EVANS CITY — The Evans City Water and Sewer Authority says Callery’s nonpayment of $43,000 is causing the agency financial hardship as it prepares to get its new $9.3 million sewer treatment plant running, but the president of Callery Council said the borough is paid in full.

Evans City’s sewer plant has provided service to Callery’s 400 customers since the two boroughs signed an agreement in 1988 until the Evans City Water and Sewer Authority was formed on Jan. 1, 2013, when the authority took over sewer treatment operations from the borough.

The authority in October 2013 filed suit against Callery, saying the borough had not paid its sewer bills since July of that year.

In December 2013, both parties met with Butler County Judge Michael Yeager and settled on an agreement.

The authority officials said in a press release that as of this October, Callery still owes the authority $43,000. They said the dispute with Callery has put the authority in financial hardship and is a factor in increasing the monthly rates customers will be charged once the new plant opens at the end of December.

Evans City authority attorney Phil Lope said the heart of the issue is that Callery officials say the authority is not properly calculating Callery’s monthly payment.

He said while Callery officials have complied with the agreement under Yeager’s ruling regarding payment to the authority, the amount received represented only the arrears owed. He said Callery continues to accrue charges each month, which is what they now owe.

The press release said residents in Evans City pay an average of $43.20 per month, which will increase to an average of $74.70 per month when the new plant opens. Also, the release said Callery charges its sewer customers $100 per month and forwards the authority only $32.26 per month per customer.

But Callery council President Ed Conway said the borough’s sewer agreement is with Evans City Borough and not the new authority.

Conway also said Callery has cooperated with Yeager’s ruling and is not in arrears to the borough.

“To my knowledge, we did everything the judge said we have to do,” Conway said.

Regarding charges, Conway said Callery charges its customers $100 per month and sends the authority almost $72 of that. He said the remainder goes into an account to pay for costs for billing and insurance and to save for the future upgrade of Callery’s five miles of pipe.

He said several negotiation meetings between Callery and authority officials since the agreement under Yeager have produced no results.

“We have come to an impasse,” Conway said. “We made them our last offer and at that point, they said ‘See you in court.’”

He said that the last offer was to end its relationship with the authority so Callery can begin using the Breakneck Creek Regional Authority for sewage treatment.

“The reason we want to go there is that we can never get an agreement with Evans City where we don’t feel we end up getting financially abused,” Conway said.

He complained that while Evans City customers are now paying $48, Callery has been sending $72 per customer to the authority. He said Breakneck Creek will charge Callery $25 per month per customer, if Callery completes a list of requirements.

Conway said Callery will have to increase the payment to the Evans City authority by $10 per customer next year to fund a $15,000 increase mandated by the authority.

“We feel that we need stability and that is being offered by Breakneck Creek Regional Authority,” Conway said.

Authority attorney Phil Lope said he is waiting to get a hearing date from county court regarding the situation, which he agrees is at an impasse.

“It’s a sad situation between neighbors,” Lope said.

Mike Davidson, Breakneck authority manager, said the main stipulation his authority has placed on Callery is that it end its association with the Evans City authority.

“We didn’t want to get involved until they get out of that agreement,” Davidson said.

He said Breakneck has the capacity to handle Callery’s customers, but it may have to pay for updates to a pump station and the main sewage line along Mars-Evans City Road.

Davidson said the borough would also have to pay a $2,845 tap fee for each customer in Callery. He said the customers could not be charged because it is illegal to charge sewer customers more than one tap fee.

He confirmed that Breakneck charges $25 per month for residential customers.