Water rate limit may halt Pickaway plan
STATE BUDGET /
Columbus plans to back out of a project to extend water and sewer lines to Pickaway County to help attract a company promising thousands of new jobs if Gov. John Kasich does not veto a state budget amendment preventing the city from charging higher rates to suburban customers.
Mayor Andrew J. Ginther wrote Kasich a letter dated June 23 opposing the amendment, noting that a joint economic development district covering Columbus, Pickaway County, the village of Ashville and Madison Township
is a finalist for “a momentous” project by a company promising $5 billion in new investment and 8,800 jobs.
Ginther did not name the company, but Taiwanese electronics company Foxconn said last week that it plans to set up manufacturing in the United States and Ohio is among the states under consideration. Sources told the Dispatch last week that locations near Rickenbacker Airport are among those being considered.
Foxconn, which manufactures smartphones and other devices for Apple, Sony and others, has said it could spend more than $10 billion and generate up to 50,000 jobs. Multiple states could receive projects.
If the amendment stands,
Ginther said, the city will not provide the infrastructure, “which would result in the state of Ohio being eliminated from the site selection process.”
The amendment would “chill regional collaboration between jurisdictions and negatively affect various economic development efforts occurring in Columbus and central Ohio,” Ginther wrote.
“It’s just something they’re doing to try to scare people off,” Rep. Mike Duffey, a Worthington Republican who wrote the water rate amendment, said of the Columbus letter.
The amendment targets local government funding the state provides to Columbus if the city charges different water and sewer rates to those who live inside and outside the city. It also says the state will withhold money from the city
if it requires unincorporated areas to annex into Columbus in exchange for service.
Columbus could lose about $4.4 million — about 20 percent — of its local government funding a year, according to state estimates.
Kasich has until midnight Friday to veto the amendment. A spokeswoman for Kasich said the governor’s office would not discuss a potential veto.
Columbus oversees the water system for the region, and suburban communities buy water from the city. A typical Columbus water customer pays about $459 per year, compared with $597 for those outside the city.
“We’re still very concerned that language is in the budget,” said Columbus City Councilman Michael Stinziano, who oversees the council’s public utilities committee.
City officials said it is more
expensive to provide water and sewer services to suburban customers so they need to charge more to make up the difference.
They also point out that voters have agreed to let Columbus raise property taxes on residents should rates not meet the costs for capital projects funded through bonds. The city cannot levy property taxes on suburban property owners.
The city has yet to add property taxes to meet capital project costs, but taxpayers bear that risk for projects that support economic development throughout the region, said Tracie Davies, the city’s Department of Public Utilities director.
“The ratepayers of Columbus are the only ones financially obligated to pay for those bonds,” she said. “We’re just not going to take that risk any longer.”
Davies said the amendment would almost certainly result in higher water and sewer rates, but the city hasn’t decided what those would be.
Suburban communities with “full service” contracts that shift maintenance, billing and other parts of utility service onto Columbus will become “master meter communities” that have to handle those tasks themselves, she said.
Duffey said Columbus has used state money to build infrastructure and it’s unfair for the city to charge higher rates to those outside the city. Unincorporated areas don’t want to annex into the city, he said, because they fear losing their own police, fire and snow removal agencies and then being neglected by the city.