By Scott Halasz
XENIA — The City of Xenia will explore a five-year water contract extension with Greene County, but the county is still planning on building its own system to serve its customers in Shawnee Hills, Cedarville and Wilberforce.
City council Thursday gave city manager Brent Merriman the OK to pursue an extension with the county, a deal that could finally bring some closure to the ongoing saga.
The city has been selling the county water for those aforementioned areas since 1998, when the two signed a 20-year agreement. The deal gives the city the right to include up to a 50 percent surcharge for supplying water sold to county customers, which county officials have questioned, saying it cases a financial strain.
In late August the county commissioners informed city leaders that they will not renew the contract when it expires in 2018 and will instead construct their own system and tap into the North Beavercreek system. That set off a series of negotiation attempts, which culminated in the city offering to match whatever cost the county came up with, providing it didn’t dip below the city’s current residential rate.
Earlier this week County Administrator Brandon Huddleson said the county would see substantial savings with its own system and confirmed “we are planning to proceed in that direction.”
However, a five-year extension, which would begin Jan. 1, 2017, would give the county more time to construct the system and would give the city more time to prepare for the revenue loss, which could be as much as $700,000 annually. The extension would have no surcharge attached to it.
“I am pleased the city is willing to consider a five-year extension,” Huddleson said. “It would allow them to gradually prepare for the loss of revenue while providing some savings to the county. If an agreement can be crafted before we begin construction, the commissioners will certainly entertain it.”
If it comes to fruition, the city would lose around one-third of the current annual revenue, Merriman said.
“We have already begun looking at changes in our capital program to move back some larger-cost projects in our Capital Improvement Plan,” he said. “Otherwise, rate increase would be in store. We’ll bring back some recommendations to council on that later in the year. Keep in mind, some degree of increase was likely even without the county contract conversation. We will do our best to minimize any rate increases.”
The decision didn’t come easily for council, which was split as to whether to entertain an extension or not. Councilmembers Edgar Wallace, Jeanne Mills and Mike Engle originally voted to reject a contract extension, while Dale Louderback, Sarah Mays and Marsha Bayless were in favor of pursuing a new contract. Councilmember Wes Smith was absent. Another vote was later taken, with Engle, Mays, Louderback and Bayless voting to allow Merriman to pursue the extension.
The county water system would cost around $5.5 million, Huddleson said. It would be financed over 20 years and Huddleson said no Xenia tax money would be used.
“Two councilpersons mentioned tax dollars being spent on the water extension,” he said. “That is completely untrue. The improvements will be paid for from water funds for the benefit of the water system. City of Xenia residents will not contribute any money to the improvements to our water system.”
Contact Scott Halasz at 937-502-4507.