By Scott Halasz
XENIA — In an attempt to keep one of its largest customers, the City of Xenia is prepared to match Greene County’s cost for constructing and maintaining its own water system as long as the overall unit price doesn’t dip below Xenia’s current residential rate.
City council authorized the offer during its council meeting last week with the hopes of extending its two-decades long relationship with the county.
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. The county is preparing to construct its own water line and connecting it to the North Beavercreek water system and supplying the aforementioned areas at a cost of $5.5 million.
Council had previously authorized City Manager Brent Merriman to negotiate a new contract with a 20 percent surcharge. The county replied with an email explaining its position and asking for the city’s last and best offer by Sept. 28.
The arrangement approved last week is for a rate equivilant to whatever the county’s cost would be for construction and operationg of a new system.
“What would be the cost for laying the pipe … the cost to actually produce the water,” Merriman said. “All of those variable expenses that they’re evaluating right now will come up with an annual expense. We’ll match it as long as it doesn’t go below our residential rate. Clearly we’re making a good-faith effort to put out there a very fair offer.”
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 previously 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 has said. “The county is looking out for the best interests of their customers.”
Merriman agrees the county needs to do what’s best for its customers.
“We still think that buying the water through Xenia is short and long term more cost effective,” he said. “If they come back with a rate (that is) cheaper than our residential rate, they should go ahead and do that.”
At a 20 percent surcharge, the financial impact to the city would be around $100,000 annually, Merriman said. But until the final county rate is known, the actual impact to the city under the latest offer can’t be computed.
Contact Scott Halasz at 937-502-4507.