SHARPSVILLE, SOUTH PYMATUNING TOWNSHIP — For the third time in less than two years, Sharpsville borough council members Wednesday raised water rates, but said this latest hike won’t be necessary if South Pymatuning Township supervisors sign a new water agreement next week.

If township leaders sign an extended water pact during their monthly supervisors meeting Tuesday night, Sharpsville Council President John Alfredo said council will rescind the ordinance outlining the new rates.

Without that new pact, every customer on the Sharpsville water system, including those in the township, will pay $1.45 more for every 1,000 gallons of water used. The specific costs depend on the size of pipe and quantity of water used, but for most Sharpsville residents, it adds up to a 17.9 percent hike. South Py pays a bulk rate for water for its residents who live closest to the borough line, and for them, this is a 32.7 increase.

But depending on how you look at it, the ongoing battle between the two municipalities is about more than just water rate hikes. Or, it’s all about water rate hikes.

South Py started buying its water from Sharpsville in 1996. That contract continues through 2021, and it allows the borough to raise rates as needed.

But South Py officials worry a lot about that carte blanche power, especially as it affects its largest employer, Dean Dairy. The dairy, employer of 400 full-time workers, also happens to be the largest water customer.

In an interview with The Herald earlier this week, Jed Davis, vice president and general manager of the dairy said this latest rate increase would cost the facility about $100,000.

Water rate discussions have repeatedly included worries that additional hikes would cause the dairy to downsize or close its South Py operation. Even though Davis called the latest rate increase “significant,” he said, “It’s not going to make or break us.

“This is not a situation that the dairy’s going to leave,” Davis said.

South Py has tried to look for other water suppliers, but without much luck, and in a face-to-face meeting with Sharpsville council earlier this summer, the supervisors acknowledged they didn’t really have any other viable options.

Still, they’re hesitant to ink a new deal.

But that’s exactly what Sharpsville officials want. The borough is on the hook to pay back a $4.5 million loan for water line improvements by 2031. They want to make sure every water customer helps pay for those upgrades – not just the customers who live in Sharpsville. Without an extension of the contract, the borough would be left to pay the final 10 years of that loan note without South Py, and Dean Dairy, as customers.

And that’s where this latest water rate hike comes into play. Increasing every customer’s rate by $1.45 for every 1,000 gallons used will give the borough the money to pay back the entire loan.

As Sharpsville’s solicitor Joe Joseph said in June, “You’re going to pay it in nine or you’re going to pay it in 19.”

Joseph said Wednesday the proposed contract limits when the borough can raise rates. It would allow for a rate hike if there was a “substantial decline” in water use – enough of a drop that the borough couldn’t make its loan payment.

It also allows the borough to pass along any water rate increase charged by the water supplier, Aqua Pennsylvania.

On Wednesday, Sharpsville council members approved the water rate hike without saying a single word – other than casting their “yea” votes.

They also voted to authorize Alfredo, the council president, and Borough Manager Ken Robertson to sign that contract on the borough’s behalf if South Py supervisors approve it during their 7 p.m. meeting Tuesday.