City to let Aqua run water system

Selling the plant will bail the city out of its fiscal crisis, the mayor said.
By HAROLD GWIN
VINDICATOR STAFF WRITER
CAMPBELL -- Aqua Ohio Inc. could take over operation of the municipal water plant within 30 days.
City council approved a contract Wednesday that will have Aqua run the water system and, perhaps, eventually take over ownership.
Mayor John E. Dill signed the contract after the meeting, and it will take effect in 30 days, he said.
The deal was ratified in a 3-1 vote with Robert Yankle, council president, casting the dissenting vote. Councilmen Joseph Mazzocca, Michael Tsikouris and Lew Jackson voted for the contract, and Bryan Tedesco was absent.
Objections
The approval didn't come without some last-minute objections.
Several people in the audience questioned the wisdom of the arrangement, suggesting that it is in the city's best interest to keep the water system.
"I just don't understand why we're giving up our only asset," said Denise Sarigianopoulos of Porter Avenue, a former councilwoman.
She said she realizes that the city would have to raise its own rates if it were to keep the plant but suggested that is an acceptable price to pay for retaining ownership.
"I would say, raise the rates and let us keep our asset," she told council.
Laura Phillips of Sycamore Drive asked if council members had investigated Aqua Ohio's past dealing with consumers, pointing out that the Ohio Consumer Council has a file of the battles it has waged with Aqua Ohio on behalf of consumers.
She also raised a concern about the quality of water that Aqua will provide.
George Ginnis, water plant superintendent, said Aqua Ohio faces the same Ohio EPA water quality regulations that the city faces. Aqua will use the same employees the city uses to continue operating the plant, he added.
Reason for opposition
Yankle said he voted against the contract because he opposes handing the plant over to a private company.
If Campbell wants to get out of the water business, it can buy water from Youngstown at a cheaper rate than it can produce its own, he said.
Dill said the contract with Aqua Ohio is truly the city's best move.
It will help the city survive its current fiscal crisis, he said.
The city started the year with a $301,000 deficit, and that number is expected to grow to $364,000 at the end of the year.
The agreement is a 10-year deal under which Aqua will run the system and collect consumer payments.
In return, the company will pay the city $3 million up front and $300,000 a year for 10 years.
Further, it will put up to $100,000 a year into system capital improvements.
In addition, Aqua will pay the cost of employee salaries and benefits for the plant, somewhere between $565,000 and $1 million a year, depending upon how many employees stay with the city, and cover the $4.2 million in debt service on the water plant, said John Leskovyansky, city finance director.
Looking ahead
At the end of 10 years, Aqua Ohio can opt to take ownership of the plant at no additional cost.
Leskovyansky pointed out that the city's water fund is expected to run $140,000 into the red by the end of this year.
If the deal didn't go through, the city would have to raise its flat fixed debt service fee from $5 per month per customer to about $7 per month and the base water rate would have to go up about 12 percent to cover the deficit and provide operating capital for next year, Leskovyansky said.
The average residential monthly bill is about $28, which includes the base fee and the debt service fee.
Upon questioning from Mazzocca, Leskovyansky said Aqua Ohio buys about $300,000 worth of water from Campbell's plant each year. Should the company decide to get its water elsewhere, the city would have to raise rates as much as $8 per customer per month to cover that revenue loss, he said.
Turning the operation over to Aqua Ohio doesn't mean rates won't go up anyway.
The agreement spells out that rates will stay as they are for a year but then rise by 4.9 percent annually over the next four years.
After that, Campbell rates will be set at the same level that Aqua will be charging Struthers and its other customers at that time.
gwin@vindy.com