Red ink threatens future of Campbell’s water plant

Eleven years ago, the city of Campbell, which was in fiscal emergency at the time, tried to sell its water treatment plant to Aqua Ohio Inc. The private water-distribution company offered to pay Campbell $3 million up front and $300,000 a year for a decade.

Aqua Ohio also agreed to pay the city’s $4.2 million debt for repairs and upgrades to the plant.

Unfortunately – given the reality confronting Campbell today – a citizens referendum on the November 2006 ballot blocked the sale.

In 2007, the city of Youngstown offered to buy the plant for less money up front, but then-Campbell Mayor Jack Dill said he preferred the plan to the one put forth by Aqua Ohio because Youngstown was offering economic incentives to stimulate job creation in his city.

Again, a citizens group sought to scuttle the deal.

So, Campbell retained ownership of its water treatment plant, and today faces a flood of red ink on the books.

As Vindicator Reporter Sarah Lehr detailed recently in an important front-page story, the water fund is now six figures in the red, and Campbell city officials are trying to deflect blame.

Political maneuvering aside, the water department’s budget could reflect a negative balance of about $300,000 by the end of the year.

There are several factors that have contributed to the city’s water woes, but there’s one that has been consistent over the years: There aren’t enough customers to make the treatment plant economically viable. It was one of the arguments used years ago when city officials were contemplating selling the plant to Aqua Ohio or the city of Youngstown.

Campbell, which is landlocked, buys untreated water from Aqua and treats it in the city’s plant. It sells water to its 3,000 or so customers and to Aqua Ohio.

Therein lies the problem.

Buying less

In 2014, Aqua began buying less water than it had the previous year, and that has meant a $288,160 reduction in annual income for the city’s water department.

Today, the plant is operating at only about 31 percent of capacity.

City council approved an advance of general-fund money to the water department in 2014, and since then has approved a series of fund transfers to reimburse the general fund.

On June 9, Mayor Nick Phillips, who has blamed his predecessor for the water department’s problems, approved a fixed-service fee increase that went into effect this week.

The fee will increase to $21.75 a month from the current $12.75. At the same time, the water usage fee will decrease to $4.50 per 1,000 gallons from $5.50. Finally, the fixed water capitalization-improvements fee will remain unchanged at $6.75 a month.

The average Campbell household uses 4,430 gallons of water a month.

But while the mayor says the new fee structure is designed to take care of the water fund’s deficit, the question that Phillips, members of city council and residents of Campbell must answer is this: How long can a community that is not growing in population continue to operate a plant that is not profitable?

As The Vindicator story makes clear, neither the mayor nor lawmakers will accept blame for the current state of affairs, and they are involved in an elaborate finger-pointing game.

There is one bright spot in this sordid tale: The state auditor’s office is aware of the water department’s fiscal plight.

Mayor Phillips and lawmakers should meet with state auditors and discuss how the city can get itself out from under the financial dead weight of the water treatment plant.

Firing Finance Director Michael Evanson, as council members George Levendis and Juanita Rich have suggested, may be justified given his failure to reconcile the books in a timely fashion. Evanson said at the June 15 meeting of council that he had completed the books for January 2016 and was working on February.

The mayor and Levendis gave the finance director until September to reconcile all the books.

But, bringing in a new finance director will not solve the overarching problem in the city of Campbell: a water treatment plant that has not been viable for more than a decade.