2007-02-10 / News

Commissioners delay sewer rate hike

By Charles Prince

NEWARK - Licking County Commissioners want some more time before making a decision on a proposed rate increase for Buckeye Lake Sewer District customers.

"We've just got to have some time on this issue," Commissioner Marcia Phelps told several district customers at the commissioners' meeting Monday. A week ago, commissioners told the same customers that a decision could be made as soon as Monday's meeting, but that was before some 450 customers turned out for a public meeting at Lakewood High School on January 31. More than 40 customers told commissioners that the proposed 69 percent this year and 115 percent increase by January 2012 is unreasonable, unnecessary and unaffordable.

Several customers were surprised to see Water and Wastewater Director Ken Salsberry, County Auditor Terry Evans, County Finance Director Chad Fuller and Seasongood & M a y e r r e p r e s e n t a t i v e Joseph Robertson leaving the commissioners' chambers before the 11 a.m. update with Salsberry on the agenda. "We findthat a meeting has taken place before we got here," Merv Bartholow told commissioners. "We weren't privy to what went on before we got here," Peggy Wells added.

"Essentially it was us telling our finance people to sharpen their pencils," President Tim Bubb said. "It creates some mistrust," Wells said.

Phelps said the 9:45 a.m. meeting was a late addition to the agenda. Salsberry was asked to look at a 6 percent annual increase for salaries/benefits/travel rather the originally projected 9 percent annual increase, to look at 3 percent versus the original 4 percent annual increase for contracted services. He is also supposed to look at the effect of "bumping up" the annual increase in EDU's from 26 to 52 per year and doubling the connection fee from $3,000 to 6,000.

Phelps said Robertson brought up the issue of general obligation bonds, which means the county stands behind them, versus revenue bonds which are totally dependent on sewer district revenue. General obligation bonds have lower interest rates, but Phelps said the county isn't going to do that.

When Salsberry returned for his scheduled update with commissioners, he said the only alternative loan option is the Ohio Water Development Authority. That rate is currently 4.62 percent, representing only a small savings from the approximately 5 percent rate for revenue bonds. The consent decree might give the district a .15 percent discount, Salsberry added. He said he checked with Ohio EPA and was told by a staffer that the district couldn't refinance a project using a Water Pollution Control Loan Fund loan.

When challenged by The Beacon that his information contradicted the information provided to The Beacon last week by the chief of Ohio EPA's Division of Environmental and Financial Assistance, Salsberry agreed to check with the chief. Commissioners confirmed that long-term financing for the $10 million expansion is not done. It is currently being financed by short-term bonds. Commissioners were told it wasn't appropriate to call this a refinancing since permanent financing isn't in place.

Bartholow told commissioners that it appears the district would qualify for a 1 percent Water Pollution Control Loan Fund loan. The discount rate is available to communities or districts with less than 10,000 in population and a median household income of less than $38,000. Using Salsberry's customer numbers and an Ohio EPA accepted standard of three persons per household, the district has a population of about 8,800. The median household income is based on the 2000 census. That calculation required some extrapolation, Bartholow said. Specific income data is available for the Village of Buckeye Lake, FairfieldBeach and Harbor Hills. By using Harbor Hills income data for the non-Buckeye Lake Village portion of North Bank, Lieb's Island, West Bank and the non-FairfieldBeach portion of South Bank, Bartholow came up with an average median household income of approximately $34,000. He reminded commissioners that customers will save millions in interest with a 1 percent loan versus 5 percent revenue bonds.

Salsberry told commissioners that he had asked Fairfieldand Perry county commissioners to hold off on any action to approve rate increase resolutions. The decision is made by Licking County Commissioners, but must be ratified by both Fairfieldand Perry county commissioners.

Customers were also given a revised spreadsheet dated January 31 that reduced the increase in 2007 to $39, a 34 percent increase, but increased the rate in 2012 from $62.40 to $65.00 for a total rate increase of 124 percent. Basically, the rates would be lower than the original proposal for the first three years of the period and higher for the last three years. Commissioners emphasized that it was only an interim look at adjusting rates.

Commissioners acknowledged receiving a proposed action plan from Bartholow, Wells, Tim Weisert and Charles Prince. They pledged to review it, but weren't ready to discuss it.

The proposed plan, submitted by the four as individuals, has fivepoints.

+ Increase the monthly rate per EDU by $11 to $40 immediately - a 38 percent increase while providing a five-year rate forecast to customers. The plan said the increase would provide sufficientrevenue for the district well into 2008.

+ Increase the connection fee from $3,000 to $4,000 effective immediately for structures constructed after the effective date of the increase. This ensures that developers feel some of the pain customers will be experiencing while not increasing connection costs for Jacksontown area residents who will be forced to hook up to the system in the next year or so.

+ Direct the Water and Wastewater Director to apply for a Water Pollution Control Loan Fund loan and to hold the increase for salaries/benefits/travel to 6 percent a year and the increase for contracted services to 3 percent per year.

+ Restructure the commercial metering program to bill metered accounts on their highest monthly usage/number of users for the previous calendar year. Since customers are now paying $10 million to increase the plant capacity, larger users should pay on the basis of their maximum usage since the plant must be large enough to handle that volume. The proposal would increase the number of EDU's, spreading the cost increase over more EDU's.

+ Appoint a Buckeye Lake S e w e r D i s t r i c t A d v i s o r y Committee to recommend a long-term rate plan (minimum of fiveyears) to meet the following objectives.

a. Ensure the system is selfsupporting.

b. Recognize that many of the district's customers have limited income.

c. Ensure that developers and other future customers pay a fair share of the past investment.

d. Keep customers informed on a regular basis and provide opportunities for input on rates and policies.

The proposed action plan suggested that the committee be named based on nominations from Buckeye Lake Area Civic Association, Buckeye Lake Area Chamber of Commerce, Village of Buckeye Lake, Licking Township Board of Trustees, Walnut Township Board of Trustee, FairfieldBeach Property Owners' Association and Harbor Hill Civic Association. The committee would only make rate recommendations to the commissioners.

"I'm not voting for an increase until I know every rock has been overturned," Phelps pledged. "You've drawn our attention to some other alternatives," Commissioner Doug Smith added. "We're going to try to look at everything."

"I consider it an open line of communication," Bubb added.

Commissioners promised that any resolution to increase rates will appear on the agenda.

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