The two sides negotiated for fours hours Tuesday at Chancery Judge Jerry Mason's suggestion but failed to reach an agreement. Finally, they gave up and went to trial.
Marion has been paying 67 cents per 1,000 gallons for Meridian to treat its sewage and charging their residents $3.00 for the service.
Meridian's rate to its residents is $2.43. It wants the town of Marion to pay the same amount.
Most of Tuesday's trial found Marion Mayor Malcom Threatt on the stand being questioned by the city's attorney, Jerry Mills of Jackson.
Threatt admitted that, in 1987, the DEQ told Marion its sewage disposal was not in compliance and it would have to build a new plant or get someone else to treat it. The town turned to Meridian.
The original agreement was for four years, then replaced by a five year agreement that for five additional five year terms, provided certain provisions were observed including price.
Threatt said there was a formula to determine price but agreed there had been no negotiations. He also admitted Marion had been billed by Meridian for $2.43 per 1,000 gallons for two years but was still paying at the 67 cent rate.
When Mills said, "You thought you had a sweetheart deal, didn't you?"
Threatt responded "I knew we had a deal we could live with."
Earlier, Meridian Mayor John Robert Smith testified the city needs the rate increase to recover the cost of operating the sewer system to Marion.