Sheila McLaughlin reports:
With water rates among the highest in the state and prices continuing to rise, Butler County commissioners are looking at building a county-owned water plant to keep rates under control.
Documents obtained by The Enquirer under a public records request indicate that constructing the plant with a price tag of up to $100 million now ranks first in the county’s list of options after a deal fell through to buy Hamilton’s south water treatment plant for up to $70 million. The county’s water system serves about a tenth of the county’s population; and expansion would be paid for by the users.
“We can build a new plant and still have a cheaper rate for our customers, cheaper than if we just stay with the City of Hamilton’s rates as they move forward. Obviously that’s a no-brainer,” Commissioner Don Dixon said.
“What’s killing us is the water rate continues to increase. It hurts our economic development and it’s killing our residents. The fact is we have to do something now or our rate is not sustainable.”
Chris Wunnenberg, a West Chester resident for more than three decades, has seen first-hand what the water rates are doing to manufacturers looking for a place to land a new plant. He’s development director for Schumacher Dugan Construction based in West Chester.
A water cost survey by the City of Oakwood, Ohio, showed Butler County was on the high side, ranking 21st most expensive of 66 Ohio governmental water suppliers in the survey.
“When we supply utility rates as part of the search criteria, we never get a call back,” he said. “It’s more than how much money it costs me to water my lawn or run the washing machine or showers in my house. It also costs us opportunity.”
Dixon, who has been working witha team of county officials to come up with a solution, said he would like to have contracts signed in six months to build a water plant and to cap Hamilton water rates to the county until the 20-year contract runs out at the end of 2021.
The approach would stabilize water rates in the near future and reduce them in the long run, Dixon said.
The team also is balancing other options including buying into the separate Middletown water system as a partner and buying all water from the Greater Cincinnati Water Works, which could provide the same minimum 8-million-gallons-per-day flow as Hamilton for $3 million less, Dixon said.
Greater Cincinnati Water Works, owned by the City of Cincinnati, currently provides a smaller portion of Butler County’s water at a cheaper rate. The Butler County system serves 38,000 water customers in West Chester and Liberty Townships and a portion of Fairfield township. The Cincinnati agreement runs out at the end of 2025.
County officials said that cost of purchased water has jumped from $9.5 million in 2008 to $11.6 million in 2013 and will continue to rise unless fixes are made to the contract with Hamilton.
Butler County pays $2.78 per 1,000 gallons of water from Hamilton, while Hamilton’s treatment costs are 80 cents, county documents show. The base cost continues to rise annually. By comparison, Butler County pays Cincinnati $1.66 per 1,000 gallons of water. Butler County then tacks on another charge to its customers for debt repayment, maintenance and capital improvements for the water system.
The county is Hamilton’s largest customer, providing $8.2 million of the projected revenues through 2014, while Hamilton customers provide $7.6 million of revenues generated from Hamilton’s water billings.
“It’s tied to the (Consumer Price Index). It moves every year, continually goes up. And the more it goes up, the more it’s out of balance, the worse it gets,” Dixon said of the Hamilton contract, which he called “disastrous.”
“We’ve been subsidizing Hamilton’s rate tremendously. And they have artificially kept their residential rate down while ours went through the roof,” he said.
Hamilton City Manager Joshua Smith said the city is working to amend the water contract with the county.
“As our largest water customer, it is our intent to take care of them,” Smith said.
Internal documents The Enquirer obtained from Hamilton show the city actually needs the contract with Butler County.
A public relations document prepared by officials when residents started questioning the sale of the water plant this summer says city customers would see a 65 percent increase in water rates “if the city does nothing with the water situation” between now and the end of the 2021 contract.
Local water rates vary widely because of geography, climate, population, a water company’s borrowing costs and other factors. That makes it virtually impossible to compare one government’s water rates to another’s.
The city only needs 8 million gallons of water per day for its residents and businesses yet the two water plants are capable of producing 46 million gallons per day, the document said.
Catherine Stoker, a long-time trustee in West Chester, said it’s high time the county controls its own water system. The township, with 18,468 customers, accounts for 56 percent of total revenues billed for water consumption in the county system.
She called the county’s water agreement with Hamilton a “predatory contract.”
“Until the county has its own source of water that it can depend on getting at a reasonable market rate, this is a problem we’re going to be having,” Stoker said. “The day you break ground on your own water plant, the City of Hamilton will come to you with an offer they believe you can’t refuse.”