Greene County could end nearly 20 years of water service from Xenia because county officials believe the city’s 50-percent surcharge is too high. The move likely would result in Xenia water users paying higher rates.
“You have failed to provide any reason for the surcharge, at any level, other than the city’s dependence on it as a rate subsidy for the the rest of the customer base,” wrote Greeene County Administrator Brandon Huddleson in an email to Xenia City Manager Brent Merriman on Thursday after months of negotiation.
By Thursday night, Xenia City Council authorized the city manager to negotiate a 20-year contract for water services with Greene County that includes a 20-percent water surcharge.
“I’m not willing to play Russian roulette with the county,” Councilman Dale Louderback said.
Greene County would need to build its own water system for customers in Wilberforce, Shawnee Hills and the Village of Cedarville, if it splits from Xenia when the current contract ends in 2018.
Xenia City Council members and staff said, if that happened, the city would face a revenue loss that would result in significant water rate increases for city residents.
If the county agrees to a 20-percent surcharge, the city estimates it would lose about $100,000 a year, Merriman said during Thursday night’s council meeting.
A reduced surcharge and increased water rates could also impact the city’s ability to attract new businesses, Merriman noted.
The majority of council said they did not want to risk losing the water revenue from the county.
“I say we take the 20-percent surcharge and run because you did mention it would cost the city $800,000 to $1 million a year in 2018 if the county does its own water,” Louderback said. “We don’t have that kind of money. We’re on a shoestring budget.”
Greene County also has a water agreement with the city of Dayton and pays a 10-percent surcharge.
“It (the 50-percent surcharge) is not in line with other municipalities,” Huddleson said.
The county estimates infrastructure and equipment for the new water system will cost $6.5 million.
In 2015, Greene County paid Xenia $713,520 for water services, however the county collected $633,358 from these customers. The amount paid to Xenia coupled with an average of $87,530 in debt service and $35,922 in personnel costs left the county with a $203,614 deficit, according to county documents.
“The city does not own, repair or service the lines, valves, meters, towers, pumps, etc. in the system. The cost to provide water to the county is arguably less than the balance of your customers for this reason,” wrote Huddleson in the email to Merriman. “The number is arbitrary and by your own words, provides a ‘profit margin’ for the city. We cannot and will not continue to pay a premium for water at the expense of our customers simply so the city can profit.”
The county entered into agreement with Xenia to provide water for Wilberforce, the Village of Cedarville and Shawnee Hills, in 1998.
“We are now a couple of miles away from where this Xenia connection is with our own water,” Huddleson said. “So now it’s economically viable for us to run a line and connect to our own. We have plenty of capacity. We can handle it. We can service those customers on our own and completely reduce our expenses completely with the city of Xenia.”
Central State University has approached the county about connecting to the new county water system once it has been completed, Huddleson said.
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