PDT Staff Writer
The Administrative Order on Consent which the city negotiated with the Environmental Protection Agency to deal with the city’s Combined Sewer Overflows and related issues will annually cost the city $561,061 over a 20-year period.
One part of the report included three additional employees, one of which would be an assistant director which City Wastewater Director Rick Duncan has asked for before and which has been refused by Council. Now Duncan says it is a necessity that someone be there to help navigate through the project and he has factored in $211,511 for those three additional employees. Council chose to focus in on the salary of the assistant director - $37,198.
“I might ask the Auditor, the $561,000 a year, is that within the guidelines, within the parameter of what we will be taking in?” Fourth Ward Councilman Jim Kalb asked. “Can we cover that payment that includes the employee cost?”
Williams was clear.
“With current revenue? Absolutely not,” City Auditor Trent Williams said. “You’re already in the hole in the Sewer Fund. The bottom line is no. You’re certainly not going to be able to cover any of this with any current revenue.”
Duncan presented Portsmouth City Council with copies of the projected annual cost of Phase 1 of the project that will result in multiple repairs and the separation of the stormwater from the sanitation system.
The various segments of the project include the North Moreland manhole lining, the 25th Street and Coles Boulevard basin, the 2300 block of Grandview Avenue flood issue, the Redwood Alley lining, Upper Lawson Run separation, a storage facility, the Lawson Run separation feasibility study, the large diameter sewer tv project, OERP development and development of the MOM or Management and Operation Maintenance plan and system inventory.
According to Duncan’s document, construction will total $3,480,000, and engineering and other costs will total $840,000 for a total of $4,320,000.
Duncan said he expects the entire project to be paid for through a grant from the Ohio Water Development Authority (OWDA), except for the North Moreland manhole lining which is being paid for through a $136,000 Community Development Block Grant (CDBG).
“I’m assuming the chances of getting something like that are good?” President of Council Steve Sturgill asked.
Duncan indicated the chances are very good.
“We’ll get it,” Duncan told the Daily Times Tuesday morning. “They make loans like that all the time. We’ve had quite a few loans from them in the past. I’m pretty sure that there are some water projects that are funded through them too on the Waterworks side. We won’t have any trouble getting that.”
According to Duncans calculations, with the addition of $15,120 of the OWDA origination fee, the total amount to be financed would be $4,335,120 with an annual debt service of $301,05, which reflects 3.42 percent for 20 years. Add to the annual debt service, the additional employees at a cost of $211,511, the North Moreland debt service of $12,500 and the existing OWDA loan of $36,000, the total cost per year would be $561,061.
“So that would make the overall cost over that 20 year period, $11.5 million,” Sturgill said.
In addition to the assistant director position, the cost of two additional utility workers would be $62,038 for a total of $99,236. With benefits totaling $112,275, those figures reflect the annual additional personnel cost of $211,511.
Several times during the discussion, Council was reminded if they fail to approve and pay for the project, they can expect to be sued by the EPA, which would cost the city a lot more in the long run.
So how would the loan be paid back? The consensus among members of Council is that fees charged to the public have to increase, possibly based on square footage of their property.
“I don’t see any way of increasing revenues,” Kalb said. “The assistant director we spoke of, that would be the person in charge of the stormwater and getting that stormwater fees off the ground. I just don’t know how we’re going to come up with the revenue that’s not there if we don’t take steps to increase the revenue.”
The main suggestion is a stormwater fee.
“The bottom line is, if we don’t do a stormwater fee, then utility users will be responsible for whatever the cost of the loan might be. Again, it gets back to, the people who use the service are going to have to pay the price.”
First Ward Councilman Kevin Johnson asked Duncan to come back to Council in two weeks with figures as to how much rates should be increased to offset the cost of paying back the loan.
Frank Lewis may be reached at 740-353-3101, ext. 252, or at firstname.lastname@example.org. For breaking news, follow Frank on Twitter @FrankLewisPDT.