TREASURE ISLAND — The city's "sewer war" with St. Petersburg, temporarily resolved in 2001 and again in 2004, will now be fought in circuit court.
At issue is nearly $500,000 sitting in an escrow account that Treasure Island is refusing to pay for treatment of sewage pumped to St. Petersburg's Northwest Wastewater Treatment Plant.
The money, accumulating in the escrow account at an average of $25,000 a month, represents a 25 percent surcharge St. Petersburg began levying on Treasure Island customers in January 2008.
That was when a 25-year-old agreement between the two cities expired.
"It's a pretty big dispute. We have been collecting the surcharge and holding it under protest," said Treasure Island City Attorney Maura Kiefer on Thursday.
This is not the first time the two cities have fought over wastewater treatment rates.
In 1998, St. Petersburg tried to hike its fees 65 percent. Treasure Island refused to pay the increase.
That fight was resolved in 2001 when the cities agreed to a reduced rate schedule. Further disputes led to a revision of the agreement between the two cities in 2004.
When the two cities could not agree on a new contract last year, Treasure Island refused to pay a 25 percent surcharge Kiefer calls "just a money-maker" for St. Petersburg.
The two cities tried to resolve the dispute through nonbinding mediation, but were unsuccessful.
Kiefer says both cities "have agreed that a court declaration regarding the surcharge issue is necessary."
St. Petersburg officials declined to comment.
St. Petersburg began treating Treasure Island's wastewater in 1978 after the federal Environmental Protection Agency, acting under the Federal Clean Water Act, forced the closing of smaller municipal wastewater treatment plants, including plants on Treasure Island and St. Pete Beach.
The EPA designated St. Petersburg's Northwest Plant as a regional plant and funded millions of dollars in upgrades to expand its capacity.
Because St. Pete Beach has a different agreement with St. Petersburg that runs in "perpetuity," according to Public Services Director Steve Hallock, the city pays a wholesale rate that does not include the 25 percent surcharge.
Kiefer argues that even though Treasure Island's agreement with St. Petersburg has expired, the city should not face a surcharge, either.
A state law that allows such a surcharge does not apply, she says, because the Northwest plant lies within the St. Petersburg city limits.
Her larger argument, however, is that when the EPA granted millions to upgrade the Northwest plant, the Clean Water Act said that grant fund recipients — Treasure Island and St. Petersburg — should pay only their "proportionate share" of the costs to operate the plant.
Keifer warns that allowing the 25 percent surcharge violates the grant requirements and would cause "irreparable harm" to Treasure Island and St. Petersburg because the cities would then be required to pay back the money originally granted by the EPA.
According to the lawsuit Kiefer filed last week, Treasure Island wants the court to issue a summary judgment declaring the surcharge illegal and a permanent injunction against St. Petersburg preventing further efforts to collect the surcharge.
If Treasure Island is successful in its court action, the City Commission will have to decide what to do with the surcharge paid by residential and commercial sewer customers since January 2008.