Water — fresh drinking water is VERY important to every community. We do not need to look far in the news to see the importance of this. Our neighbors to the north in Flint, Mich., have been dealing with this because of their cost-cutting measures that led to tainted drinking water containing lead and other toxins. I want you to know that here in the city of Piqua, we have been very diligent over the past years to address EPA requirements to make sure that we do not have happen here what did in Flint, Mich. As you may know, the city commission is voting on two ordinances which have their third reading at our next meeting on Jan. 17.
The first ordinance has to do with rate increases for our water. The first thing I want to remind our citizens is that our city charter requires that our utilities be self-supporting. That means that we cannot move money from one enterprise fund to another to help cover the costs. Our soon-to-be-open new state-of-the-art water treatment plant is necessary for EPA requirements and will be a huge plus for our citizens and community, but it does cost money and our rates will now rise to pay back the loans we took out for the construction of the plant.
The second ordinance has to do with rate increases for our wastewater. I agree that no one wants to see rates raised, but in my research on both of these ordinances, the fact is that EPA requirements have changed over time which requires that the city meet the new mandates. Because of new EPA requirements, wastewater treatment plant requirements, we must address their concerns and mandates to bring it up to EPA standards. The plan is for the existing wastewater treatment plant to be upgraded to not only meet EPA SSO (Sanitary Sewer Overflow) requirements, but also for new treatment process mandates.
The truth is that over many years, we have not raised our rates the way we should have on a more consistent basis. Actually, what I discovered was that for over 10 years decades ago, our wastewater rates were not raised at all, and the same with our water rates. I believe that if we did this on a more consistent basis, the truth is they would not be so drastic now… even so, this is where we find ourselves.
The current increase of rates for wastewater is so we are able to show that we can pay the debt service and operation costs for the wastewater treatment plant along with maintaining the wastewater collection system. If we cannot show that our rates can meet these financial obligations, we will not be awarded a state loan, which would require us then to obtain funding from the bond market resulting in an increase in the debt service and require us to have an even higher wastewater rate increase.
Our current loan application with the state is to repay only the design portion of this project. The loan repayment requirement is five years. The rates proposed over the next four years are to help ensure that we can fulfill that obligation. Without a sufficient repayment plan to our construction, loan application would be in jeopardy. That would mean that we would have to go out for funding on the bond market which certainly would not be at a low or zero interest rate.
Soon, we will be applying for another loan from the state for the construction portion of the project, which would also be a 0-3 percent interest for a time period of between 20-25 years. Up to 70 percent of the construction may be eligible for zero percent financing. If that loan is approved, we could possibly roll the design loan into the construction loan and finance the total for the 20-25 year period spreading the costs out and preventing higher rate increases.
As your mayor, I wish there was a better solution, but in speaking to staff at the city in a variety of positions from our city manager on down to wastewater treatment plant employees, I see no other way to reduce rate increases and still meet our financial obligations in completing the project. As I said, we are under the requirement of upgrading the plant per our last issued EPA permit. Failure to meet this requirement could result in daily fines to the city, and/or loss of our operating permit (which means the state would come in an operate the plant and have full control of rates).
This is a very tough issue, and as I said, I have spent the past two weeks doing my homework and asking questions. As I am in my first year on the commission, I have had to bring myself up to date with the history on this project.
The city has been dealing with this issue of EPA requirements since the early 2000s and the City Commission was brought into the loop from the beginning. The city moved forward and in 2014 the Commission authorized the preparation of a facility plan and preliminary engineering report for the improvements needed at our wastewater treatment plant. There were many work sessions following this to bring the city commission and community up to date. In November, we submitted design documents for the wastewater plant upgrade and expansion to the Ohio EPA. We should have their approval in February or March 2017.
I hate to have this happen because I know this will affect our low-income citizens and our senior citizens as well, I feel though if we do not pass this ordinance now that the rate increases will be even higher for us! It is not an easy choice, but one I feel that we have to make, because if not the consequences will have a much bigger financial impact on our citizens. Unfortunately, from all I have looked at I see no other way around this, and I feel it is in the best interest of our city and will help to move us forward. Progress costs money — it always does — but I believe the end result will be most beneficial for us in the years to come.
Kathryn “Kazy” Hinds is the mayor of Piqua. Reach her at email@example.com.