AUSTINTOWN - McDonald village on Monday jumped into what is shaping up to be water wars over who will provide the utility to a planned new thoroughbred racetrack here.
While Youngstown normally would provide municipal water service to the area of the racetrack under construction in Austintown Township, Niles and now McDonald also have offered to provide their service to the site near the intersection of state Route 46 and Interstate 80.
"I don't want to pirate someone else's water customer, I just thought the village should entertain a conversation as one of the options," McDonald Mayor Glenn Holmes said Monday. He said he had contacted Austintown Township trustees to extend the offer earlier in the day.
Holmes said he reached out only to the trustees and has had no conversations with Penn National about the service.
Ironically, all three municipalities Youngstown, Niles and McDonald get their water from the same source, Meander Water.
If Penn National opts against Youngstown for the service, it is unclear who would provide sanitary sewer service.
Bob Tenenbaum, spokesman for Penn National Gaming Inc., the company building the racetrack and video lottery terminal facility, said Monday the company continues to weigh all its options. He declined to release any further details on what those options would include.
Niles had offered its water service to the racino site in the recent weeks after fears arose that Youngstown could increase additional fees or surcharges on water it provides. The city already tacks on a 40 percent surcharge to Austintown customers that purchase water from the city.
In recent weeks it came to light that Youngstown Mayor Charles Sammarone had approached Austintown trustees about the possibility of creating a Joint Economic Development District to generate additional tax revenue from the racetrack for Youngstown and Austintown. While Sammarone has declined to discuss water service as a factor, he acknowledges that the proposal he made to Austintown was an attempt to increase tax revenue for the city, and help out Austintown along the way by creating new income for both communities.
"As you lose population, you lose your tax base. Your basic services run on tax money. We should be looking at new ways of generating tax dollars," Sammarone said earlier this month.
Under Ohio law, townships like Austintown cannot assess an income tax. However, if a JEDD were created, Youngstown could assess the income tax on the expected 1,000 workers at the property and then share the proceeds with the township.
Estimates have put the income tax revenue at around $500,000 a year. The JEDD also likely would include a "profit tax" on the business which could generate an additional annual revenue of $1.5 million. If shared proportionately, the taxes could provide about $1 million for each community annually.
Austintown trustee chairman Jim Davis said Monday the trustees have considered the proposal, but do not support it because they do not want to impose additional tax on residents who might work at the racino and on the company.
"Austintown is a great community to live in, and we don't ask for something unless we need it," he said. "We can't bleed the well dry. ... If we tax Penn National, it's a deal breaker. We would be taking $1.5 million out of their pockets. How do we do that and entice other business to come to Austintown?"
Davis pointed out that as part of the deal to bring the racetrack facility to Austintown, the township already has been guaranteed $500,000 in revenue each year.
Davis said neither Niles nor McDonald officials have been in direct contact with Penn National yet, and no meeting has been scheduled to discuss water service options.
"The ultimate decision of where this water comes from is not in the hands of the Austintown trustees. Penn National has to want to agree to become a water customer," Davis said.
That's something Penn National is not talking about. Instead, the spokesman said only that they are doing their homework before making any decision.
For now, Tenenbaum said work is continuing on schedule at the racetrack facility, which will be known as "Hollywood at Mahoning Valley Race Course." He said work will be starting on the foundation for the grand stand in the next week or two. The facility is scheduled for a mid-2014 opening.