Mayor says no to Aqua's bid for Youngstown water system

Youngstown's water system isn't for sale or lease, the mayor says.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- While Youngstown waits for a study to show how it can better use its water system as an economic development tool, Aqua Ohio is offering to buy the city system.
In a letter to Youngstown Mayor Jay Williams, Walter J. Pishkur, Aqua Ohio's president, wrote that he estimates the sale of the city's water system would generate at least 50 million that could be used "to fund key community projects."
Pishkur also wrote the city could lease the water system, as well as sell or lease its wastewater system.
The city isn't interested in selling or leasing either system, Williams said.
Pishkur mentions in the letter that "if the sale was to an operating utility like Aqua, it would expand the customer base and increase sales for the Mahoning Valley Sanitary District.
The MVSD sells water in bulk to Youngstown and Niles, its two member cities, which then sell it to their residents and other communities. About 300,000 Mahoning and Trumbull counties residents get their water through the MVSD. Aqua Ohio attempted to buy the MVSD in late 1995, but officials with Youngstown and Niles rejected the proposal in early 1996.
Economic argument
Pishkur points out that a sale to a for-profit company would increase Youngstown's property tax base for city schools and city operations including fire and police. He also wrote the money from the sale could be used to reduce the city's 2.75 percent income tax, create jobs, fund economic development projects and address the crime rate.
Williams said a one-shot cash infusion from sale of the water system would not benefit the city in the long term.
The city is expecting to receive the results of a 100,000 study of its water system by mid-May. The study will advise the city how its water distribution system could be a benefit in the formation of Joint Economic Development Districts with surrounding communities.
Officials in Austintown and Boardman are concerned that Youngstown may want to annex portions of their townships through the JEDD process. Williams has said that the city isn't considering annexation and that the JEDDs would financially benefit the city and the townships.
Boardman trustees are concerned enough that they agreed last week to ask Aqua Ohio, which serves about half of the township residents, to submit a proposal to supply water to all of Boardman. Youngstown supplies water to the other part of Boardman.
Campbell water plant
Also, Youngstown and Aqua Ohio are interested in buying Campbell's water-treatment plant and distribution system. Aqua uses Campbell's plant to treat a large amount of water it sells in Mahoning County, particularly to Struthers, Poland and its portion of Boardman.
In state fiscal emergency, Campbell wants to sell the water plant to generate much-needed money, said Mayor John Dill.
The city had a tentative agreement with Aqua in 2005 to sell the plant for 3 million up front followed by 300,000 annually for a decade as well as Aqua's paying the city's 4.2 million debt for repairs and upgrades to the plant. But a citizens referendum on the November 2006 ballot rejected that deal.
Youngstown is offering to buy the Campbell plant for less money up front than Aqua, Dill said. But Dill said the deal is better for his city in the long term because Youngstown is offering to use Joint Economic Development Systems to boost Campbell's ailing economic base, Dill said.
A JEDS is done between cities while a JEDD is done between a city and a township.
A JEDD or JEDS would permit Youngstown to provide economic incentives -- such as facade grants and water lines -- to businesses in other communities that can't offer those items themselves. A JEDD or JEDS is typically done on undeveloped land, but Youngstown is interested in creating them at established business locations.
"We're interested in their programs that would allow us to redevelop our brownfields," Dill said.
On hold
Any further talks with Youngstown about the plant purchase will have to wait, Dill said. That's because the group that led the charge in the referendum in November submitted to the city on Friday petitions to forbid Campbell from negotiating with any entity to sell the facility.
If Youngstown bought Campbell's plant there are a variety of options for the city including selling water to Aqua Ohio or seeking to purchase the for-profit company's waterlines in Struthers, Williams said.