Hillsboro residents will likely enjoy permanent relief from the final three years of scheduled water and sewer rate increases that were supposed to take effect in 2014, 2015 and again this year, based on a recommendation agreed to Thursday night by Hillsboro City Council’s Utilities Committee.
Last month, following two straight years of moratoriums on the rate hikes that were first recommended by the Hastings administration in 2014, city council approved a 30-day moratorium on a scheduled September rate increase while the matter was studied further.
Rebecca Wilkin’s Utilities Committee, including members Bill Alexander and Tracy Aranyos, met Thursday, along with Todd Wilkin, the city safety and service director, where Todd Wilkin told the committee that water and sewer revenue continues to outpace expenses. However, Wilkin said the revenue had somewhat decreased, mostly due to substantial leaks being discovered and repaired, including one at Highland District Hospital which had cost the hospital thousands of extra dollars in water bills last year.
But the safety director said the latest report shows an increase in revenue in September, which he attributed to the capture of previous “ghost” users whose water usage was previously included in lower combined bills until council passed legislation this summer that created a formula to bill everyone at a more equal rate, including apartment dwellers in multi-unit residences.
Rebecca Wilkin brought up a question that others agreed had not been addressed – if council did not agree to a moratorium, would that mean that increases scheduled since 2014 would all be enacted, or just the current year?
Alexander, Aranyos and Todd Wilkin agreed that their understanding had been that the previous moratoriums meant those increases had been eliminated, so only the current year’s increase was in question.
At scheduled increases of 3.5 percent each year, water and sewer bills would be more than 10 percent higher today if the moratoriums had not been enacted beginning in 2014.
If future water-sewer increases are needed, council would address it as a new, separate action, not as part of the current schedule, committee members agreed.
The currently-scheduled annual rate increases began when city council, in 2008, approved rate hikes to be triggered each September through 2016. The increases were part of a schedule coordinated by the Regional Community Assistance Program (RCAP) to make sure the city could meet the obligations of loans connected to the new water treatment plant.
But in 2014, the Hastings administration recommended the first moratorium on the scheduled hikes. Council unanimously agreed to the moratorium after the Utilities Committee had also studied the issue.
The ability to begin foregoing the scheduled rate hikes actually had its genesis in a series of events that began in 2013, when, as The Times-Gazette reported, the city had “received nearly $2 million more in federal stimulus money to pay for the (wastewater treatment) plant, and mayor Drew Hastings is exploring how to pass the savings on to city residents.”
As reported at the time, the city was notified in August 2013 by the Ohio EPA’s Water Pollution Control Loan Fund (OWPCLF) that the plant’s original funding from the American Recovery and Reinvestment Act was being increased by more than $1.9 million due to leftover funds, decreasing the amount of a loan by the same figure.
Hastings told council in September 2013 that he was “exploring possibly lowering the water and sewer bills for the citizens,” The Times-Gazette reported. With the additional funds, the city received nearly $7 million in stimulus funds for the project. The loan amount to Hillsboro from the OWPCLF dropped from about $10.2 million to about $8.2 million.
Also in September 2013, Todd Wilkin received an email from Lou Mascari, district representative of the Ohio Public Works Commission, notifying Wilkin that the city had never collected on OPWC funding awarded back in 2008 and 2009, which included a combination of grants and zero-percent interest loans.
“In 2008, Hillsboro applied for and received from the OPWC funding for a project named ‘Replacement of Sanitary Sewer Infrastructure,’” wrote Mascari, adding, “In 2009, Hillsboro applied for and received from OPWC funding for a project named ‘WWTP Expansion/By-Pass Elimination.’”
Wilkin began investigating the matter, and he reported on the subject at the next council meeting of Sept. 9, 2013, noting that the administration had gone through past agreements, commitments and contracts to try to determine why the money wasn’t used. The funding amounted to $555,000 from 2008 and $610,000 from 2009.
To take advantage of the OPWC money – which he called “found money” – Wilkin had to go back to both the Ohio Valley Regional Development Commission and the OPWC to request permission to use the funds under a different scope of work. His requests were granted, and the funds were put toward more wastewater infrastructure repair, as well as the replacement of 2,250 feet of failing sanitary sewer collection lines, both of which Wilkin reported on at various council meetings in late 2013 and early 2014.
Meanwhile, in 2014 the Utilities Committee began studying the feasibility of placing a moratorium on the next 3.5 percent water-sewer rate hike scheduled to take effect in September of that year. The Hastings administration recommended a one-year moratorium on the rate increase, and council passed the measure unanimously, doing so again in 2015.
In another matter Thursday, committee members expressed their agreement with a recommendation by Todd Wilkin – based on an idea he credited to Gary Lewis, the city auditor – to redirect $2 of the water-sewer bill surcharge on each water-sewer bill to a new storm system enterprise account.
The change will not increase the surcharge or the water-sewer bills, but instead create a fund that will apply roughly $64,000 annually toward mapping the storm sewer system, as well as for overall storm sewer maintenance, in an effort to address a problem with storm water runoff inadvertently going through the sewer treatment system.
The full council would need to create the new enterprise fund account.
Reach Gary Abernathy at 937-393-3456 or on Twitter @abernathygary.