NEW WATERFORD - Council held a first reading last week on an ordinance restructuring utility rates, with the goal of updating the village's aging water and sewer lines. According to Fiscal Officer Dave Slagle, the ductile iron lines are World War II vintage and need to be replaced after nearly 73 years.
The problem isn't just clogged lines - there are breaks, too. Slagle said less than $6,000 was spent on water line repairs in 2012, and $12,000 was set aside for 2013. "We were through that by the end of February," he said. "That woke us up."
However, the village was also stung by a grant application for infrastructure money that was rejected on a technicality officials knew nothing about. At a March grant seminar, the village learned about a 1.5 percent median household income (MHI) threshold it had to meet, otherwise it would remain ineligible based upon the rates it is charging.
Slagle said a key to obtaining grants is communities demonstrating a willingness to help fund themselves by enacting what are called affordable rates. He explaining that median household income figures derived from the U.S. Census are used by grant and low-interest loan agencies like the Ohio Environmental Protection Agency, the Ohio Department of Development, the Ohio Water Development Authority and the U.S. Department of Agriculture.
According to 2010 census numbers, the MHI for the village increased to $41,750 since the 2000 census, a jump of over $10,000.
The estimate to replace the deteriorating water and sewer lines is about $15 million - $7 million for water lines and just over $8 million for sewer lines. There are seven miles of each for a village with 465 water customers and a fewer sewer customers. Slagle said there's no way the village can afford it without grants.
Coming to financial terms with it means rate hikes, and last week council took the first step toward removing its name from the grant ineligibility list. Mayor Shane Patrone said council expects a little anger.
"No one wants to pay more, but nothing's been done for so long we have to address it before it gets worse. I think they all recognize the severity of the situation. It's a hard decision, but it's our only option."
After hearing Patrone and Slagle explain the numbers, Councilman Tom Cresanto said, "We are in dire straights, so we have to do something."
Councilman Gary DeMarchis said, "Believe me, it hurts me to have to do this. But we have to catch up."
Slagle explained that the base rate restructuring is the first step in addressing the issue, and the ultimate goal is reaching a $25.25 base rate for water and a $25.25 base rate for sewer by 2017.
Dealing with water first, the base rate will increase from $19.75 to $22.25 on Sept. 1 and will reach $25.25 in December, with another $3 increase, bringing it to grant eligibility.
There will be no increase after that until January 2015 when the base sewer rate will increase from $15.25 to $17.25, with another $2 increase in July of 2015 to $19.25; another $2 increase in January 2016 to $21.25; another $2 increase to $23.25 in July of 2016; and, finally, a $2 increase in 2017 which will bring it to $25.25.
"We've been working on these rate increases for the last six months to make it as fair for everyone as possible and with the least impact," Slagle said. "We want to do it as inexpensively as possible for the residents and do it with grants. Without grants it would be four times as expensive."
Patrone said the project is so large it has to be spread out and "piece mealed."
He said, "I don't think we can do it all at once."
He didn't foresee any levy issues that might crop up to pay for loans or matching funds.
"The increases here will give us some money to match funds if extra money is necessary," he said.
The timeline is to have the water lines replaced by 2017 and then begin the sewer lines in 2017 when the MHI is at 1.5 percent for the sewer rates.
Slagel said they'd like to have the sewer lines replaced by 2020.
The sewer lines will take longer and cost more because they run under the village roads, which will have to be repaved.
For now, Slagle said most of the sewer problems are at the plant itself but are getting straightened out with the new chlorine system and green sand.
A special meeting for the second reading on the rate restructuring ordinance was set for 6:30 p.m. June 25.
Slagle, the mayor and council members encourage residents to attend that meeting with questions regarding the rate increase.