File Photo/ROBERT A. DEFRANK Kimberly Bojko, the attorney who negotiated with Aqua Ohio on behalf of the city of St. Clairsville, answers questions from council members while Mayor Terry Pugh observes. Council will have a third reading and possible vote on the contract Monday.

ST. CLAIRSVILLE — A proposed contract with Aqua Ohio, the private, state-regulated entity that has offered to purchase St. Clairsville’s water and wastewater systems, comes before City Council for a third and final reading Monday evening, when members are expected to vote on whether to enter the sale agreement.

If the contract is passed, the monthly rate increase for water from 2020 to 2026 would be a total of $4.13 per 1,000 gallons, implemented at annual increments of $1; $1. 67 cents; 71 cents; and 75 cents. After 2026 there would be an increase of up to 9.9 percent, with increases of 3.75 percent for 2027, 2028 and 2029. Safety and Service Director Jim Zucal said these amounts would be determined by negotiations between Aqua Ohio and council, and the contract would follow the Public Utilities Commission of Ohio’s statewide average.

Monthly sewer rates for the first three years of the contract would increase by a total of $3.36. There would be no rate increases for the last three years of the proposed contract.

“Council has a say in all this in 2026,” Zucal said.

The purchase prices are listed at $3,875,000 for the water treatment plants and distribution system and at $6,750,000 for the wastewater system. The city’s estimated debt for water and wastewater is about $3.5 million.

Mayor Terry Pugh said $500,000 of any sale proceeds would be put toward a project to alleviate flooding on Bellview Street. The money would be added to a $800,000 loan from Ohio Public Works Commission funds for the $1.5 million project.

Kimberly Bojko of Carpenter Lipps & Leland LLP, the attorney who negotiated with Aqua Ohio on behalf of the city, answered questions during about the proposed sale during an Oct. 21 council meeting.

Several of those questions came from Councilwoman Beth Oprisch.

“Aqua is regulated by the Public Utilities Commission and anything that Aqua does, with some few exceptions, will be regulated by the PUC,” Bojko said, adding that rates not set by ordinance and service quality issues will be so regulated. Currently, the PUCO has no involvement in municipal utilities and rate-making in St. Clairsville. “Those are some of the jurisdictional changes that will occur if the municipal utility is sold to Aqua.”

In answer to questions from Councilwoman Linda Jordan, Bojko said the city would be under no liability for any incident related to the water system once the sale closed. The closing would be subject to PUCO approval.

Bojko said she has become familiar with Aqua Ohio’s practices. Jordan asked if the company was in the habit of seeking exorbitant rates. Bojko said except for rates that are set by ordinance, all of Aqua Ohio’s rates must be approved by the PUCO.

“(PUCO’s) mission is to charge just and reasonable rates,” she said. “The commission would not be allowed to set and would not set exorbitant, unjust or unreasonable rates.”

Councilman Mike Smith inquired about the buy-back provision in the contract. Bojko said the city has the option to re-purchase the facilities for 15 years after the date of closing and must provide two years’ notice. She said the city could buy back the system at the cost paid for it. In response to a question from Oprisch, she said there could be a fee for value added.

Bojko could not say when Aqua Ohio would take over or when the billing cycle would start. This would depend on when the PUCO completes the transfer process.

Smith also asked how the city could be certain how much Aqua Ohio was spending and what improvements the company was making to the system.

“There are provisions in the contract that the city is going to be involved in the planning of those capital improvements and oversight of those capital improvements,” she said, adding that their request for quotation has made the list of improvements public.

Oprisch asked if Aqua Ohio could sell the water and wastewater systems to someone else. Bojko said the PUCO would have to approve and that Aqua Ohio would have to complete an abandonment process first. She said should Aqua Ohio sell the system in less than five years, the agreed-upon rates likely would be assumed and honored by the buyer.

Bojko said Aqua Ohio could spread upgrade costs among all of their customers, so the rates could be kept low. She said those decisions would be made after the five-year period.

“How long does it take to close this and when does Aqua actually start doing the work?” Councilman Perry Basile asked. He said the Ohio Environmental Protection Agency is calling for immediate upgrades and he is concerned how many of those would be borne by the city.

Bojko speculated that if the city sells, the OEPA could conceivably wait and deal with Aqua Ohio.

“I just can’t be certain,” she said. “I think that Aqua has an interest in taking care of the plant, because anything that is delayed is only going to make the problem worse in a couple of months.”

In answer to another question, Pugh said drainage and storm water issues are not a part of the contract.

Councilman Jim Velas asked further questions about what future rates might be and about Aqua Ohio’s options to keep rates reasonable.

“I don’t have a crystal ball,” Bojko said. “I don’t know what the rates are going to hold. I don’t know what your system’s going to do. … There’s other components to the PUCO’s rates so I’m not going to sit here and say it’s that simple. … (The PUCO) doesn’t want to see customers’ bills go up extraordinarily.”

In answer to Councilman Mark Bukmir, Bojko said Aqua Ohio would retain the city employees and their benefits. She also said Aqua Ohio would be able to sell water to the fracking industry, but the company must provide adequate water service to the city.

“They can’t do whatever they want and not provide adequate service,” she said.

In a meeting with The Times Leader, Zucal said the city does not have the capacity to sell water for fracking.

Councilman Frank Sabatino asked about issues related to fire service. Bojko said the there would be no fee for hydrant and water use during an emergency.