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NILES -- City officials said a water rate increase would impact communities across the Mahoning Valley and a one-hour conversation wasn't enough time to reach a conclusion.
City council members ahead of Wednesday's regular meeting heard from Mahoning Valley Sanitary District representatives, who are proposing a purchasing bulk rate of $0.37 per 1,000 gallons used.
The rate would be the wholesale cost to the city, not the final rate directly billed on an individual resident's utility bill.
Brenda Duffett, MVSD's finance manager and board secretary, said none of them want to increase the water rates because they understand any increase affects the customers and communities the district serves.
"The reality is that the cost of providing safe and reliable water service continues to rise," Duffett said.
Duffett said electricity, sludge, chemicals and labor, among other things, have increased in cost, and the district has a responsibility to maintain the Meander Dam in compliance with the Ohio Department of Natural Resource's regulations to ensure the infrastructure's long-term safety and reliability.
"For these reasons, we believe this rate increase is necessary to address our current operating cost while also preparing for the significant costs we know are here and ahead of us," Duffett said. "An average family uses 5,000 gallons of water per month; at the proposed increase of 1,000 gallons, that equates to approximately $1.85 per month -- or about $22 a year for the average household."
Duffett reiterated that they weren't taking the increase lightly, but it would help the district meet its obligations, maintain their water system and contribute toward a critical infrastructure project that has been years in the making.
Duffett was referring to the Meander Dam project, which is estimated to cost an approximate $87 million.
"Before asking the customers for additional revenue, the district has committed $21 million of its available resources towards this project," Duffett said. "That is a significant commitment by the district and demonstrates that we have been planning ahead and taking steps to meet this obligation responsibly."
Duffett said the district has spent several years working to secure a $38 million Federal Emergency Management Agency Building Resilient Infrastructure and Communities grant, which was put at risk after the federal government put the program on hold.
"It wasn't until July that the district was granted an extension, allowing us additional time to complete the necessary work and preserve that $38 million grant," Duffett said.
Duffett said the district's intent is to move forward and secure the remaining money for the project, adding that the timing of their rate increase request is important because they're in a position to keep the grant funding, move forward with the project and secure the financing necessary to make it possible.
Duffett said the $21 million on hand was made possible by interest earned from high rates, proceeds from timber sales, grants for other infrastructure projects and the district's efforts to be "good stewards" of public funds.
Duffett said a rate increase was not the first solution, adding that they've looked at controllable expenses and available funding opportunities.
"Financial realities we face require us to secure an Ohio Water Department Authority loan to complete this 100-year-old dam project," Duffett said.
Niles Council President Doug Sollitto recalled a time where a rate increase was coming in 2022 and a judge made a "big issue" about it, asking where things stand with legality and adding that they didn't want to go through it again. The judge ultimately ruled the increases were illegal.
MVSD Chief Engineer Scott Verner said he wasn't with the district when discussions happened, adding that it's been brought up, but things are different this time around.
"We do have the BRIC grant secured; in April of 25, we were notified that the government pulled the BRIC grant -- we kind of had it, and we continued with the project planning and so forth," Verner said. "What's different this time is we are going through a noncompetitive bid process; we have competitively bid the project unsuccessfully twice now, where the bids exceeded the engineer's estimate by 100%."
Verner said it wasn't feasible to even move forward, noting the original estimate was $55 million, but the two separate bids from the same contractor came in at more than $100 million.
Verner said the Ohio EMA, the grant's recipient, is who the district reports to, and they are allowed to enter the noncompetitive bid process because they were unsuccessful competitively.
Verner said the district has a contractor, which the board selected in 2026, and started the planning process in April.
Verner said they requested an extension of their BRIC grant and are continuing with the planning process, adding that they were awarded $14 million for the project's first phase, reiterating that they have their share and the BRIC grant in hand.
The extension will run until December 2029, according to Verner in August.
"The missing part of this puzzle was our OWDA loan needed to fund that fund again; what we intend to do, upon approval of this rate increase, we will make (an) application with the OWDA for a $29 million loan," Verner said. "Once that is approved, we will award phase two of the project, so this project is ready -- it's shovel ready, it's ready to go -- the permits are in place, we have a contractor."
Verner said losing the dam would set the area "way back" and they'd need to look for another source of water.
Of the "Exhibit A" sheet, "The District's Amendment No. 7 Revised to the Original Plan," the dam's improvement project is the only one being considered, Verner said, with the other projects being listed as a general plan moving forward.
Of the $16 million matching funds for the BRIC grant, the other $5 million is funds that they will have, Duffett said.
Councilman Aaron Johnstone, D-2nd Ward, asked how much money the district expected to make in year one of the rate increase, noting that council is in the middle of a rate study of its own and everything has gone up, leading to them having similar discussions at their water treatment facility.
Johnstone asked if there are any plans to readjust the water rates lower, once capital improvements are completed, with Verner saying that would be correct.
"Unless there was, for some reason, we saw a significant decrease, that's an option I believe we have the way the courts are set up, if we go back, we're annually supposed to audit," Verner said. "If we see a significant decrease where we can lower rates, then we have that obligation to do so; but do we speculate and say they're going to? I don't have that crystal ball."
Johnstone said he'd like to have a discussion with everyone in the room as to what would happen once the capital improvement projects are paid, adding that he didn't think residents would oppose fixing the dam, as Councilman James Sheely, D-3rd Ward, pointed out earlier.
Verner said the district would still be seeking a rate increase if the project didn't exist, adding that there hasn't been a rate adjustment in 12 years.
"Our rate is made up of fixed cost and variable cost -- fixed cost being personnel, maintenance equipment, and so forth; variables are electric, chemical, and sludge," Verner said, adding that debt services were part of the fixed costs. "Between 2015 and 2020, we had some bonds come off, which was significant, which actually lowered our operating cost."
Verner said they've seen cost increases in personnel and chemicals, adding that electricity has gone up "considerably" and chemical costs have gone up 269%.
City Auditor Giovanne Merlo questioned the additional revenues the district receives on the city's water, noting that the district's model shows six million gallons a day, but they're actually buying nine million.
Johnstone said all of the city's rate study was just a magic 8-ball that they were shaking to see how close they can get to being accurate, adding he knew he was simplifying it, but they needed to be closer on the numbers so they don't pass the burden to the residents.
"Currently, we're sitting at $5.25 to our residents on the inside; any increase that is passed onto us, obviously we can't consume that, because we have stuff we need to take care of, internal infrastructure," Merlo said. "To say it's $1.85, it's really almost $5 because 18%, 17.38% on $5.21 is 91 cents. On 5,000 gallons, that's $4.82, I believe, to our residents."
Mayor Steven Mientkiewicz said the cost compounds, not just to Niles, but Trumbull County, noting its own increase, Girard and the Southeast Water District, as well as Youngstown.
Johnstone said it was hard for him to say yes to a rate increase through an hour-long conversation.
The revenue adjustment is needed in order to obtain a OWDA loan, and Verner said there is a two-week continuance in the process before district officials have to go back before a judge.