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PT residents outraged over impending water rate hike
(by Katie Sparks, Staff Writer - September 17, 2009)
Prairie Township will use a unique method to battle what they view as unfair utility rate increases.
Trustee Stephen Kennedy announced that he is spearheading an effort to prevent Ohio American Water (OAW) company from mandating a utility rate increase for certain Prairie residents at the Sept. 9 board meeting.
OAW is the utility provider for around 200,000 Ohio residents, said Kennedy.
In Prairie Township, OAW provides water and sewer services to the Lake Darby and Westpoint subdivisions.
Kennedy said there has been an ongoing battle between the neighborhoods and the utility provider against rate increases for the past six years.
According to Kennedy, OAW made a request with the Public Utilities Commission of Ohio (PUCO) to increase rates in June.
“It will be the fourth rate increase asked for since 2005,” Kennedy said.
Ohio American would like to put a step rate increase in place over a four year period.
According to Kennedy, in the first two years, utility rates would increase by 25 percent each year, in the third year there would be an eight percent increase and finally, a seven percent increase in the final year.
Kennedy said currently the average water bill per month for 10 units of water usage, which is average for a household, is $150.
“This time I believe this has the potential to devastate the communities. If this increase is granted in its current form...10 units of water will be over $256 a month,” Kennedy said.
According to OAW President David Little, who spoke at the Sept. 16 Madison Township trustees meeting, the company needs the latest round of increases to cover the cost of capital investments. Although the company is a public utility, it is not a municipal entity, and is mandated to pay property tax, which swallows up 18 cents out of every dollar paid by consumers.
Little said water mains and service lines are all subject to taxation. The company is also required to maintain fire hydrants, flush water lines, replace meters as necessary, operate the distribution system, detect leaks, and inspect manholes.
When OAW initiated a rate increase in 2006, the board passed a resolution opposing the increase, however, the company succeeded in passing that increase.
Kennedy said in 2007 the board challenged another rate increase proposition by investigating the quality of the water residents were receiving.
“In 2007 we turned up the heat a little bit and started addressing some of the quality issues of the hardness of the water they were providing out there,” Kennedy said.
He said improvements were made and rates increased.
Lake Darby and Westpoint subdivisions have the highest vacancy rate of all other areas of the township, according to the board.
“That is mainly due to the high costs of the water bills,” Kennedy said.
Several residents, including Andrew Hehemann from Westpoint, attested to the vacancy rate and the high water bills at the board meeting.
Kennedy said a board meeting was held in mid-August in reference to the impending increase with the other affected townships. Six other townships will be affected, including Sharon, Blendon, Perry, Truro, Norwich and Madison. Out of those seven jurisdictions, five attended the meeting.
It was at this meeting that the township decided the best plan of action would be to hire a public relations firm.
Kennedy said he was aware of two cities in the United States which have had success in rate increase battles by using public relation firms “to bring out all the issues that the case would present for residents.”
One of the cities, said Kennedy, was Chattanooga, Tenn.
Under the Ohio Revised Code, statutory townships do not have the authority to extend money to a public relations firm. Prairie is a home rule township and, as such, has the ability to fund a firm.
The money to hire a firm is not appropriated. However, Kennedy said the board concluded that funding a firm would be possible because there is a $240,000 dollar surplus in the rainy day fund.
“If we don’t do this, this will affect everybody’s tax base if the houses go vacant out there. The tax base that we use for all our money is going to disappear and right now that area out there has one of the highest foreclosure rates in the area,” Kennedy said.
Staff Writer Linda Dillman contributed to this article.
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