Perry County wants to rework sewer contract with Thornville
THORNVILLE – Perry County Commissioners want to revisit a contract signed in 2007 for Thornville to provide sewer service to Northern Perry County customers, but Thornville officials aren’t showing much interest in doing so.
Monday, Perry County Commissioner Ed Keister, ME Companies Project Manager Mitch Altier, and Commissioner-Elect Jim O’Brien attended the regular Thornville Village Council meeting to explain to council members that the 2007 contract, which calls for five percent annual rate increases over its 15 year term, is quickly becoming too expensive.
“We need to try to address this,” said Keister, who added that he did not expect any immediate answers from council that night, he was merely stating a request for council’s consideration. “As it goes on, it’ll be an ungodly amount of money,” he said. Keister said he would like to renegotiate the contract soon. “It’s getting out of hand now in our budget,” he said.
“It’s fast approaching a point where it’s economically unfeasible,” said Altier. “It just needs to be addressed.”
When the contract was signed in 2007, Perry County paid $50,000 that year for Thornville’s sewer service. When the contract ends in 2021, Perry County will be paying Thornville $98,996.58 a year.
“I’ve been approached informally on two occasions prior to the (Dec. 10) council meeting,” said Mayor Gavin Renner. “Both times county commissioners have indicated they have a concern with the five percent annual increase on the sewer contract. They also expressed this at the meeting. We haven’t been provided any additional detail other than the cost is increasing on an annual basis as per the contract.” No alternative plan has been discussed or proposed.
Renner said the sewer contract has a flat-rate yearly charge that began at $50,000 to be paid in two annual installments. With the five percent annual increase that amount currently is around $63,000 per year. “The county revenue goes with the other revenues that the village collects from its sewer operations into the sewer operating fund,” he said. The total revenue for Thornville’s sewer operation is projected at $500,000 for 2013. The portion to be collected from the county represents 13 percent of that amount.
In November, the village processed 2,297,000 gallons of sewer for just Northern Perry County customers. In total, the Thornville plant processed 5,654,000 gallons, so county use represents 41 percent of the demand for Thornville’s sewer service. The village has additional capacity for sewer services.
“In terms of my opinion, I have more questions than answers at this time,” said Renner. “I don’t have a firm enough understanding of where the county is at in terms of their operating revenues and expenditures to understand whether the five percent annual increase in the sewer contract significantly impacts their bottom line creating a loss for them.” He said over the term of the existing contract, so far, the increase has been $13,000. “This might seem like a lot but we have increased costs from a personnel, maintenance and chemicals standpoint in our operations,” he said. “I would expect that all customers on our system would need to bear any cost increases. This would include not only village residents, but also bulk customers such as the county.”
“We entered into negotiations in good faith,” said Thornville Administrator Beth Patrick, who was Thornville mayor when the contract was signed. “I believe the village went above and beyond what we needed to do with this contract.” Patrick said she realizes that Keister was not a commissioner in 2007. She said former village administrator Ron Koehler went over the rates year by year with the commissioners. “They wrote the contract. They sent us the contract,” said Patrick, adding that the commissioners should fully understand why the five percent annual increase is included. “They need to go back to their legal representation and ask how that got there,” she said. “We did our due diligence.”
Patrick said Thornville also has contracts it signed many years ago that still must be honored. “This contract helps both parties,” she said. “They couldn’t build a sewer plant for what they’re offering.”
Council member Dale Brussee said that as of January, all three commissioners will have changed since 2007. “Everybody was on board with (the contract) in ‘07 as acceptable,” he said. “As a village, we still find it acceptable.” He said in 2007 Thad Cooperrider was commission president, serving with commissioners Lonnie Wood and Fred Shriner.
“They knew what they were signing because they presented it to us,” said Brussee. “I’m still in agreement with the contract from ‘07.”
“Because this contract is above $50,000 any change would need to be approved by council,” said Renner. “At this time, council hasn’t done the required investigation or analysis to even start discussing the contract, nor has it decided whether to renegotiate any contracts with the county.” He said at this point conversations have been informal.
“Currently we have a bulk water contract where we provide water at a rate of $2.75 per 1,000 gallons to the county. The county in-turn resells this water to Northern Perry County Water customers. I don’t know at this time what they resell it for but it would include Glenford and Thornport customers,” said Renner.