A reduced surcharge and increased water rates could also impact the city’s ability to attract new businesses, Merriman noted.
The majority of council said they did not want to risk losing the water revenue from the county.
“I’m not willing to play Russian roulette with the county,” Councilman Dale Louderback said. “I say we take the 20-percent surcharge and run because you did mention it would cost the city $800,000 to $1 million a year in 2018 if the county does its own water. We don’t have that kind of money. We’re on a shoestring budget.”
UPDATE @ 8:23 p.m. (Sept. 8): Xenia City Council has approved a motion for the city manager to negotiate a 20-year contract for water services with Greene County that includes a 20 percent water surcharge.
EARLIER REPORT (Sept. 8)
Months of negotiations between the City of Xenia and Greene County over a water surcharge has ended with county deciding to part ways and build its own system to service customers in Wilberforce, Shawnee Hills and the Village of Cedarville, according to county officials.
The county says the deal breaker was the 50 percent water surcharge it has been paying to the Xenia which has resulted in the loss of hundreds of thousands of dollars annually.
The county water contract with the city will end in 2018.
“You have failed to provide any reason for the surcharge, at any level, other than the city’s dependence on it as a rate subsidy for the the rest of the customer baser,” wrote Greeene County Administrator Brandon Huddleson in an email to Xenia City Manager Brent Merriman dated Sept. 8.
“The city does not own, repair or service the lines, valves, meters, towers, pumps, etc. in the system. The cost to provide water to the county is arguably less than the balance of your customers for this reason.
“The number is arbitrary and by your own words, provides a “profit margin” for the city. We cannot and will not continue to pay a premium for water at the expense of our customers simply so the city can profit.”
In 2015, Greene County paid Xenia $713,520 for water services, however the county collected $633,358 from these customers. The amount paid to Xenia coupled with an average of $87,530 in debt service and $35,922 in personnel costs left the county with a $203,614 deficit, according to county documents.
The county entered into agreement with Xenia to provide water for Wilberforce, the Village of Cedarville and Shawnee Hills, in 1998.
“We are now a couple of miles away from where this Xenia connection is with our own water,” Huddleson said. “So now it’s economically viable for us to run a line and connect to our own. We have plenty of capacity. We can handle it. We can service those customers on our own and completely reduce our expenses completely with the city of Xenia.
The county also has a water agreement with the city of Dayton and pays a 10 percent surcharge.
“It (the 50 percent surcharge) is not in line with other municipalities,” Huddleson said.
The county estimates infrastructure and equipment for the new water system will cost $6.5 million.
“In 2019, we’ll look at our expenses and our revenues,” Huddleson said. “I know there won’t be a reason for an increase, but there could be a reason for a decrease. If I continue with the city of Xenia at 50 percent, I know I’m loosing $200,000 a year.”
Central State University has approached the county about connecting to the new county water system once it has been completed, Huddleson said.
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