Study on sewer rates expected next month

Published 11:19 am Thursday, July 24, 2014

CHESAPEAKE — In the next month customers of the Union-Rome Sewer District may find out if they will have their rates cut.

Making that cut is the goal of the Lawrence County Commissioners who in March hired South Point CPA Robert Payne to look into the financials of the sewer district.

At the time Payne came on board, Commission President Les Boggs called the on- average $50 a month rate ridiculous and sought a study from Payne to provide information to take to the Ohio Water Development Authority.

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“We asked for a study from an independent accountant to take all things in consideration — maintenance, future projects as well as monthly billing,” Boggs said. “He is to come back to us and make a recommendation whether we can have a reduction or whether it needs to stay the same.”

When the county built the new sewer plant in 2008, it received a loan from the OWDA for approximately $25 million. The interest rate was 3.25 percent over a 10-year period. At the time the county was still paying off the non-callable bonds issued to finance the older system at 9.78 percent interest rate. Those bonds did not mature until 2012.

According to Boggs, when the county defaulted on the first payment on the new plant, the OWDA determined the new rates then and all subsequent increases. However, according to County Auditor Jason Stephens, who was on commission at that time, when the county defaulted, it re-negotiated the rates at 1 percent over 30 years. That renegotiation included the new rates.

Boggs says the OWDA is in charge of the rates while Stephens says they are under the jurisdiction of the commission.

“Hopefully it comes back that we can reduce the rates because I think the charges are entirely too high,” Commissioner Freddie Hayes.

Boggs wants to have Payne’s study by late August.

“(Payne) handled the receivership of the hospital when it went under,” the commission president said. “He is a good guy and will give us an independent study.”