The City of Wilmington and New Castle County officials agreed Monday that they would ask an arbitrator to intervene after 18 months of talks stalled over how much the County should pay for the use of Wilmington’s Wastewater Treatment Facility.
The City is asking for a retroactive $18.8 million from the county for fiscal year 2008, with an annual escalator. In 2007, the last year of the old contract, the County paid $16.9 million.
As is dictated in the expiring contract, the American Arbitration Association will first mediate between the two parties, and if no agreement is reached, will issue a ruling on what the annual payments will be in each of the next five years.
Wilmington Mayor James Baker said he was reluctant to enter arbitration, but said it had become clear that the sides had reached an impasse. The old contract expired on June 30, 2007.
About 156,000 residents and businesses from outside the City contribute 62 million gallons of sewage flow to the facility each day, while 50 million gallons comes from 29,000 Wilmington households and businesses.
“City residents cannot continue to subsidize the escalating annual costs of operating the wastewater plant to make up for the fact that the County is not paying its fair share of those costs," Baker said. "In addition, the City is bearing all of the risks associated with operating the plant while the County receives significant benefits.”
Costs associated with operating Wilmington’s treatment plant have risen dramatically in recent years, he said, and the City is now asking only that the County pay a fair and equitable share based on a fixed annual fee and a cost escalation fee tied to industry market conditions.
Jeff Bullock, chief administrative officer for New Castle County, said the parties were close to an agreement on annual operating costs, but said he took issue with a 10 percent surcharge -- nearly $2 million in the first year of the contract.
“We have to get answers to some questions,” Bullock said. “At this point its best to do it in a way that’s not acrimonious and where those not hard feelings at the end.”
