By Scott Halasz
XENIA — Despite Xenia agreeing to lower its water surcharge, Greene County still plans on walking away from it’s contract with the city when it expires June 2018.
However County Administrator Brandon Huddleson said via email he will ask county commissioners to reconsider “if the city provides a proposal that results in a lower cost than the alternative we have.”
The alternative would be for the county to construct it’s own water lines and tap into the North Beavercreek system to supply its customers with water.
The entities had been talking about the issue since the summer and the county sent a letter to the city and council members Aug. 26 informing them the commissioners will not renew the 20-year contract, signed in 1998. The original deal includes no more than a 50 percent surcharge for supplying water sold to county customers in Shawnee Hills, Cedarville and Wilberforce. It also has an automatic renewal clause if — at least one year before expiration — either side does not inform the other of plans to non-renew.
At a recent council meeting, several council members had some harsh words for the alleged manner in which the negotiations were happening.
In an email to city officials Thursday, Huddleson said, “The city seems to be under the mistaken impression that the County is attempting to harm the city and its residents by reducing the amount paid for water. In fact, the county has been attempting only to negotiate the eventual renewal of an expiring contract. The city performs this same action when faced with the expiration of other service delivery contracts (garbage, uniforms, etc.). Traditionally, this is accomplished via the Request For Proposals (RFP) process. Therefore, I would ask the city to consider this to be an informal RFP. We will evaluate proposals from the city and any other viable option. The proposals will be compared and the successful entity will be the one who provides the “lowest and best” proposal.”
The county is requesting a proposal for 2.5 million gallons of water per day for five, 10 and 20 years.
Huddleson told the Gazette via email that the county is doing “due diligence to ensure we are being responsible with the funds provided by the rate payers. Each and every time any contract expires we look at the cost of renewing the agreement or pursuing other options based on our experience with the service and the cost.” He stressed the service has been reasonable but the cost is too high.
The RFP, informal or otherwise, came as a surprise to city leaders.
“After agreeing last week to contract extension terms that the County Commission had initially and specifically required, the City of Xenia had hoped that the parties were in general agreement, and for the good of everyone involved, could move forward to settle the matter,” City Manager Brent Merriman said. “The City of Xenia was advised late Thursday that the County Commission is again altering negotiations. The County is now pursuing an ‘informal RFP process’ whereby we have been instructed to submit a formal proposal. Xenia has already demonstrated its willingness to compromise toward a continuation of an arrangement that benefits a major portion of the Greene County population for water service. While this shift in tactic mid-stream is unusual, we will continue to be flexible. The city will work to provide an appropriate response to the county. The outcome of the RFP process should be very interesting.”
In announcing the non-renewal of the contract, county officials said they were unhappy with the surcharge and the financial strain it has on the county. According to county documents, the county paid $713,520 to the city for water in 2015 but collected only $633,358. With debt service and personnel costs, the county had a $203,614 deficit.
At a 20 percent surcharge, the county would most likely break even, Huddleson said. With its own system, the county would be in the black.
“We’ve run the numbers, its advantageous for us financially to make a change,” Huddleson previously said. “The county is looking out for the best interests of their customers.”
If the county approves a 20 percent surcharge, the financial impact to the city would be around $100,000 annually, Merriman said. Huddleson said Central State has expressed interest in hooking into the new system, which would provide more income to the county and take away around $100,000 annually from the city, based on the 2015 bill.
Contact Scott Halasz at 937-502-4507.