Sewage contract dispute spreads; Notice sent of breach of pact.

Byline: Craig S. Semon

SOUTHBRIDGE - Southbridge has terminated its contract with Sturbridge that allows wastewater to flow from Sturbridge into the Southbridge treatment plant.

Acting Town Manager John F. Healey said last night from his Middleboro home that he notified Sturbridge Town Administrator James J. Malloy in a certified letter sent yesterday that Southbridge is terminating its agreement because of a breach of contract.

"Under the contract section 9.1, either party, with three years' notice, can notify the other of their intent to terminate the agreement, and section 9.2, either party can terminate the agreement for breach of contract," Mr. Healey said. "We consider that Sturbridge has breached its contract in that they have refused to pay the money owed to the town for treating their wastewater under the agreement."

Mr. Healey said he doesn't expect the letter to reach Mr. Malloy until today or tomorrow. However, Mr. Malloy already got wind of its contents last night.

Hearing the breach on contract allegation, Mr. Malloy said last night from his home, "Well, they haven't read the entire contract."

"The contract also states that if there's any dispute regarding the charges, that we would pay the undisputed amount until that dispute is resolved in court. So it's not breach of contract," Mr. Malloy insisted. "If that's what they're saying, I would have to assume that they are acting without advice of counsel."

Mr. Healey said Sturbridge owes Southbridge more than $92,700. Mr. Malloy said Sturbridge paid the undisputed amount owed to Southbridge and the $92,700 represents the disputed amount.

"We have been paying the undisputed amount of the contract," Mr. Malloy said. "You'll find that if there is a dispute, we're only responsible for paying the undisputed amount until such time it has been adjudicated."

In an executive session Monday night, the Town Council voted 8-0 to terminate the contract. Mr. Healey said the reason for the executive session was because of the legal action Sturbridge brought against Southbridge in 2006.

Mr. Malloy said, "Well, that's kinda stretching it."

"I don't think you can say, well, we filed a claim based on the rate they were charging us and, therefore, we can discuss anything we want in regards of the intermunicipal agreement in executive session," Mr. Malloy said. "This is something that clearly should have been discussed in a public meeting."

Mr. Malloy said the suit filed in 2006 is over Sturbridge not being charged like any other user of the Southbridge wastewater treatment system as originally agreed in the 1998 contract.

"I negotiated this contract with the town manager, five town managers ago or whatever it was now. So I understand the contract pretty clearly," Mr. Malloy said. "The (Southbridge Town) Council's acting without the advice of counsel."

While Clayton R. Carlisle was town manager, a new rate was created for the town of Sturbridge and the Millennium Power Plant in Charlton. Mr. Malloy said the rate was three or four times more than what was paid by the regular Southbridge user.

Mr. Malloy said Southbridge hasn't taken into account that Sturbridge made an investment of several hundred thousand dollars to send 35,000 to 50,000 gallons per day to Southbridge, as well as improving Southbridge's wastewater system.

"I don't know if this is being done in retribution or as a scare tactic in regard of the landfill issue with Southbridge, or whether or not this is supposed to be a scare tactic as far as the litigation we filed against them on the rates," Mr. Malloy said. "If they think that we have made that kind of investment and we're just going to allow them to say this is a breach of contract, we're going to terminate it in three years without seeking repayment for that, I think they are mistaken."

When he does receive the certified letter, Mr. Malloy said, he's going to turn it over to special counsel to write a reply.