Hillsboro City Council members debate additional sewer rate increase

Legislation for the second proposed sewer rate increases in three months was introduced to Hillsboro City Council members during their Thursday, Aug. 13 meeting.

The ordinance authorizing an increase to sewer rates for the city of Hillsboro had its first reading, after council members approved a 10-percent rate increase in May. 

At the conclusion of their regular July meeting, council members attended a virtual informational presentation by Waterworth on water and sewer rates. Utilities committee chair Mary Stanforth said her committee met July 23 to further review Waterworth’s study.

“The study showed that it was necessary to increase the sewer rates by 20 percent next year, 15 percent in 2028, 15 percent in 2029, seven percent in 2030 and four percent in 2031 [on both the cubic feet and minimum usage sewer rates],” Stanforth said. “The increase in fees will be approximately $6 to $8 on the average bill of 20 percent. 

“These figures are calculated with no grants being received by the city. The city will apply for grants to help with these costs, but there's no guarantee how much money will be generated through those.” 

As previously reported, council members approved a 10-percent increase to sanitary sewer rates as an emergency measure during their May 14 meeting. That set the minimum rate at $34.18, plus $9.16 per 100 cubic feet above the minimum usage of 133 cubic feet.

If approved, the new legislation will set the minimum rates as follows (but subject to change based on annual review): $41.02 in 2027, $47.17 in 2028, $52.24 in 2029, $55.90 in 2030 and $58.13 in 2031 and thereafter unless amended by council. 

The rate per 100 cubic feet above the minimum usage of 133 cubic feet will be as follows: $10.99 in 2027, $12.64 in 2028, $14.54 in 2029, $15.56 in 2030 and $16.18 in 2031 and thereafter unless amended by council.

As noted by Stanforth at the May 14 meeting, safety and service director Shawn Adkins said that rates have not increased since 2016. After council voted to place a moratorium on water and sewer rates for several months in a row to end the year, council voted in January 2017 to repeal legislation providing for automatic increases in water and sewer rates.

Adkins reiterated the same topics from May at the August meeting. He told council Thursday that “sewer rates must be increased because of the cost of operating, maintenance and repair of Hillsboro’s aging sewer system has continued to rise while rates have remained unchanged since 2016.” The city is seeking funding for the first of what will be multiple phases to address the city’s I&I (inflow and infiltration) issues.   

“Years of deferred rate adjustments, combined with aging infrastructure and ongoing inflow and infiltration, which is I&I, problems have created significant funding gaps that must be addressed to ensure reliable service,” Adkins said. “The city also faces costly system improvements, compliance with environmental regulations and a notice of violation related to sanitary sewer overflows. 

“While the city will aggressively pursue grants to reduce project costs, grant funding is not guaranteed, and a stable revenue source is necessary to secure loans if needed. These rate increases will help protect public health, maintain local control over needed improvements and ensure these sewer systems remain reliable for years to come.”

When council president Tom Eichinger opened the floor for comments, council member Heith Brown said he did not “feel comfortable with having all of the increases laid out through 2031. 

“Especially if we do get grants, I do think this maybe should be more of a year-to-year basis that we revisit,” Brown said. “Speaking with some other council members who have spoken to some other municipalities, there might be some other options to finance as well, other than grants, such as like a surcharge possibility. 

“I think it should go back into either utilities committee or finance committee to revisit some of those other options.”

Adkins responded by speaking about the urgency of the legislation, although it was not introduced as an emergency and is currently set for three readings. 

“We do need to look to move forward with this because we have to show a means of making loan payments back,” Adkins said. “If we get no grants, if we don't have this in place, we're not getting loans. A few months ago, I came back and asked for a 10-percent increase just to borrow $250,000 for a design loan because we couldn't make those loan payments. 

“We've been 10 years without rate increases, which there was already a three-percent increase annually, which would have made up 30 percent. If council before you — not saying you — would have left them alone, we wouldn't have been in this predicament.”

Eichinger also pointed out a paragraph in the legislation that was also brought up by Stanforth in her utilities committee report. Stanforth said that at committee member Logan Kelly’s recommendation, there is a “stipulation that the rates be reviewed yearly” by the utilities committee. Eichinger read from the ordinance that the matter is to be reviewed by July 31 each calendar year with the utilities committee making any necessary recommendations.

“What that says to me is that these rates are where we're going to start, and every year they'll be reviewed, and they may change,” Eichinger said. “You get your yearly adjustment that way. As Mr. Adkins points out, though, if we can't get loans, we can't do the project at all.”

Adkins said he doesn’t “want to kick the can down the road any further.

“We are going to look at these rates yearly,” Adkins said. “I need something in place to show them that we have the means to pay these loans back if we do not get any grants. The EPA is actually coming down harder on municipalities. Therefore, our grants aren't going as far as they used to because there's more municipalities applying for these grants, so they're not giving 100-percent grants anymore, hardly. 

“I do not look for a 100-percent grant on $4 million on our first phase. I'm going to be happy if we get a 50-percent grant, and we have to take a 50-percent loan. I think we would be very lucky if we get that.”

Adkins said he also wanted to state for the record that he had “a couple council members ask me why the administration didn't bring this forward to council before now.

“Guys, we did,” Adkins said. “It was in a committee for two or three years.

“I have no control over if you guys have a meeting or not to move this stuff forward.”

Council member Gary Lewis asked if Adkins had any “loan amounts or loan repayment amounts” for the project.

“This is going to take 10 years,” Adkins said. “DLZ is giving us a cost estimate of about $4 million a phase. That’s what we’re basing those numbers on.

“Our maintenance and repair, guys, is going up every year, so that is another expense that we're adding on to this. It isn't just taking care of the infrastructure improvements, but it's also to maintain.”

Adkins added that problems and expenses are “only increasing the longer we push this off.” Auditor Dawson Barreras also pointed out that the city is limited on additional commercial or residential developments “because our sewer plant cannot handle the amount of any extra amount of sewer coming into our system.” 

Kelly expressed concerns about the project being delayed if the city doesn’t receive any grants.

“This first round, if we get no grants, you guys want me go after a $4 million low-interest loan?” Adkins asked.

“No, I don't want to do that,” Kelly said, but added he has concerns the city is “going to push it [back] another year” each time they lose a grant opportunity.

“We have to do this project no matter what,” Adkins said.

“I 100-percent agree with that,” Kelly said.

“A lot of times you do get turned down on your first  application of grants, and also — I told you this afternoon — some grants don't fall in line with other grants,” Adkins said. “I’m going to go after a low-interest loan. When I say low interest loan, I think OWDA [Ohio Water Development Authority] right now is a little over four percent. It used to be one percent or a quarter percent. It's increasing every year. 

“I want to make it clear: this is not taxpayers' money. This is a user fee. This has to be self-supporting. Period. It is a business.”

Kelly also asked for “clarification” on whether the city could borrow “a couple hundred thousand” dollars from the general fund, although Adkins asked how they could “come up with this money to pay it back.”

“You can borrow from the general fund, but the general fund is limited as well,” Lewis said. “It is within the perusal of council to be able to say whether or not you pay that back. 

“It's not ideal. It definitely isn't, because then you get into that thing where this is an enterprise fund we're talking about, and like you said, it's not taxpayer money. It's user fee money, and then you start crossing that line into that. It's probably best that you don't do that.”

Adkins concluded that he is “OK with more discussion” but that the legislation would have to take effect by Jan. 1, 2027 in order to “move forward with these projects.

“We need to look at it yearly,” Adkins said. “If we get a $4 million grant to pay for all this, OK, the 20 percent is only helping us on our next part of it. We don't have to do a 15- percent increase. 

“I just have to show the means to pay these loans back. I have to have this in place, guys. We can always decrease the increases next year if we do get most of this paid for.”

Eichinger told Stanforth he “would leave it up to the committee to decide” if the utilities committee wanted to revisit the legislation before its second reading.

In other legislation related to the proposed sewer upgrades, council voted 6-0 to suspend the three-reading rule and to approve and adopt a resolution authorizing the mayor and DLZ Ohio, Inc. to prepare and submit an application to participate in the Ohio Public Works Commission State Capital Improvement and/or Local Transportation Improvement Program(s) and to execute contracts as required.

The legislation is for an application to the Ohio Public Works Commission for funding for sanitary sewer improvements. 

In unrelated action, council also unanimously approved an ordinance amending the compensation for elected officials of the City of Hillsboro, effective with the terms commencing 2028 and 2030, on its third reading.

The legislation makes an adjustment to the mayor’s compensation, which finance committee chair Lewis said in June “had not been adjusted since the 1990s when Dick Zink was mayor.” 

Starting in 2028 for the mayor, auditor, law director and members of council starting new terms, and in 2030 for the council president and council members starting new terms, salaries will be “calculated based upon ‘minimum base plus’ basis, which is calculated based upon OPERS annual cost of living estimates.” The rate is annual base amount times six for the mayor; times seven for the auditor; times five for the law director; times one for council members; and times two for the council president.

Council heard the second reading of a resolution adopting a social media policy for the City of Hillsboro, with adjustments as recommended by the civil service and employee relations committee. 

The chair, Brown, said his committee met Aug. 5 with city administrators to review the legislation, after several council members had issues with the language at the resolution’s introduction in July. According to Brown, the committee recommended “redactions of the employee portions, personal use, personal social media account, employees and city officials guidelines.

“Some discussion was held around concerns of the policy not showing clear and concise directives for violations of the policy, specifically regarding employees and elected officials,” Brown said. “It was discussed to remove the employee and elected officials portions from the submitted social media policy last month. 

“[City law director] Ms. [Hannah] Bivens also discussed the need for public officials to have some guidance for social media policy to avoid potential Sunshine Law violations, posing the risk of multiple council members commenting on the same post could create a quorum.”

Brown said the committee recommended “further legislation be presented to council for an employee social media policy to be added to the employee handbook, and that a separate piece of legislation be presented to council for public officials to be added to Chapter 30 for our city ordinances.”

An ordinance to repeal the residential fee schedule and commercial fee schedule also had its second reading.

Inn other discussion:

• In his report, Adkins gave an update on the long-discussed Marriott Hotel project, as he said developers with Leo Capital have “resubmitted plans to the Planning Commission.

“Marriott is actually going after more money to put another story on that is 22 more rooms,  for a total of 99 rooms,” Adkins said. “This should happen by the end of August. They are wanting to submit plans in September and hopefully breaking ground by the end of October.”

Stanforth asked for the “rationale that they thought they needed more hotel rooms.”

Adkins and council clerk Megan Blackburn said that it was a decision by Marriott based on “long-term” versus “short-term” stays. In response to another question from Stanforth, Adkins clarified that Leo Capital is not seeking any additional money from the city.

“This is strictly through Marriott and a different — I actually think it's something to do with the state, nothing to do with the city,” Adkins said. “Our bond sold, so our $200,000 — our promissory note — guys, that's their money. That is their money because the stipulation was it's their money if and when the bonds sold. 

“The bonds sold. We have given them $200,000. It's their money.”

In other matters, Adkins said that “a lot of work” has been accomplished at the multimillion-dollar-grant-funded Crossroads Park site.

“On the amphitheater, they’ve started laying block,” Adkins said. They poured all the walls on the event center, and they actually poured part of the slab on the event center today.”

For other city projects, Adkins said work is underway on the Rails to Trails project and the new West Main parking lot. He added that the America 250 event in Hillsboro, for which city officials assisted in planning and organizing, “had a tremendous turnout.”

Adkins also reported that the city issued 17 building permits, including 12 residential and five commercial, in July, plus had one complaint referral. The Planning Commission approved a site plan. 

• During citizens’ comments, council members heard from two residents on unrelated issues in their respective neighborhoods. The first, Francine Frank, said that she had spoken with city officials regarding an issue with a neighbor “parking big construction trucks in front of my house.” 

She expressed her frustration with that situation as well as with the city officials she had met with, whom she called “very condescending” and spoke “very loudly.” (Adkins, who said he had spoken with Frank at the city building as well as at the meeting, said he spoke loudly because Frank had trouble hearing him, and she accepted his apology.)

Adkins explained that the parking area in question is “a vacated alley” and that the two neighboring property owners are to split the area 50/50. He also said that he asked the neighbor to move a truck that exceeded the weight limit for the street. 

“This is a civil issue between you and your neighbor, not the city,” Adkins said. “There is a lot we can enforce, but there's a lot we can’t enforce. A lot of this is a civil issue.”

The other resident in attendance, Joanne Whitley, said that she has lived on Greystone Drive for 52 years and “never remembers it being blacktopped.

“I think the street depreciates the value of our property,” Whitley said. “Quite frankly, if I was going to buy a nice house, I sure wouldn't want the street to look like our street looks.”

Whitley said she has heard “all sorts of excuses” over the years, including about water and sewer, as to why the road has not been paved.

Adkins asked for the matter to be placed in committee to consider how to proceed with Greystone Drive, as he said the city has applied for a grant four times for a water replacement project and has been “turned down” each time.

“I just need to know if council wants to take a low-interest loan to replace the water line,” Adkins said. “We have 67 patches on Greystone Drive from water main breaks.

“Our phase-two sewer rehab is part of two years from now, so if our council wants me to go after it, I will have to budget for it to go after a low-interest loan to replace the water main. We know we're going to tear the street up in a couple years for this sewer rehab.”

Adkins told Whitley that he doesn’t “want to repave your street, and we come in next year, replace a water main, the following year come in and replace a sewer main, and then we're going to have to replace the old paving.”

Eichinger placed the matter of applying for a loan for a water main project on Greystone Drive, as well as Westover Drive, into the utilities committee (and potentially the finance committee) for further review by council.

“I just don't want to waste money and repay this road if we don't replace our infrastructure,” Adkins said. “Hopefully, in three years, we'll be on Greystone putting in a sewer. Do you guys want to pave Greystone Drive and in three years we totally tear this street up? 

“Our sewer is right down the center of this road, so we have to tear the center of it, and then we've got all of our laterals to put in at every house. That's clear across the street.”

• Under communications, it was noted that the city received a letter from the Ohio Department of Commerce for a new liquor license request from Ogawa Hibachi Grill. Council members voted no objections to the request.

• At the start of the meeting, council voted 6-0 to excuse the absence of council member Cody Mathews. Mayor Justin Harsha was also absent.