district in the town.
The city has been charging the village based on an individual rate of 1.5 cents a gallon with compound interest.
The village, which has no wastewater treatment plant, built a sewage line to the city wastewater treatment plant in 1980.
Despite the lawsuit by the village, town and university which have languished in state Supreme Court, the village and city have continued to talk.
An arbitration session earlier this summer was nut fruitful. A settlement conference in August did not produce an agreement, so the two sides will meet again in October.
Meanwhile, the city has reportedly signed off on plans to extend sewer service along Route 417 west of the village.
Allegany Supervisor Christopher McPhearson issued a statement Monday afternoon outlining the position of the town and St. Bonaventure University with regard to the statements made by Aiello regarding the sewage issue.
“The Town of Allegany and Bonaventure University are aware of the recent statement issued by the City of Olean concerning utility charges under an inter-municipal agreement,” McPhearson said..
“It is important for the public to understand that both the Town of Allegany and St. Bonaventure University are billed directly by the Village of Allegany, not the City of Olean. In turn, we have never once missed or been delinquent on payment for any charges billed to us by the Village,”McPhearson said.
“Litigation is ongoing between the City of Olean and the Town/Village of Allegany, along with St. Bonaventure,” he said. “Because of this litigation, the Town of Allegany and St. Bonaventure cannot comment on specific claims made by the City of Olean.”
McPhearson said, “The current dispute regarding contractual obligations and billing practices is being addressed through appropriate legal actions in court.
The Town of Allegany remains committed to transparency with our residents, students, and stakeholders, and to ensuring a fair and lawful resolution to this matter.”
