MVSD State audit suggests changes

Officials said the entities used for comparison sell directly to customers rather than through member cities like MVSD does.
By DENISE DICK
VINDICATOR TRUMBULL STAFF
MINERAL RIDGE -- The Mahoning Valley Sanitary District should reduce employee compensation, cut back on overtime and sick time used and filter the cost savings to capital improvements.
Those are some of the 74 recommendations listed in a performance audit of the district released this morning by state Auditor Jim Petro's office. The board of directors requested the $83,000 audit in May 2001.
The board of directors "inherited an entity with an outdated facility, a large amount of debt and relatively high water rates already in place," limiting their ability to address MVSD infrastructure issues, the audit said.
Kim Norris, a spokeswoman for Petro's office, said the recommendations aren't binding.
"It's simply things to take a look at," she said.
"The district has an outmoded facility, a large amount of debt and relatively high water rates already in place," Petro said in a news release. "This audit can help district officials implement innovative strategies to meet its fiscal challenges."
MVSD still has about $50 million in unmet capital needs but is carrying too much debt for past projects to issue more bonds, Petro said.
C. William Burgess, board member, said the board will review the report.
"I think there are some good ideas in it," he said. "I don't agree with everything in it."
One suggestion is expanding the number of board members. The councils and mayors of member cities Niles and Youngstown each appoint one director resulting in a total of four -- two representing each city. The audit suggests increasing that to five or seven to have an odd number.
But Burgess, who was appointed by Niles council, wonders how an odd number would work as far as which member city would make the appointments.
Alfred J. Fleming, board president, said an even number of directors hasn't presented problems.
"I believe we work well together as a board," said Fleming, who was appointed by Youngstown Mayor George McKelvey.
Because the makeup of the board is set forth in the Ohio Revised Code, the law would have to be changed to expand the number of directors.
Auditors said MVSD customer rates are relatively high, providing little flexibility for the board to address capital and operating needs through a rate increase.
"The inefficiencies created by the antiquated facilities, costly provisions in the labor contracts and a rate structure that only meets current debt requirements, represent major challenges to the [board] and its efforts to plan for MVSD's future," the report said.
Fleming doesn't think customer rates are high. "I believe they're off the mark on that, truthfully," he said.
Fleming referred to a recent meeting MVSD officials had regarding bond financing where MVSD rates were viewed as low.
Renovation interrupted
District officials have talked for months about the need to update the facilities. Some of the equipment at the district dates to 70 years ago. A capital improvement project got under way in the mid-1980s but stalled in 1997 when a state audit found the project had been mismanaged.
The water treatment operations at the Appomattox River Water Authority in Virginia and those in Akron, Lima and Toledo were used for comparisons. Because these are municipal water systems, MVSD officials said they aren't comparable to MVSD, which supplies water to 300,000 customers in Mahoning and Trumbull counties through member cities Youngstown and Niles.
Those cities set the rates for their customers.
The entities used for comparison sell directly to consumers.
Use of sick time and overtime also is higher at MVSD than in the districts used for comparison. The report said the average MVSD worker used 14 sick days in 2000, about three times the number used by the average worker.
But Fleming pointed to a recent news article that found the average Ohio state worker used 10.5 sick days last year.
The district's workers' compensation premiums were up to double the average for similar organizations in recent years.
The audit suggests hiring a part-time staffer to implement human resource policies at the district.
Contract language
It also says restrictive language in employee contracts limits the board's ability to oversee the district.
The board "should focus future labor contract negotiations on reducing high compensation and benefits costs to be more comparable to peers," it said.
Under the current pact, compensation for union staff is 8 percent to 10 percent higher than in the water districts used for comparison.
"MVSD could eliminate this disparity by negotiating to have union employees pay 8.5 percent of their pay toward their Public Employees Retirement System contribution, which is typically paid by the employee in most organizations," it said.