George W. Davis
GREEN: City Council is expected to vote next month on supplier Aqua Ohio’s proposed water rate increase of 3.5 percent for each of the next four years.
For nearly an hour Tuesday night, council members grilled Ed Kolodziej, president and chief operating officer for Aqua Ohio, on how the rate hike can be justified in light of the current economy.
The city’s contract with Aqua Ohio expired Dec. 31. The proposal calls for the increases to begin April 1 and run through Dec. 31, 2016.
Council could vote on the request April 9.
Green is part of Aqua Ohio’s Stark Regional Division, which includes the city of Massillon and smaller areas, including Jackson and Perry townships.
Rate increases for the past three years were 5 percent the first year and 4.75 percent each of the past two years.
Based on figures Aqua Ohio supplied, the increase for average residential consumption of 1,000 gallons per month would be $1.36 this year, then $1.42 cents starting next Jan. 1. For 2015, the increase would be $1.44, then $1.51 beginning Jan. 1, 2016.
Councilman-at-large Gerard Neugebauer said he is concerned it appears Green customers are paying for systemwide growth because the city is expanding its water system with installation of new pipes to add more customers while pipes in other areas are being replaced and not generating new revenue.
Neugebauer acknowledged that 3.5 percent isn’t an exorbitant increase.
Joel Reed, who chairs council’s Intergovernment and Utilities Committee, explained that Aqua Ohio owns all of the city’s waterlines and could be awarded up to a net profit of 8 percent annually if the issue is placed in the hands of the Public Utilities Commission of Ohio for resolution.
Ward 4 Councilman John “Skip” Summerville said “nobody is getting these kinds of raises,” referring to individual workers as well as businesses.
He also noted that Aqua Ohio is the second largest division of Aqua America, which, he said, “is making a great deal of profit.”
He, therefore, asked that Aqua Ohio provide council with the cost per gallon of its water with other systems, such as Akron’s and North Canton’s, to gauge Aqua Ohio’s efficiency.
Kolodziej explained that the increases are needed to cover the costs associated with running a business, including labor, chemicals and replacement of equipment.
He said to meet EPA standards, Aqua Ohio needs to replace a sludge lagoon at a cost of $2.5 million to $4 million.
As part of the proposal, Aqua Ohio has promised to fund city-selected capital infrastructure improvements up to $1.73 million, including $530,000 carried over from the previous agreement.
According to Aqua Ohio figures provided to council, the company’s estimated revenue would total more than $86.3 million.
The seven-page Aqua Ohio presentation showed the company spent more than $2 million on waterline projects in Green between 2010 and this year, with potential projects totaling almost another $20 million.
Councilman-at-large Chris Humphrey said Aqua Ohio still would be making a profit if there were no increase in rates, based on the company’s figures.
Kolodziej said Aqua Ohio is trying to ensure the water supply is safe and adequate for its consumers.
George W. Davis can be reached at email@example.com.