Sewer district penalty on bills could be cut

Published 11:06 am Friday, September 19, 2014

If the figures hold, customers of the Union-Rome Sewer District will at least get a cut in the penalty charged on their delinquent bills, if not a reduction in the bill itself.

“We need to look at the penalty part,” Bill Pratt, Lawrence County Commissioner, said at the commission’s Thursday meeting. “It is unfair. We need to change the structure of that penalty.”

Right now the district charges a monthly fee of $52.48. If a customer doesn’t pay that, a 15 percent monthly penalty is also levied.

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“A $600 bill can end up costing $2,000,” Pratt said. “Once they get to where they can’t catch up, they give up.”

Then the bill goes onto the customer’s property tax, which could end up with that property going into foreclosure.

At the meeting the commission accepted the Union Rome Sewer Delinquency Assessment list where out of approximately 5,000 customers 474 were in arrears. Total arrearage is $506,728.

In March the commissioners hired South Point CPA Robert Payne to review the financials of the district to determine if the monthly rate could be reduced. That report was received by commission president Les Boggs on Sept. 12 and will be discussed by the entire commission at upcoming meetings.

The penalty was placed between 1997 and 2000, according to county auditor Jason Stephens, who went on the commission in 2000.

“The penalty is dedicated,” Stephens said. “When those are paid on the taxes, that money is set aside from regular operating expenses to that capital improvement of the district.”

That decision was made after 2000.

The regular monthly fee of the district goes to operating expenses. At the end of 2013, the district had taken in $3,075,945 and had expenses of $2,842,002, leaving $233,943 to add to an already accumulated carryover of $1,119,546. That enabled the district to start 2014 with a carryover of $1,353,489. The district also has more than $20 million in debt from building a new plant plus other capital improvements.

The Ohio Water Development Authority lent the county approximately $25 million to build the new sewer plant in 2008. Original terms were at an interest rate of 3.25 percent over a 10-year period. At the time the county was paying off the non-callable bonds that had been issued to pay for the former system at 9.78 percent interest rate. Those bonds did not mature until 2012.

Boggs said when the county defaulted on the first payment on the new plant, the OWDA determined the new rates and what all subsequent increases would be. Stephens said a renegotiation of the rates did not preclude the county from setting the district’s rates.

After the commission meeting Boggs said OWDA’s control over the rate structure has ceased and the commission can change the rates, if financially feasible.

Both Boggs and commissioner Freddie Hayes Jr. agreed they support reducing the penalty.

“We will definitely change that,” Boggs said. “It is going to happen.”

“I think it is not fair to the people and way too high,” Hayes said.

In other action the commission:

• Signed the CEBCO renewal of county employee health insurance benefits;

• Promoted county EMS paramedic John Higgins from part-time to full-time.