Affordable Water?

I recently read an article on water affordability called “Affordable Water in the U.S.A

Burgeoning Crisis.”  It was released in January 2017 by writers from Michigan State University.

It’s general statement of rising costs to provide water and wastewater service to all users is very accurate. Many ignored capital improvements are being done after decades of neglect with less state and federal grant money which are being funded by rate increases instead.

For too many years, rates were left stagnant with few improvements, repairs and replacement work getting done. Besides, no one likes rate increases.

But even general operating expenses were increasing such as other utilities, chemicals, labor, equipment which may not have been matched to simply break-even.

Will all water and sewer rates continue at this same rate? It’s hard to say. Most utility providers do annual budgets to keep an eye on any such moves of income or expense and adjust accordingly. However, most have some plan for capital improvements even if its “repair and replacement” work that needs annual attention by the local suppliers.

The article draws conclusion based on US-wide rates that have been averaged without many local impact reviews. A simple forecast based on stagnant incomes leads to the conclusion that water and sewer services may be unaffordable. It ignores minimum usage and minimal bills with ongoing efforts to recycle, reuse, and reduce their usage (which may reduce their monthly bills!)

How do we reduce the risk?

I believe, there’s not one simple answer to that. Obviously, increased grants help fund capital needs. But normal everyday operation and maintenance costs need users to help fund the basic costs of treatment and delivery. Preferably, larger customers help and more customers help as well.

But regional efforts surely help reduce costs and increase efficiency for all users. We have fewer administrators and staff with less equipment which requires us to be mindful of our resources!

Senior Discount

From time to time our board is asked to consider public policy ideas that affect a minority of our users, rather than a majority.

Recently, a Wood County village asked the District’s board to consider implementing a “senior citizen discount.”

It’s a normal, fair request to give a break to a portion of our users who may have financial difficulty with their monthly bills. Who wouldn’t support this idea?

This is a dilemma for a public agency.  However, other agencies in the region offer something similar already. Why do some agencies offer discounts or special programs while others do not? Why isn’t there more continuity or consistency in matters like this?

Let me share my answers, which may be different than our board members.

1. All utility companies are different (from water to sewer to electric to gas).
2. Some are “for-profit”, some are “non-profit”, some are government and some are
private.
3. Some have privately appointed boards, others elected officials, others are appointed by
elected officials.
4. Some operations are funded by tax dollars and some are self-supporting.
5. Some geographical areas are more economical to serve and some are more difficult to
reach and more complex to operate, which may cost more.
6. Some are primarily residential, while others have larger commercial or industrial users to support their operations.
7. Some systems are new with debt, some are old with little debt while others are in between.
8. Some are in good overall condition, some are worn-out and in need of repairs and cash
to fund them.
9. Some have operating and treatment problems with Ohio EPA and some follow the rules
and take care of themselves.
10. Some have professional operators and some need additional education, better staffing and motivation for them to operate efficiently, safely and economically.

Summary
I’m not writing all of this to confuse the issue but to explain different organizations do
different things for different reasons. Policies vary by industry and by organization. Some have more resources to use than others.

For the District, senior discounts, low-income discounts, single-family, commercial,
industrial discounts are difficult to introduce without support or subsidizing by another
customer class and administrative costs to implement and maintain from year-to-year.

The board has chosen not to offer these discounts without another funding source than
raising rates to others. It seems fair to all users, without exceptions.

Jerry Greiner
President

Regional Water Discussion – March 2017

Last week, the City of Toledo shared it’s proposal on regional water issues.  Unfortunately, the mayor’s comments and position on the details were not well received.

For example, Toledo’s Mayor says they will not share ownership of the existing plant. While this is one of the main items several of the 9 contract communities insist upon!

Thus, the conversation during the meeting did not bring the parties any closer on the issues. So, the they agreed to hire a facilitator to come in to help. The expectation would be for the facilitator to identify the issues, discuss the various related position(s) on them and move towards agreement, where possible.

That is a tall order after 35-40 years of water service that has included multiple utility policy changes by Toledo through the years.  Most have allowed Toledo to raise the prices, get income tax-sharing and written regional economic development language into the water contracts during that time.

Meantime, the Wood County Economic Development Commission has authorized the funding for a second phase of the Wood County study looking for alternatives. This effort should be completed in the next 4 months. It will detail both design and financial aspects of alternative water options, so side-by-side comparisons can be done of them.

For the District, it’s not about ownership or politics, it’s about our customers.  Throughout these talks, we want the best rate and safe, quality water for our customers. Period.

More soon!

Jerry Greiner
President

Regional Water Participation

What does that mean to you as a customer?

It should mean that a regional entity, most likely a government organization, owns and operates a water system (or sanitary sewer or storm sewer system) for non-profit while delivering quality service on a uniform, system-wide basis.

What does that mean to the City of Toledo?

They already are “regional” in that they meet the definition above. In their mind, for the last 50 plus years, they have operated the water system in that manner.

What does that mean to the outside “purchase communities?”

The 9 outside governmental agencies may not agree simply on the definition of “regional,” when it comes to the treatment of the water, its rate/cost, and the decision making.

For example, Toledo’s rates vary and their additional surcharges, income-tax sharing rules and other added requirements have pushed many to the edge on these requirements. They exceed the rule of fairness being reasonably priced and motivated to the buyers.

When does everyone (buyer &sellers) agree on its definition and how it will operate?

Let’s hope meetings and discussions continue between the buyers and sellers of our water so that they can define what it is and how it will operate. Otherwise, some irreplaceable decisions could occur that could be costly for all end users.

Regional Water Update

Full Support

All purchasers and seller (Toledo) approved a resolution to support a regional approach to water sales in northwest Ohio recently.

That’s good!

Now What Does That Mean?

There is a full committee of staff and elected officials who meet approximately every 6 weeks to discuss related issues. As well, there are two subcommittees of staff and legal representatives who meet and discuss items of their interest.  These 2 subcommittees try to recognize and address items of mutual concern.

What Happens Next?

Those subcommittees, in particular, will continue to meet to research issues, share understanding(s) of items and seek alternatives or options to which they will address and satisfy everyone’s needs.

That will be no easy task!

TMACOG Water Study

A recent Toledo Blade article covered the ongoing issue of regional water. It explains a forthcoming meeting of TMACOG, in which area governmental leaders will meet to discuss support for a non-binding agreement that addresses mutual priorities for water quality and sales.

Who Cares?

There are 9 governmental contract purchasers whose contracts (to purchase Toledo water) expire in the next 7-10 years. Each of them, including the Northwestern Water & Sewer District, would like to see uniform, equal rates and have input on rates.

If this isn’t accomplished, several of the nine buyers have economical options, they have never had to buy elsewhere as Toledo’s water rates have gone up due to long-neglected plant repairs and replacement work.

If some, or all, of these 9 buyers were to leave, those remaining customer’s rates would need to go up even more to make up the difference in lost revenue from the outside purchasers.

What’s Going to Happen on Wednesday, January 11, 2017?

These political subdivisions are meeting to discuss this non-binding agreement seven of the nine local governments have approved it, but Toledo has not.

The rumor behind Toledo’s reluctance (to endorse this) is the general language of the agreement. With a mayor, council, their attorney’s and staff all involved, they cannot agree on what they are willing to commit!  Meantime, past elected officials in Toledo have been involved as well.

It’s a real mix of parties.

If there’s no real action this week, maybe its two weeks later, maybe its two months later. The various political subdivisions can continue to meet and talk about their similarities and differences.

So?

Those political subdivisions will have to decide when to stay at the table for discussion or start spending money further studying their options to make good solid thoughtful decisions.

More Talk on Regional Water Studies

If you recall, there have been 3 efforts to look at water needs in our region. These include:

  • TMACOG’s study looked at Toledo’s water facilities for the region, estimating both capital costs and rates for the next 40 years.
  • Sylvania’s study looked at leaving Toledo’s system and building a new water treatment plant and intake for use by Sylvania and southern Monroe (MI) county areas.
  • Wood County Economic Development Commission’s (WCEDC) study looked at options for the City of Bowling Green to sell excess capacity to the cities of Perrysburg and Maumee and well as our District (which would resell this water to citizens in Rossford, Walbridge, parts of Northwood, and areas of Perrysburg Township, Lake Township and Troy Township).

All 3 of these regional water studies can be found on the District’s website at www.nwwsd.org.

What does this all mean?

These 3 studies offer 3 very different approaches to serving the water needs of the region. In addition to the areas above, Toledo water is currently also used in other areas such as:

  • Lucas Countyblog-map
  • Whitehouse
  • Fulton County

Currently, approximately 50% of the water use from Toledo’s water plant comes from inside Toledo’s corporate limits and 50% is consumed outside of Toledo in those other areas such as Sylvania, Wood County, Rossford, etc. It is expected that the percentage of “outside areas” use will only increase as each year goes by.

Overall the region’s water demand is nearly the same as it was 10 years ago reflecting less use, more conservation, and more efficient water systems.

Talks between the region’s water buyers and the sellers continue almost weekly over long-term costs, rate increases, and other contractual issues.

Several of the larger users of Toledo’s water have contracts expiring as early as 2024. Because of the time needed to plan and build new facilities or expand old ones, it is by no means too early for all these entities to meet, talk, and plan for the future.

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