St. C. debates water privatization bid

T-L Photo/ROBERT A. DEFRANK St. Clairsville Safety and Service Director Jim Zucal, left, Mayor Terry Pugh and engineer Jeff Vaugn discuss a bid from Aqua Ohio, the private entity interested in purchasing the city’s water and wastewater system. The three are members of a committee to evaluate bids and advise the city council. They had their second meeting Thursday.

ST. CLAIRSVILLE — The city continues to talk about about the future of water and wastewater.

The city had formed a committee of local experts to evaluate bids and advise the council on the option of privatization. The full committee held its second meeting Thursday, having had time to review the single bid received from Aqua Ohio, the private entity that has expressed an interesting purchasing the city’s aging water and wastewater system.

The two engineers on the committee — Jeff Vaugn and A.J. Smith — began by giving their analysis of the city’s current system. Vaugn is a St. Clairsville business owner and a lead engineer for the county. Smith is a civil engineer with Hull and Associates.

“The town has small, old waterlines that are in poor condition and haven’t been routinely replaced,” Vaugn said. “There has been no effort to do that. … Quite frankly the water plant should be retired in its complete form because it’s past its actual service live and … asset value.”

Bill Brooks, a committee member who has voiced opposition to privatization, and a candidate for mayor during the next Nov. 4 general election, asked if the city had the cost of rebuilding and renovating the water system.

“When they do the repairs that they have to do, they’re going to raise the rates,” he said. Then they’re going to raise them again. Then they’re going raise them again. For the rest of our lives and the rest of this panel’s grandkids’ lives, they’re going to be 100-percent under (Aqua Ohio’s) control.”

Mayor Terry Pugh, also a committee member, pointed out that rates will raise regardless. Brooks argued that the city will retain control. Pugh said the city had to address the issue.

“This can’t been kicked down the road so long that you can’t kick it anymore. We have to do something about it,” Pugh said, adding that potential grant funding was tied to the rates the city charges.

Kathryn Thalman of St. Clairsville, a committee member with a background of chemistry and biology, asked if the city would be selling the actual reservoirs.

Pugh said the contract would be subject to negotiations, but the bid suggests that the city will retain control over the land and oil and gas rights. He said he is talking with Finance Director Cindi Henry about whether it would be better for the city not to sell the property where the buildings were located and lease the property to Aqua Ohio. He expressed doubt about whether Aqua Ohio would make the repairs without raising the rates against the city’s will. Pugh said the company would be subject to Environmental Protection Agency regulations.

“The big question is about taxes. Right now, the city is exempt from taxes on that. If we turn around and lease it, is that exemption lifted and we have to pay taxes?”

City Council President Tim Porter, also a committee member, said he believed there was no one else in the area able and qualified to bid. He voiced the concern that Aqua Ohio might partner with Belmont County to use the county water.

“If that happens, we’ve got to be really vigilant, really careful how we set this up with our properties,” he said. “If they go with the county water, they don’t need any of that anymore. We don’t want them ending up with that property.”

Porter said he was highly concerned with how vaguely the bid was worded, primarily regarding the land, buildings and structures.

St. Clairsville Safety and Service Director Jim Zucal, also a committee member, reviewed more details of the state of the water system, saying that 27 percent of the waterlines, or 10 miles in the city, were corroded, with many only two inches or less due to accretion. He said 52 percent of the lines are six inches, and only about 18 to 20 percent were wider.

“The average age of water pipes in this city is 60 to 70 years old,” he said, adding that while the city also has a contract to buy water from Belmont County, the amount is limited to up to 325,000 per day. “We use 600,000 gallons plus every day.”

He added that the city has seen an increase in chemical use and cost of testing and laboratory work has increase by 30 percent in the last four years.

Zucal said that the formula set by the EPA for eligibility of grants and loans is based on rates of 1.8 to 2.5 of the median household income, which in St. Clairsville is $68,000. He said going by two percent, the minimum combined water and sewer bill must be at least $136, while the city’s current minimum water and sewer bill is $42.

Zucal noted that the proposal specifies that the rates will be controlled through 2026.

“In 2026 … is when it looks like it’s going to take a pretty good jump. Until then it doesn’t look that bad,” Porter said. “No matter what we do, our rates are going to increase. This looks like it’s probably going to be a slower rate increase, doing it this way, versus trying to fix it ourselves.”

Afterward, Pugh pointed out that according to the bid the rate increase from 2020 to 2026 would be a total $4.13, with increments of $1, $1.67, 71 cents and 75 cents.

After 2026 there would be an increase of up to 9.9 percent, with increases of $3.75 for 2027, 2028, and 2029.

He said the sewer rates would remain largely the same. He pointed out major improvements to the sewage treatment system in the past few years.

“In 2029, it’s a total increase of $3.36 (for sewer rates),” Pugh said.

Henry, who was also present to provide financial information, reminded the committee that the water and wastewater system’s debt was about $3.5 million.

Several residents attended. Mark and Rebecca Poindexter of St. Clairsville, said they trusted the committee members and were confident in the city leaders. Rebecca Poindexter said clean water was a necessity.

The committee will meet next at 11 a.m. Wednesday.